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Sudan declares economic state of emergency
Beginning of this month Sudan declared an economic state of emergency after its currency fell sharply in recent weeks, setting up special courts to prosecute what officials called a "systematic operation" to vandalize the economy. Anwar Elhaj, Researcher and Political Analyst spoke to CNBC Africa for more.
Tue, 22 Sep 2020 15:13:26 GMT
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AI Generated Summary
- The dire financial situation inherited by Sudan's transitional government precipitated the economic emergency declaration in light of the sharp decline in the Sudanese pound's value and soaring inflation rates.
- Remnants of the previous regime implicated in corruption and economic sabotage have hindered the government's efforts to address the crisis and implement reforms.
- The concentration of wealth among a select few elites has exacerbated price inflation and currency instability, necessitating targeted policy interventions to restore economic stability.
Sudan recently declared an economic state of emergency in response to a sharp decline in its currency value, setting up special courts to address what officials have termed as a 'systematic operation' aimed at destabilizing the country's economy. Anwar Elhaj, a researcher and political analyst in Sudan, provided insights into the underlying reasons for this economic crisis and the government's response. Elhaj highlighted that the transitional government in Sudan inherited a dire financial situation upon taking power, with the Ministry of Finance and the Bank of Sudan facing significant challenges. The government initiated various measures before resorting to declaring a state of emergency, underscoring the severity of the economic turmoil. The rapid depreciation of the Sudanese pound, with a more than 42% decline in value within just 10 days in September, prompted alarm among citizens, businesses, and international observers. The currency devaluation contributed to soaring inflation rates, escalating commodity prices, and shortages of essential imports such as wheat, flour, fuel, medicine, and cooking gas. These critical shortages posed substantial challenges for the government's ability to secure foreign exchange for importing crucial goods. In response to the crisis, Sudan introduced a two-pronged strategy encompassing security measures to combat exchange rate volatility and policy interventions to stabilize the currency's decline. Elhaj emphasized that the economic emergency was precipitated by these multifaceted challenges, necessitating decisive government action to address the crisis. Sudan's Minister of Information characterized the economic turmoil as a deliberate attack on the government's progress since the revolution, attributing the challenges to remnants of the previous regime seeking to undermine the transitional authorities and hinder economic reforms. The pervasive corruption under the former government, which benefited a select few elites closely aligned with the ruling party, has left a lasting impact on Sudan's economic landscape. Elhaj noted that while some implicated individuals have been detained and interrogated, not all have faced prosecution. Many of these individuals, associated with the previous regime, continue to wield significant financial influence and control over the country's currency supply. The concentration of wealth and resources in the hands of a few elites has exacerbated price inflation, particularly in real estate and foreign exchange markets. Elhaj echoed the sentiments expressed by the Minister of Finance, highlighting the systematic efforts to destabilize the economy and obstruct the government's policy agenda. The economic emergency declaration serves as a critical response to the complex challenges facing Sudan's economy, underscoring the need for targeted interventions and decisive action to restore stability and foster sustainable economic growth.
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