Sudan: Economic Outline

Economic Indicators

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Since the secession of South Sudan in 2011, the country's economic situation has been difficult as Sudan lost one-third of its territory, one-fourth of its population, 75% of its oil reserves and more than 75% of its fiscal revenues, thus entering into recession. To avoid a loss in production and revenue, an agreement was reached in 2012 between South Sudan (which is rich in oil reserves but has weak infrastructure) and Sudan, where much infrastructure is located. As a result, South Sudan has been paying a share of its revenues to Sudan for the transportation of its oil. Following popular uprisings and the removal of Islamist President Omar al-Bashir by the military, who had been in power since 1989, a mixed "Sovereign Transitional Council" comprised of both civilians and military officials was established in 2019. However, in October 2021, General Abdel Fattah al-Burhane, the council's president, dissolved the interim government, expelled the pro-civilian bloc from the council, detained Prime Minister Abdallah Hamdok, declared a state of emergency, and suspended the constitutional charter governing power-sharing. Sudan has been paralyzed by protests throughout 2022, with the military continuing to suppress civilian demonstrations and relying on the movement's exhaustion. Although a preliminary agreement between the Coalition and the military was signed on December 5, 2022, outlining the principles of a return to civilian rule, a two-year transition period, and the regulation of military-owned companies, the road to a negotiated transition appears to be narrow. After contracting by an estimated -3.6% in 2020 due to the outbreak of the Covid-19 pandemic, a locust infestation and floods, the recession deepened, with Sudan's GDP growth recovering modestly to 0.5% in 2021 (IMF). Nevertheless, in 2022 GDP growth turned negative again (by 0.3%) according to the IMF, but is expected to return on a positive trend this year (2.6%) and in 2024 (5.6%).

Sudan’s financial partners (including the United States, the World Bank and the IMF) suspended their aid following the military coup that was accompanied by the declaration of a state of emergency and human rights violations. The government budget deficit increased from 0.3% of GDP in 2021 to 2.2% in 2022 and is expected to remain negative in 2023 (-1.8% according to Coface), despite the fact that budget revenues are projected to rise to about 10% of GDP. Moreover, in the absence of a return to civilian rule, the Paris Club suspended its debt reduction and restructuring programme in June 2022. The debt-to-GDP ratio was estimated at 189.5% of GDP by the IMF in 2022 but is expected to follow a downward trend over the forecast horizon (155.3% and 140.1% in 2023 and 2024, respectively). The Sudanese economy is characterized by hyperinflation: after reaching 359.1% in 2021, it stood at 189.5% last year and should decrease only marginally by 2024 (to around 140%). The priority is to stabilise the economy, but the crucial international aid needed to support economic recovery is dependent on a now stalled democratic transition. The Sudanese authorities will seek to sign an agreement with the IMF, in continuation with the previous Staff-Monitored Program (SMP). In addition to economic stabilisation, the main objectives were to strengthen social protection, boost the private sector and improve governance.

The humanitarian situation is dramatic with a large number of displaced persons and refugees. Social tensions have increased, fuelled by rising prices and the lack of basic necessities. Sudan suffers from economic inequalities, high unemployment (19% in 2021 according to the World Bank) and inadequate social services. Life expectancy in the country stands at 64,4 years and close to half of the population is at or below the poverty line. Rapid exchange rate depreciation and persistent inflation have worsened an already difficult situation. Due to the COVID-19 pandemic, the poverty rate increased to an estimated 56% of the population (AfDB) and 39% of the population lives in a state of food insecurity according to the World Food Programme. The country’s GDP per capita (PPP) was estimated at USD 4,471 in 2023 by the IMF.

Monetary Indicators	2016	2017	2018	2019	2020
Sudanese Pound (SDG) - Average Annual Exchange Rate For 1 GHS	1.58	1.54	5.31	11.63	27.83

Source: World Bank - Latest available data.

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Latest Update: September 2023