Sudan: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Since the secession of South Sudan in 2011, the economic situation has been difficult. 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, and entered in recession. To avoid a loss in production and revenue, an agreement was reached in 2012 between South Sudan (rich in oil reserves, but with no 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. 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, Sudan's GDP growth recovered modestly to 0.9% in 2021 (IMF). It is forecast to strengthen to 3.5% in 2022 and 5% in 2023 according to IMF estimates. However, the military coup of October 2021 clouded the outlook. Sudan's economic recovery will depend on international financial support, itself dependent on the formation of a civilian government, the release of political prisoners, the lifting of the state of emergency, and an end to violence against peaceful demonstrators (Coface).

In 2021, Sudan’s economy started to recover from the deep recession that had plagued the country since 2018 and that was exacerbated by the Covid-19 pandemic. However, 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. Budget balance switched from a surplus of 6% GDP in 2020 to a deficit of -2% GDP in 2021, and is expected to further increase to 3% in 2022 (Coface). Vital external budgetary aid from bilateral and multilateral partners is conditional on a democratic transition. External debt, much of which in arrears, is unsustainable despite being halved under the Heavily Indebted Poor Countries (HIPC) Initiative. Sudan is in a situation of extreme indebtedness. As nearly 90% of the public debt is external and denominated in foreign currency, it is increasing after each devaluation (Coface). From an estimated 272.9% GDP in 2020, public debt decreased to 209.9% GDP in 2021, and is expected to further reduce to 176.6% GDP in 2022 and 157.3% GDP in 2023 (IMF). Hyperinflation and devaluations, combined with low confidence in the banking system, have triggered a liquidity crisis (Coface). According to IMF estimates, inflation continued to escalate from 163.3% in 2020 to 194.6% in 2021. It is fuelled by monetisation of the deficit, disruptions in food and fuel supplies due to the protests, and low agricultural productivity (Coface). The IMF forecasts inflation to shrink to 41.8% in 2022 and 17.6% in 2023, whereas Coface projects an inflation rate of 100% for 2022. The priority is to stabilise the economy, but the crucial international aid needed to support economic recovery is dependent 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 (19.6% in 2020 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, poverty rate increased to an estimated 56% of the population (AfDB). Sudan is ranked 170th out of 189 countries in the Human Development Index published by UNDP.

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: February 2023