Months of political turmoil has had its impact on the fragile economy of Sudan. The country needs US$8 billion in foreign aid in the next two years to cover its import bill. Also, Sudan needs a huge resource base to rehabilitate and rebuild the economy ravaged by the long political turbulence.
There is a new ray of hope before Sudan now with the new dispensation taking over the reins of the country. The transitional government headed by Abdalla Hamdok, ousting veteran leader Omar al-Bashir can script a radical change in the economic and political governance of the country. Sudan needs US$2 billion of foreign reserves deposits in the next three months to halt a fall in the currency. Hamdok, the 61-year-old economist, who is now wearing the additional charge as the head of the transitional government has worked for the U.N. Economic Commission for Africa. To meet the mounting needs of resources, he started parleys with the IMF and the World Bank to source funds for restructuring Sudan’s huge debts. He has also approached friendly nations and other international bodies for tying up its financial crunch. The immediate challenge before the transitional head is to change the traction of the economy and the explosive political system plagued with escalating public anger over shortages of food, fuel and hard currency that triggered mass demonstrations. The foreign reserves in the central bank are not enough to support import of essential goods even for a week.
Hamdok has to steer clear of the challenging situation with deftness, caution and political acumen. The donors including multilateral organizations like IMF and World Bank may prescribe stringent conditions while giving grants and loans to overcome the challenging situation. It is the right diplomatic overture of Hamdok, when he said that that he would take decisions only after intense discussions and consultations with all stakeholders including the people, who took the cudgels against his predecessor for his misrule and fiscal profligacy.
Hamdok also will have to take a careful and considered view on politically sensitive issues like subsidies on food, fuel, electricity etc. Any harsh step like cutting down or rolling back of subsidies or part of it on essential goods may be furiously resisted by the common man, who suffered a lot under the earlier dispensation. The other immediate challenge before the new Sudanese leader is to impress upon the US to take out Sudan from its list of state sponsors of terrorism, a malevolent stigma that isolated the country from most of the international financial systems since 1993. Will the US go by the wish of Sudan is another matter, which everyone is speculating. Indeed, the US is trying its best to penetrate into Africa to keep its competitors like China and Russia at bay. This could be a golden opportunity to show olive twig to Sudan to bring that country into the US fold.
