October 10, 2011

Is Sudan bankrupt?

The official exchange rate between the Sudanese pound and the US dollar is 2.6 to 1. On the street, the rate has reached 5 to 1. At a conference in Khartoum last week, a professor of economics from Cairo said he expected the rate to drop to 8 or 9 pounds to one US dollar by the end of the year.

Price inflation has been significant in the past few months. People have started to demonstrate in the streets because the price of food has increased. Sorghum has doubled in price.

Dr Hamid Atijani Ali, economist and professor at the American University in Cairo said that the state was now bankrupt and had no source of income because of the low impetus given to the agricultural and industrial sector.

Sudan's economy, which was once heavily dependent on limited exports of agricultural products has for the past few years  received significant income from the sale of oil. But the oil reserves are in the southern parts of the country. After the independence of South Sudan in July 2011, [north] Sudan has had little oil to sell, and the economy has become much smaller.

Hamid Tijani suggested that the current spending on military, security services and constitutional institutions is unjustified in the wake of the current economic crisis.

Another expert at the symposium said that the hard currency in the Reserve Bank of Sudan would only suffice for one week of imports.

Read this article to get a broad look at the current financial difficulties of Sudan

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