KHARTOUM (Reuters) – Air fares in Sudan skyrocketed this week after aviation authorities ordered airlines to price tickets in line with a new exchange rate mechanism that sharply devalued the local currency.
Under the exchange regime introduced in October in a bid to tackle an acute shortage of foreign currency, the Sudanese pound was devalued to 47.5 per U.S. dollar from 29 pounds per U.S. dollar previously.
That has led to a surge in the cost of many goods and services, but air ticket prices had been set according to the customs exchange rate — 18 pounds per dollar — until Wednesday when the country’s Civil Aviation Authority announced the hike in a memo sent to airlines.
The order caused prices to jump about 66 percent, according to travel agencies’ estimates. Prices in dollars were not affected, but only foreigners and Sudanese residents of other countries may buy tickets in dollars.
“This decision has led to a drastic 60 percent drop in travel in the last two days. This situation puts the aviation industry in Sudan and travel agencies at risk of unbearable losses,” said Mahjoub Almack, head of the Sudanese Association of Travel and Tourism Agents.
Despite October’s devaluation, the pound remains under pressure and the gap between the official and black market rates has continued to widen. A dollar cost 57 pounds on the black market on Saturday.
Reporting by Khalid Abdelaziz; Writing by Yousef Saba; Editing by Helen Popper
NAIROBI — If a teacher in South Sudan wants to buy a chicken for dinner, he would have to save everything he earns for two full months — and it still wouldn’t be enough.
Five years of intense civil warfare have decimated South Sudan’s economy and killed an estimated 380,000 people. A third of the population is displaced, every second person is going hungry, and hundreds of thousands are at risk of starving to death in the world’s newest country, according to the United Nations.
Parts of South Sudan — including key agricultural areas — are nearly emptied of people; they fled for safety or to find food. That means those who remain in South Sudan are relying on imports, even though a plunging exchange rate means imported food is overwhelmingly expensive. And despite the influx of billions of dollars in food aid, attacks on deliveries, bad roads, flooding and deliberate government interference mean that food often doesn’t get to the people who need it.
The result, according to United Nations data, is that even when food is available, many prices are so high — a single meal costs two times the national daily income, according to a report released this year — that people can’t buy the things they see in markets or shops. This is threatening to worsen a crisis that is already Africa’s biggest refugee exodus since the Rwandan genocide in the 1990s.
People are being forced to make difficult sacrifices to survive, said Nicholas Kerandi, a food security analyst with the U.N. Food and Agriculture Organization. Some eat only one meal a day. Others cut out education or health-care costs. Many become refugees.
“It’s a way of coping. You have less income, but you still have to eat,” Kerandi said.
For someone like John Leju Celestino Ladu, those difficult choices are all too real. Ladu is an assistant professor at the University of Juba. He makes the equivalent of about $40 a month.
“The situation is so terrible,” he said. “It’s very bad. It’s really hard.”
To take the bus to and from work costs about $10 a month. Like many South Sudanese, Ladu is caring not only for his immediate family members; he has also taken in about 10 others. Some are uneducated and can’t secure a job in the highly competitive market. Others lost family members in the war and need support.
A kilogram of beef to feed 15 people costs about $5. Rather than spend money on meat, most days they eat beans and boiled corn flour called ugali.
Ladu, who has a doctoral degree in environmental science, supplements his income by driving his motorcycle as a taxi or picking up work as a laborer. He is one of the highest educated in a country where fewer than a third of the population can read. But even he has thought of becoming a refugee to survive.
Last year, the United Nations declared famine in some parts of the country — and said millions more people were at risk. Already, billions of U.S. dollars have poured into food aid. The United States alone, the biggest donor, has given $1.78 billion since the beginning of the conflict, according to the U.S. Agency for International Development, including $336 million this year. In May, the Trump administration threatened to cut funding to South Sudan unless the country’s conflict ends.
But it’s not just getting food donations to the country. South Sudan is one of the most dangerous places in the world for aid workers. The government and opposition forces actively prevent food from getting to areas of urgent need, according to a statement from the U.N. secretary general. South Sudanese government officials have repeatedly said they don’t deny access.
Michael Makuei Lueth, South Sudan’s information minister, said that the U.N. estimates of people going hungry are unsubstantiated and that the reality on the ground is different. He acknowledged that some in South Sudan have become economic refugees but pointed to a recent peace deal as a sign of progress.
“Definitely with the agreement, the economy will improve,” he said. “Because whatever was being spent on the war and all these will be used for other issues, especially for the improvement of the economy.”
In July 2013, two years after the country became independent and before the war broke out, a teacher or government worker earned a salary worth about $350 a month. Five years after the war began, the same salary is now worth about $6 because of the devaluation of the South Sudanese pound.
For those teachers, half a gallon of milk now costs nearly half their monthly budget, at $2.70.
But not everyone’s salary is losing value. Peter Garang is one of the luckier people in South Sudan. He works as a security guard at a building in the capital, Juba, and he gets paid in U.S. dollars. That means every time the value of the South Sudanese pound goes down, he gets more money in exchange. But he says he still can’t survive without cutting back.
“That’s not enough to buy food,” he said. “When you clear your salary, you cannot buy anything.”
Garang has four children, but only one is in school. The fees are too high. He’s also responsible for his three brothers, two sisters, and his and his wife’s parents.
He doesn’t buy chicken or sorghum grains anymore. Even the price of a cup of tea from a street vendor forces him to think twice.
Since the start of the latest round of peace discussions between South Sudanese President Salva Kiir and the leader of the opposition, Riek Machar, Garang says the prices have gone down slightly. He’s hopeful that this time the agreement will hold.
The South Sudanese leaders have made numerous attempts at peace talks — and nearly all have broken down. After the last peace agreement collapsed in July 2016, more than 1 million people became refugees.
Hopes are higher for this peace agreement because it was negotiated with Sudan, which South Sudan seceded from in 2011 after decades of civil war.
Oil is South Sudan’s primary export and a main driver of its economy. When the country separated from Sudan, it agreed to pipe its oil north. The fighting shut down several oil fields, but Sudan promised to get them working again as part of this peace agreement.
“There’s of course an incentive for Sudan to help,” said Thomson Fontaine, the senior economic and financial management adviser for the Joint Monitoring and Evaluation Commission, the group responsible for monitoring the implementation of the South Sudan peace agreement.
“There is a sense that with peace, the economy could really take off,” Fontaine said.
Aside from oil, the country could rely on exports of natural resources such as gold; agricultural exports such as vegetables and gum arabic; and hardwoods such as mahogany and teak.
But much of South Sudan’s most productive area, called Equatoria, has nearly emptied of people since fighting spread there two years ago. For fear of being accused of helping opposition soldiers or to avoid getting caught in the fighting, many people left their farms unharvested. The U.N. food agency estimates that the harvested area was reduced by nearly 50 percent since last year, distorting market prices even further.
“It’s affecting my family terribly,” said Ladu, the university professor. “Life is miserable. Very miserable.”
Going by his bank statements, Isam Ali isn’t short of money — but in Sudan’s cash-strapped capital that’s exactly what he is.
Several times a week, the 45-year-old accountant lines up at one of the few ATMs in Khartoum still dispensing banknotes, waiting hours to withdraw the daily maximum of 2,000 Sudanese pounds ($42). That sum’s being spread increasingly thinly to feed his family, as inflation in the North African nation hits its highest in two decades, quashing hopes 2017’s lifting of U.S. sanctions could spur an economic revival.
The reality: three devaluations for the Sudanese pound this year, the central bank rushing to print more money and a government that can only promise further austerity as President Umar al-Bashir periodically hires and fires his ministers.
“Things are going from bad to worse and the government is changing the cabinet only to buy time,” said Ali. A father of two, he’s feeling the trickle-down from a dearth of foreign investment in Sudan and a chronic lack of liquidity in its banking system.
In a torrid decade for Sudan’s $117.5 billion economy, which included the south seceding in 2011 with three-quarters of the united country’s oil reserves, the past year may have been its worst.
Despite lifting most sanctions, the U.S. still lists Sudan as a state sponsor of terrorism, a designation that officials blame for the lack of significant new investment. Inflation is almost 70 percent, and the pound trades at 47.5 per dollar, plunging from 18 in January. The International Monetary Fund says the economy may contract 2.3 percent this year.
“People lost confidence in the banking system,” says Hamid Eltagani, a Sudanese economics professor at the American University in Cairo. “The economy is becoming more of a rudimentary system of barter-exchange and the government has no instrument to entice cash into the banks.”
While the U.S. sanctions — imposed in 1997 on terrorism allegations — hit Sudanese government agencies that provided essential services, the nation’s elites often found ways to circumvent them, setting up companies that benefited from preferential access to hard currency and contracts.
Al-Bashir has repeatedly blamed Sudan’s economic troubles on alleged plots by the U.S. and other Western countries. He’s said “fat cats” including unidentified bankers, black-market traders and smugglers also bear responsibility.
Prime Minister Mutaz Musa in October announced a 15-month plan to trim inflation, cut spending and tackle corruption while defending those on lower incomes. The government said on Saturday it was raising flour subsidies to protect the price of bread. A January decision to lower subsidies on that commodity and electricity sparked protests and dozens of arrests.
For Abdullah Ismail, 55, his day job isn’t enough to make ends meet. The Sudan Railways Corp. workshop employee spends half his 4,000 pounds monthly salary on rent, then has to eke out food, transportation, electricity and school fees with the rest.
He borrowed 10,000 pounds from a local bank to buy a small taxi and make extra money. But the fresh earnings were eaten up by rising expenses; he hasn’t been able to make repayments for six months. “I failed and I’m in danger of being imprisoned” for the outstanding debt, Ismail said.
Losing oil plunged Sudan into crisis, but the country’s involvement in a new deal to end South Sudan’s five-year civil war could bring compensation.
As landlocked South Sudan boosts its crude output, that may mean extra revenue for Sudan, which collects fees for transporting oil by pipeline to a port on the Red Sea. Sudan pumped about 86,000 barrels per day of its own oil last year, according to BP Plc.
Gold has been touted as a replacement to oil, and exports of about 10.7 metric tons brought in $422 million in the first half of 2018, the Minerals Ministry says. But the government complains most exports don’t go through official channels and has promised steps against smuggling.
“The political machine has run out of lubricants,” said Eltagani, the academic. He described an “aging regime” with a “bankrupt ideology and a lack of clear policies to fix the ailing economy.”
In the meantime, Sudanese like Zahra Ahmed — a 21-year-old arts student at the University of Khartoum — are looking for any work available to cover their expenses and tuition.
“My family can’t manage to provide that for me as well as my two sisters,” she said.
South Sudan rebel leader Riek Machar returned to the capital Juba for the first time in more than two years on Wednesday for a ceremony to welcome the latest peace accord for the war-ravaged country.
Machar, who under the terms of the September deal is to be reinstated as vice president, had not set foot in the city since he fled in July 2016 under a hail of gunfire when an earlier peace agreement collapsed.
The latest deal aims to end a civil war that erupted in the world’s youngest country in December 2013 and uprooted about four million people – roughly a third of the population.
The rebel chief was welcomed at Juba’s airport by President Salva Kiir, Machar’s former ally turned bitter enemy. The two rivals then joined regional leaders at the ceremony to publicly welcome the most recent agreement, signed in the Ethiopian capital Addis Ababa.
UN Mission in South Sudan (UNMISS) chief David Shearer hailed the moment of cooperation and said that building trust would be crucial, according to a statement.
“To see parties that have previously been divided by violence coming together here in Juba, in a public sign of unity, sends a strong message to the citizens of this country that you are genuinely committed to end the suffering and build durable peace,” he said.
‘Chance to restore hope’
Several thousand people gathered for the ceremony at the John Garang Mausoleum, built in honour of the independence hero who was killed in a helicopter crash in 2005.
Among regional leaders attending were Sudanese President Omar al-Bashir, Ethiopia’s newly appointed President Sahle-Work Zewde, Somalia’s head of state Mohamed Abdullahi Mohamed and Ugandan President Yoweri Museveni.
South Sudan gained independence from its northern neighbour Sudan in 2011 after a 22-year civil war pitting rebel groups against Khartoum.
“Sadly, the hopes and dreams of that moment were lost in the outbreak of the war that has plagued this country for five long years,” Shearer said.
“This ceremony is a chance for the leaders here today to restore that hope and to secure a peaceful and prosperous future for their people.”
The deal has encountered delays on several issues including the reactivation of a joint committee on borders and the number of regionals states.
It was not immediately clear how long Machar would remain in Juba, as his aides have expressed concerns over his safety in the city.
Lam Paul Gabriel, a spokesperson for Machar’s SPLM-IO rebel group, had said on Tuesday that he would be accompanied by around 30 political figures.
In an interview with Jacaranda FM News, Sana says she is yet to break the news to her daughter: that her father might be hung.
Endley describes the verdict as a “mockery of justice”.
“He is a South African man and ex-retired colonel. I have not had any contact with the South African government today. My request would be is to do the best they can and at least clarify,” says an emotional Endley. “I just heard from a mutual friend in Juba that when the sentence was given the judge even declared that all evidence against William will be destroyed. Why will they do this?”
William has been in South Sudan for the past 18 months. He worked as an advisor to former vice president and now rebel leader Riek Machar on the integration of the rebel forces into the national army under the then peace deal.
The peace agreement collapsed in 2016 where he was arrested.
His sister, Charmine Quinn says the family has been left broken.
“We are very broken. We are emotionally very tired, financially we are under strain. It’s has been really tough.”
Mr Endley, a retired South African army colonel and for adviser of Mr Machar, was accused of providing him with military support.
“I will release him tomorrow [Thursday] and deport him back to South Africa,” Mr Kiir said.
Dr Riek Machar — who returned to Juba for the first time in more than two years to take part in the ceremony — reaffirmed his commitment to the implementation of the September 12 peace agreement.
“We come here today to confirm to you that we are for peace. We want peace and unity,” he told the crowd at Freedom Square.
“The peace agreement will bring you federal system of governance,” he added.
Notable among the special guests at the ceremony were Sudanese President Omar al-Bashir, Ethiopia’s newly sworn in President Sahle-Work Zewde, Somali’s President Mohamed Abdullahi Mohamed and Ugandan President Yoweri Museveni.
South Sudan won independence from Sudan in 2011 but plunged into a civil war in 2013 after President Kiir accused Machar — then the vice president— of plotting a coup against him.
The five-year civil war has killed an estimated 380,000 people and nearly two-and-a-half million others displaced.
A Mo Ibrahim Foundation report recently ranked South Sudan as the second worst governed state in Africa after Somalia.
Several peace accords have been signed but faltered immediately. They include the last one in 2016 that forced Mr Machar to flee into exile.
Sudan is heading towards an emergency reform plan in order to revive its ailing economy.
Prime Minister Moataz Moussa announced to parliament of the 15-month emergency economic-reform plan on Wednesday. It also includes further austerity measures.
The measures include slashing all tax exemptions except for materials needed for production, withdrawing some vehicles provided to officials, among others.
“The aim of the program is to restore the implementation of the budget of 2018 to assist the performance in 2019 to achieve its objectives of economic stability by reducing the average rate of inflation, stabilizing the exchange rate and achieving a real GDP growth rate of 4%,” said Moussa
The prime minister also highlighted plans to establish a commodity exchange for gold and currencies.
The country’s economy has been struggling since the south seceded in 2011, taking a huge share of oil, once a major export.
It has also been enduring miserable economic conditions in recent months despite hopes last year that the lifting of US sanctions in place since 1997 would boost the country’s fortunes.
The government has been trying to slash expenditures as it continues to grapple with an acute foreign exchange shortage and inflation above 65 per cent for several months.
The central bank has twice devalued the Sudan pound this year. The pound currently trades at 41 to the dollar on the black market, while the official rate is 28 to the dollar.
In September president Omar al Bashir cut the number of ministries. He also announced his second major government reshuffle in the space of four months, a move aimed at fixing a crisis-hit economy.
Bashir also pledged to tackle corruption and reform the national economy, promising more subsidies for the poorest, increased productivity and revenues, and finance for agricultural schemes.
Early this month, the National Bureau of Statistics and UN agencies released a report warning that parts of greater Jonglei, Unity, Upper Nile, and Western Bahr El Ghazal states are expected to face acute food shortages early next year.
The report indicated that over six million people face Phase 3 food crises which are classified under the Integrated Food Security as the worst acute food insecurity.
In a statement seen by Eye Radio over the weekend, the agency said the children are among 270,000 who are severely malnourished and at risk of starvation in the four regions.
Safe the children said “the near-famine is a rapid and worrying increase compared to 2017, in which famine was only declared in one state.”
The agency attributes this to continuing conflict in the areas it said is limiting access by humanitarian organisations.
Besides, it added that “reduced aid funding makes it difficult to provide assistance to malnourished children.”
Authorities in the respective states are yet to comment on the report.
Residents of Abyei area have staged a peaceful protest, supporting the UN Peacekeeping Operations’ proposal to deploy additional police units in the disputed region.
”Yes we have organised the demonstrations to support the proposal of secretary general of United Nations that is presented to the United Nations security council…,” Kon Manyith, the deputy head of Abyei Administration Area told Eye Radio on Monday.
Last month, the UN top peacekeeping official said the unit would enhance the UN’s focus on maintaining law and order there, and furthering peace between local communities.
Thousands of Abyei Area residents took to the streets today to voice their support for the proposal.
“….we believe that the proposal has really addressed big changes to take place within united mission in Abyei,”Mr. Kon said.
The area residents also urged the council to endorse the proposal they said will determine the final status of the region.
“We are urging all members of security council to vote for the proposal of secretary general as the proposal was the turning point for the resolutions of Abyei final status…,” Mr Kon added.
The Abyei Area was accorded a “special administrative status” by the 2004 Protocol on the Resolution of the Abyei Conflict, known as, the Abyei Protocol, in the Comprehensive Peace Agreement.
Under the terms of the Abyei Protocol, the Abyei Area was declared, on an interim basis, to be simultaneously part of the states of South Khordufan and Northern Bahr el Ghazal and issues related to be determined by the Presidency, made up of President Salva Kiir and President Omar al Bashir.
The Ngok Dinka and Misseriya had unilaterally held referendums, but both governments of Sudan and South Sudan were mum about the popular votes.
The Presidential Press secretary has said the government has approved nearly 700 million Pounds for the celebration of the revitalized agreement.
The government and opposition parties signed the revitalized agreement on the resolution of the conflict in the Republic of South Sudan last month.
Ateny told Eye Radio on Monday that the ministry of finance has already released the funds to the organizing committee.
“The ministry of finance has availed the fund for it, and so the celebration is realistic as I speak with you.”
According to Ateny Wek Ateny, the budget, which was approved by the council of ministers.
“Well the budget that was passed by the cabinet of the current government is closed to seven hundreds million pounds.”
It aims to facilitate the celebrations which will take place on the 30th this month.
The national celebration of the peace deal was initiated by President Salva Kiir, who signed the revitalized peace agreement on September 12 in Addis Ababa, Ethiopia.
President Kiir invited leaders of the parties who inked the peace accord, including Dr. Riek Machar and Dr Lam Akol; and regional heads of state.
“The opposition are all invited, Sudan government will be guaranteeing for participation of the opposition led by Dr. Riek Machar and Dr. Lam Akol…”
Earlier, the government said it would extend an official invitation to the opposition leaders to attend the celebrations.
However, the parties are yet to confirm the invitation, but the opposition group had insisted that President Kiir lift the state of emergency and release all political detainees first for them to attend the peace celebrations.