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Legalize Hard Currency Possession

Omer B. Abu Haraz

The resilient economy of Sudan is weird. Almost all elements of economic collapse are prevailing for more than 7 months and there are no signs of the collapse.

Elements of Economic Collapse Are:

  • No government since October 25th, 2021
  • Drastic deterioration of revenues to government from customs dues, tax collection, and administrative charges of government dealings.
  • A sharp drop in exports proceeds.
  • Plummeting of production and productivity in public and private sectors projects, firms, agriculture, and industrial.
  • Deterioration of basic services to unprecedented levels. Services of power supply, water, education, health care, and public transport.
  • Sky-rocketing prices of basic commodities reached an unaffordable level for the majority of people.
  • Imports are still at the same level widening the gap with the falling exports proceeds.
  • Stoppage of all international assistance
  • Continuation of resentment of youth against the October 25th coup which manifested by almost daily rallies in the streets and barricading of main roads. Rallies accompanied by the use of excessive force by police claimed till now the lives of hundreds of martyrs and thousands of injuries.
  • Resurfacing of violence and arms attaching of towns and villages in Darfur.
  • Increasing incidents of armed robberies and looting against people and shopping centers in the capital.
  • Presence of armed groups in the capital desperately waiting for the implementation of integration in the armed forces in fulfillment of the Juba Peace Agreement of October 2020. Their presence in uniform and weapons poses a threat to the safety and security of the inhabitants of Khartoum State.

All of the above elements create conditions very conducive to economic collapse and anarchy.

What is weird and masking the happening of an economic collapse is:
The lifting of subsidies which pushed prices of fuel, bread, sugar, services – services – power, transport, and all other commodities did not affect their demand, Streets are congested with many cars, fuel stations are working as normal, and electricity consumption did not drop.

Social activities as normal – expensive and luxurious marriages at expensive halls are held, and expensive cafés and restaurants are daily full of customers.

  • New and used car showrooms are full of cars and buyers.
  • Exceptionally high rate of passengers traveling by the expensive airfares.
  • The construction business is booming.
  • The only justification for this weird equation is that the country is fully run by the hidden economy – which is the economy outside the banking system.

There are more than 6 million Sudanese expatriates in the Gulf states, 3 million in Egypt, one million in the USA, and another million in Europe. If we assume of those 11 million only 6 million support their families by US$150 monthly i.e. monthly US$900.000 are kept outside transferred on Sudanese pounds by dollar dealers of the hidden economy.

Another important factor masking the economic collapse is the gold activities. Millions are working at different levels selling their modest collection to big gold cartels who reimburse them in Sudanese pounds and export most of the gold in illicit channels which allows them to keep the bulk of the gold export proceeds outside.

The hidden economy hard hits the macroeconomics of the country and flourishes the individuals spend.

The only way to circumvent serious damage to the economics of Sudan is to legalize the possession of hard currencies by individuals or companies such as Bonafide in all dealings – purchases, banking deposits in current or saving accounts, imports, transfers, or traveling.

This decision if done will eliminate the hidden economy dealers and cartels.

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