Last year, Sudan expected that it would have a deficit on oil and crude supplies. Its debts caused the shortage. Also, since South Sudan separated from the country, Sudan experienced 75% lost of oil revenues.
Ever since South Sudan’s secession, Sudan has been making ends meet. Its first move was to increase custom duties and taxes. It also raised air ticket and miscellaneous travelling fees. And it stopped exporting goods such as cars.
The country was a proud exporter before; now, it has become a massive importer. And before this happened, the country has been suffering from major losses because of the recent low prices of oil in the global market.
Also, Sudan experienced a continuous rise in its commodities’ prices. Basic ingredients, like flour, have become scarce. Multiple bakeries are shutting down one by one. Aside from that, cooking gas has become difficult to obtain.
Now, people are queuing, which usually lasts for hours, in gas stations just to buy fuel. A problematic foreign currency crisis has hit the country. The crisis started with the sanctions imposed on Sudan decades ago by the United States. The US has revoked most of the economic-impacting sanctions, but Sudan is still struggling to recover.
There is a major lack of foreign currency in Sudan’s market. Only a few are in circulation and most are traded in black markets. Currently, the exchange rate between USD and SDG is 18SDG/1USD.
Read more about Stock Trading at TradingToplists.com
To counter this crisis, Sudan approached Saudi Arabia. The two countries talked about a five-year agreement, which will supply Sudan with Saudi Arabian oil. If the deal goes through, Sudan will receive more than 1.8 million tons of oil.
The agreement will reach its conclusion in a few days. It is Sudan’s best chance to get out of the situation. Despite the two countries being against each other during the Gulf War, the tension between them has eased. But one can safely say that Saudi Arabia was one of the causes of the continuous downfall of the country due to the decreased diplomatic ties and harsh economic sanctions that Saudi Arabia has implemented.
Saudi Arabia and Sudan have been allies for a short time. They have been supporting each other when it comes to natural and human resources ever since the war in Yemen broke out.
Sudan sent around 3,000 soldiers to Yemen, where Saudi Arabia is currently intervening with the war between African and Middle Eastern factions. To gain more favor, the country is thinking of reconsidering their involvement in Yemen.
