Thu, Dec 20, 2012 - Page 6 News List

Commuters stranded as Sudanese economy teeters on verge of collapse

SOARING INFLATION:A weak local currency has sent the prices of spare parts up 100 percent over the past year, forcing some bus owners to idle their vehicles

AFP, KHARTOUM

Khartoum’s decaying fleet of public buses is leaving commuters stranded as surging inflation and a sinking Sudanese currency drive maintenance costs out of control, bus operators say.

The transport woes are the latest burden inflicted upon Sudanese by an economy which one think tank said is on the brink of collapse after the loss of South Sudanese oil last year.

Hanan Jadien said commuting to her downtown office by bus has become a struggle since August, when the trip used to take about 30 minutes.

“Now I have to wait in the terminal between half an hour and two hours. In total, I need four hours to come and go from work,” said Jadien, who also has to take care of her family.

“The transport problem is getting worse every day,” said another bus passenger, Hassan Mohammed Omer.

Drivers blame the cost of spare parts, which has risen with the weakening of Sudan’s pound against the US dollar.

A minibus driver, Abdelwahid Omar, said most of the buses are old and need continual repairs, but the price of replacement components keeps going up.

“Parts dealers say it’s because of the [US] dollar. And the second thing is most of the spare parts now in the market are not original, so they don’t last for long,” Omar said.

The transportation association representing private bus owners says some have decided to park their vehicles rather than pay for the spare parts whose cost has gone up 100 percent over the past year.

Vehicle components and other imported goods have soared in price since Sudan lost the bulk of its foreign-exchange earnings when South Sudan separated in July last year, retaining roughly 75 percent of the oil produced by the formerly unified nation.

Inflation accelerated to 46 percent last month, and the Sudanese pound has plunged on the black market where it now fetches around 6.75 Sudanese pounds for one US dollar, against more than 4 Sudanese pounds late last year.

In June, the government devalued the official foreign exchange rate as part of measures to compensate for the loss of South Sudanese oil.

It also raised taxes, allocated more funds for social spending and increased the pump prices of fuel by about 50 percent to reduce petroleum subsidies.

Anti-inflation protests followed, with Arab Spring-inspired calls for the downfall of Sudanese President Omar al-Bashir’s 23-year-old regime. The scattered protests petered out following a security clampdown.

The IMF described the June reforms as an important step toward restoring economic stability and reducing dependence on oil.

However, an international economist said that implementation of the reform package has been “mixed.”

Asking for anonymity, he said spending had not been contained as hoped, while revenues did not flow as expected, leaving a projected deficit of about 10 billion pounds (US$1.48 billion at the black market rate).

“And they’re still printing money,” which has pushed inflation to its highest level in 15 years, he said.

The economist said that if inflation rises further, then the Sudanese pound would remain under pressure, in turn threatening the country’s “very low” foreign-exchange reserves.

“The economy is on the brink of collapse,” the Brussels-based International Crisis Group think tank warned in a report last month.

The government has rejected workers’ demands to raise the minimum wage to 425 pounds a month, and the price of beef has doubled since late last year to 40 Sudanese pounds per kilogram.

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