MF warns of devastating 18.3% GDP contraction in Sudan

February 18, 2024 (PORT SUDAN) – The International Monetary Fund (IMF) issued a stark warning today, predicting a catastrophic 18.3% contraction of Sudan’s economy in 2024. This grim forecast stems from the ongoing conflict, which has entered its 11th month with no end in sight.

This alarming prediction follows a 12% economic decline in 2023, attributed by the World Bank to the war’s disruption of production and decimation of human capital and state infrastructure.

The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) confirmed the IMF’s prediction in a recent update, highlighting that the projected decline is over twice the pace witnessed in war-torn Syria and Yemen, whose economies shrank by 50% over a decade, averaging a 5% annual decline.

The OCHA update further details the war’s devastating impact on Sudan’s economy, including the destruction of industrial capacity, education and healthcare systems, and the collapse of key sectors like commerce, finance, and information technology. This, coupled with the erosion of state capacity, paints a bleak picture for the nation.

Sudan’s GDP stood at $34.3 billion in 2021, with industry contributing 21% and agriculture 32.7%, with the services sector making up the remaining share. However, since the October 2021 military coup, civil unrest, and the ongoing war, economic activity has plummeted.

These factors have crippled production, destroyed human capital, and weakened state capabilities, leading to the predicted catastrophic contraction.

The war also raises serious concerns about a potential famine due to multiple factors. Disrupted agricultural activity has severely impacted food production, while limited humanitarian aid due to lack of ceasefire and aid flow restricts access to those in need. Furthermore, the war’s destruction of roads and bridges has significantly hampered infrastructure, exacerbating the crisis.

(ST)