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WIDE ANGLE / Sudan’s New Dawn
Sudan’s WIDE ANGLE
Turning the economy around, reforming the constitution, holding elections and dealing with the military are some of the major challenges facing the post-revolution government in Sudan
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new dawn
By NICHOLAS NORBROOK
A new day starts in Khartoum
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Sudan’s Prime Minister Abdalla Hamdok delivered his message emphatically – “we have to rebuild our economy if our political transition is to work.” That means listening to the calls for economic opportunities from the hundreds of thousands of revolutionaries who had mobilised across the country against the brutality and corruption of then president Omar al-Bashir and the Islamist National Congress Party regime.
For Hamdok, the high-level conference in Paris on financing Sudan’s rebirth was a critical staging post. Held in May, two turbulent years after the ousting of the Bashir regime, the Paris conference elicited pledges for a restructuring and partial cancellation of Sudan’s more than $50bn in foreign debt. More than debt and IMF programmes, Hamdok wanted the Paris conference to showcase the development and commercial possibilities in Sudan in areas such as modernising agriculture, digital transformation and renewable energy.
Formerly the top development economist at the UN’s Economic Commission for Africa, Hamdok emerged as the favoured candidate for the premiership in the wake of Sudan’s revolution.Asa technocrat who hadrepeatedly rejected job offers from Bashir’s regime and had been critical of its policies, Hamdok had credibility with the young revolutionaries. It
was also Hamdok’s quiet determination and ability to rally international support for Sudan that led the country’s highly factionalised military and security agencies to accept him as prime minister. They may have hoped that the intricate three-layered transitional government – the ruling sovereignty council on which the military and civilians share power, the council of ministers, dominated by the civilians, and the legislative council – would prove so difficult for Hamdok that it would make far-reaching reform impossible.
Consultative process
Hamdok has proved them wrong on that. A slew of economic, administrative, judicial and now constitutional reforms are under way. The next step will be a constitutional conference, promises the prime minister: “[It] will be not an event, but a wide-ranging consultative process” – a process that he hopes will help unite the country’s diverse ethnicities and regions.
“For 60 years we failed to get together around a national project”, says Hamdok. “The revolution [which started in December 2018] provided that opportunity, and we should seize it.” Creating a parliament and organising elections – slated for 2022 – are due to be the final stop on that journey. Sudan’s transition
/NYT/REDUX/REA JOAO SIL VA
The land around Gezira has huge potential
faces two hefty threats – economic breakdown and destabilisation by military spoilers who have outside allies. Beneficiaries and loyalists of the Bashir regime have tried to sabotage the economy, which has been plagued by shortages of essential commodities, inflation of more than 300% and frequent power cuts.
Hamdok’s economic diplomacy in Paris will help. Sudan has had $3.1bn in arrears to the African Development Bank, World Bank and IMF paid off by a coalition of the US, France, the UK and others.
The Paris Club of official creditors is to clear most of the historic debts. The World Bank and the IMF are fast-tracking Sudan onto the Highly Indebted Poor Countries (HIPC) scheme. That should start at the end of June.
“Sudan is crippled by its debts, which are mostly interest,as the Bashirregime never paid any of its debts for 30 years”, says Sudanese telecoms billionaire turned governance campaigner Mo Ibrahim. “It locked out Sudan completely from the international system, from its institutions and funds.”
What’s at stake? “You need some sense of stability in a region at risk of going up in flames,” says Suliman Baldo, senior adviser at US-based monitoring group The Sentry. He points to the war in Ethiopia’s Tigray region and also the conflict in Benishangul-Gumuz, which borders Sudan.
“It’s about the size and the importance of the country,” says Hafez Ghanem, the World Bank’s vice-president for East and Northern Africa. He agrees that the strategic importance of Sudan has focused minds. “This is the largest HIPC arrears clearance ever, and it is not just international but the regional partners who have mobilised.”
The presidents of Ethiopia, Egypt and Rwanda and the chairman of the African Union Commission all attended the Paris meeting on Sudan. “First movers in new markets are the biggest winners,” said Afreximbank boss Benedict Oramah, as he promised $750m in trade-related finance.
Breadbasket of the region
Many at the meeting pointed to Sudan’s macroeconomic reformsover the past 18 months: cuts to fuel and power subsidies, dropping multiple exchange rates, tax reform and negotiations with the World Trade Organisation. A new investment law, a public-private partnership law, greater independence for the central bank... the list goes on. As the business climate starts to improve, the country is coming into focus for investors, too.
Artisanal miners are producing gold in 14 of Sudan’s 18 states. Only 48% of the country is covered by mobile telephony, and the government is looking for $2bn of investment. Railways connecting Khartoum to Ethiopia are envisaged. “Sudan should be the breadbasket of the region,” Africa’s leading industrialist Aliko Dangote tells The Africa Report. Nigeria’s Dangote says the proximity to consumer markets in Egypt and the Gulf is tempting him into flour processing there.
“The best way to link farmers to markets are partnerships between farmers, agro-processors andforeigninvestors,perhaps through outgrower schemes,” says the World Bank’s Ghanem. “Only 30% of arable land is used today
- A LL RIGHTS RESERVED KA Y N IETFELD/ZUMA PRESS/ZUMA/REA
Hamdok and his reformers
ABDALLA HAMDOK
Due to deliver a constitution and elections in 2022.
KHALID YOUSIF
The cabinet minister plays a key coordination role.
MOHAMED AL-ABDEIN
The central banker is getting the economy on track.
YASSER ABBAS
The minister is in talks with Ethiopia about its mega-dam.
ABDULRAHMAN OTHMAN
Khartoum’s oil and gas minister.
in Sudan.” Who owns that land – and who benefits – were some of the flashpoints behind the December revolution.
For Ibrahim, much more work needs to be done on ensuring equitable access and developing new projects. “It was a little bit sad to for me to watch the presentations, and see the Gezira project presented as the largest irrigated agricultural project in theworld,” says Ibrahim. “Do you know who established that project? It was the British during the colonial period. What have we done since then?”
Pain now, gain later
Another focus for the government is energy. “The cost of producing from solar has come down to $0.025/KWh – that is an unbeatable price,” says Ghanem. Solar power supports mini-grids and off-grid solutions, which save on costly transmission lines. “All this allows you to be really ambitious in trying to achieve universal access to electricity.”
But while Hamdok and his teams are trying to recreate a solid base for the country, time is not on his side.“The danger from these kinds of reforms is that the pain is immediate, while the benefits take longer to be seen,” says Ghanem.
Cars queue from dawn to ensure they get the few tankfuls of fuel available each day. In early April came the big revelation: the publication, with no fanfare, of a partial list of the opaque state-owned enterprises (SOEs) that make up the bulk of the Sudanese economy (see box). For The Sentry’s Baldo, tackling the state-owned companies is essential to mitigate the political risks in the transition.
These parastatals are part of an “elaborate kleptocratic system” thatremains largely under the control of the military. Sudan’s finance ministry controls just 18% of the revenue that SOEs and government agencies generate.
For the Sudanese, “there is an understanding about what the problem is – that these companies are denying the wealth of the country to the people – and they want to see action there, some level of easing of their condition as the government controls more resources,” says Baldo. He underlines the political tightrope the Prime Minister is on.
“Failure to do so would mean people would no longer unconditionally support Hamdok.” Hamdok chose Jibril Ibrahim as his new finance minister. A poacher-turned-gamekeeper, Ibrahim leads a Darfur rebel group, the Justice and Equality Movement. He is best known for being the man to almost take Omdurman in 2008, before the Sudanese army managed to repel his forces from the gates of Khartoum.
Does that past make it tricky to be the man paying the army its wages today? “When you sign a peace agreement, you are closing one page and opening a new one. At the end, you are a Sudanese. And if you take the position of the minister of finance, you are answerable to the whole country. It is not a matter of love and hatred, it is a matter of duties,” says the minister. “Of course we need to think of a new army,” he adds. “That is one of our conditions, that we need to restructure the whole security sector so that it will be reflective of the components of the Sudanese society and reflective of the understanding of
Securing assets
The Omar al-Bashir regime put vast chunks of the economy under the control of the security services – police, army and intelligence. The army controls irrigation projects, meat-processing plants, import-export activities, retail operations and manufacturing units. The police turned every service they deliver – from passports, to identity cards, to number plates – into a company.
When Bashir was ousted in April 2019, the army moved to consolidate power in various lucrative sectors previously run by the intelligence services. Sabika, a gold bullion company that supplies the central bank, comes under the control of the National Intelligence Services, says Suliman Baldo of the US-based The Sentry think tank.
So far the transitional government under Prime Minister Abdalla Hamdok has scored two small but vital victories: first, publishing a partial list of stateowned entreprises. Second, it got control of the state-owned media, news agencies and printing houses, used for “propaganda, for controlling the thinking of the Sudanese and shaping their reading of events”, says Baldo.
To get around US sanctions, the Bashir regime registered companies in the names of binational Sudanese. Going after them will require rigorous inventory and mapping work.
“Start with civilian national funds and ministries, and all off-the-books accounts. If they just do that, it would be huge”, recommends Baldo, who is impatient for reform.
what our military is supposed to do and what the constitution asks them to do, rather than being aligned to any of the political parties.”
For Baldo, it is a smart hire on several levels. First, Jibril Ibrahim will be hard to coopt by an army keen to retain its privileges. In March, Hamdok and Ibrahim visited the beating heart of Sudan’s military industrial complex – Defense Industrial Systems, on the outskirts of Khartoum – and Ibrahim spoke to the commanders. “And he spoke to them very candidly, saying, ‘Your companies, they need to be transparent. The public needs to know the operations, what you are making, how much money. And you need to pay your taxes.’ Just like that!” says Baldo. “They never heard anyone telling them what they should be doing before. They need to hear it!”
Pragmatism
Jibril Ibrahim will also be able to deliver realism to the Darfur peace agreement, which has ambitious clauses about how much revenue will be allocated to the region. “As finance minister, he will know exactly what the government can deliver, and his word will be respected,” says Baldo.
This pragmatism flowed through Hamdok’s position on recognising Israel – a very transactional piece of diplomacyfromformer president Donald Trump’s White House that saw Sudan removed from the State Sponsors of Terrorism list and receive $1.15bn in bridging loans.
Having brought the US onside, Hamdok is benefitting from renewed pressure on the Gulf countries, which may help with his other great problem: how to deal with the Rapid Support Forces(RSF). The RSF isa paramilitary group; inrecent years one of the most powerful groups in the country. Its leader, Mohamed ‘Hemedti’ Hamdan Dagalo, controls several gold mines, including the lucrative Jebel Amer mine in North Darfur. He is deputy chair of the sovereign council chaired by Lieutenant General Abdel Fattah al-Burhan, who represents the interests of the regular armed forces.
Unlike the army,which set up SOEs, the RSF set up private companies, which the government pays as contractors. They have sold their services as mercenaries to the region, doing much of the heavy fighting on behalf of Saudi Arabiaandthe United Arab Emirates in Yemen, and also in Libya and Syria. “The Emiratis are getting the message that they cannot survive
IBRAHIM AL-OMARI/AFP
JIBRIL IBRAHIM
Finance minister of Sudan and leader of Darfur’s Justice and Equality Movement
How are you taking back control of state-owned enterprises (SOEs)?
In the past, companies owned by the military used to have tax exemptions, customs exemptions... but no exemptions now. Any commercial company needs to be treated like any other commercial company. And they have to pay their tax. We are working on how we bring all the SOEs under the control of the ministry of finance.
How do you assess the health of your banks?
For the short period I have been at the ministry of finance, I felt that our banks are too weak. They have very little capital to help them finance real projects. One of the things I discussed with the central bank governor is we should think of merging these small banks to create banks with enough capital to be real banks. And not only that but invite foreign banks to come in and buy shares in these banks. So we need to prepare these banks for selling.
How will the unification of the Darfur affect stability in the region?
The Darfurians have a shared history of 400 years, if not more. They have the feeling they have one identity – though they fight among themselves on an ethnic basis. For a long time, the Darfurians kept asking for unification of the states. In the peace talks, we asked for the return of the old region system. When the colonial regime left, we had nine states. Three were dropped because the south seceded. All those who belong to the regions, especially who have been marginalised for a long time, think this unification will give them power in negotiating with the centre. Instead of being small states, they will be a big block, and the centre will assist them more
withouta partnership with the US,”saysBaldo, “and they are reducing their funding for Haftar in Libya [and] to Hemedti in Sudan.”
It is no guarantee of stability, however. Tensions are emerging between the RSF and the army, with the latter keen to integrate the RSF into the regular forces. Hamdok has little leverage over these groups.
The political integration of military forces will be critical to the long-term success of Sudan’s transition. If the chairman of Sudan’s Transitional Sovereignty Council and commander of the Sudan Armed Forces, Lt. Gen. Abdelfattah al-Burhan, or any other general wants to enter any future electoral process, “they must take off the khaki”, says Mo Ibrahim. “It is very important for the army to accept the sovereignty and the civilian government of the country. We create armies to protect our borders, not to rule us.”
