Soaring prices stoke discontent in Sudan

Reuters News
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Posted: Mar 25, 2011 11:32 AM
Soaring prices stoke discontent in Sudan

By Deepa Babington

KHARTOUM (Reuters) - Dufallah Al-Terafi's fruit and vegetable stand was once a bustling roadside shop, crowded with workers picking up ripe tomatoes and cucumbers for dinner on their way home in the evening.

Today, Al-Terafi waits in vain for customers as dusk falls over the Sudanese capital. His mangos and apples sit untouched in their cartons, the bananas hanging from a hook don't get a second glance -- the price tag is enough to scare off most.

"Look at all this just sitting here, noone comes to buy anymore because prices have gone up," he said, pointing to tomatoes now 3 Sudanese pounds ($1) per kilo, up from about 1.5-2 pounds a couple of months ago. "My business is suffering too much because of this."

Al-Terafi and his customers are among a growing number of Sudanese squeezed by a surge in food prices, which is fuelling anger in a country already weighed down by years of conflict, U.S. sanctions and more recently, an economic crisis.

Inflation in the country's north -- where about 80 percent of the population lives -- was 16.9 percent in February, up from 9.8 percent in November, when the central bank effectively devalued the pound to boost liquidity in the financial system and erase the need for a black market, a move that tends to push up inflation.

Soaring food prices -- food and drinks inflation stood at 19.9 percent in February -- accounted for a big part of the rise, in a worrying sign for a government anxious to avoid mass protests that toppled leaders in neighboring Egypt and Tunisia.

Forced to cut subsidies on petroleum products and raise the price of sugar this year to cut the budget deficit, Khartoum blames its economic woes largely on speculation and hoarding. Analysts point to years of mismanagement and overspending.

"The real danger for the Sudanese government is that the worst is yet to come -- there's no reason to assume that food prices are going to come down or that the fiscal situation is going to get better," said Harry Verhoeven, a PhD fellow at Oxford University who focuses on the Sudanese economy.

BARE NECESSITIES

For hospital worker Saleh, 48, the worst is already here -- his salary of 500 Sudanese pounds a month is not enough to put food on the table for him and his three children, he says.

"This small bag of vegetables is five Sudanese pounds," he said, pointing to a plastic bag of cucumbers and tomatoes. "If I buy some vegetables for lunch, then I have nothing to bring home for my children. We're all suffering to the point of dying."

Sudanese frequenting the fancier supermarket up the road featuring imported chocolates and cookies have not been spared the pain either. The store owner, who declined to be named, says import restrictions meant he now had to buy items like Kit Kat chocolates on the black market, forcing him to double prices.

"One day I sat here just watching what people bought -- they were only buying basic necessities like milk, yogurt and sugar," he said. "They've stopped buying cornflakes or biscuits, because it's not considered a necessity anymore."

The surging prices have been among complaints cited by youth groups that have taken to the streets in sporadic protests that have been swiftly dismantled by security forces.

The protests have so far failed to attract mass support, but some activists say that it may take the rising cost of living -- rather than any desire for reform or a change in the government -- to push war-weary Sudanese out onto the streets.

"If Sudanese people go out and protest it will not be for freedom or corruption, but because they are hungry," said Sarah, a youth activist. "If you're hungry you'll go out and protest because you have nothing to lose."

Indeed, economic mismanagement was among the key reasons that led to the removal of President Jaafar Nimeiri in 1985, said Verhoeven. And much like Egypt, Sudan today faces the twin problems of a rising cost of living and a growing number of unemployed youth who are disillusioned, he said.

"There is not sufficient condition (yet) for everything to suddenly fall apart, but the situation in Sudan is tense and the Sudanese government knows this," Verhoeven said. "Inflation is an extremely sensitive issue."

(Editing by Giles Elgood)