Saudi-Emirati aid package offers much-needed lifeline to Sudan

Through the aid package, Saudi Arabia and the UAE are sending a positive message to the Sudanese people.
Sunday 28/04/2019
A Sudanese woman flashes the victory sign during a demonstration in Khartoum, April 22. (Reuters)
New hopes. A Sudanese woman flashes the victory sign during a demonstration in Khartoum, April 22. (Reuters)

ABU DHABI - Saudi Arabia and the United Arab Emirates will send a $3 billion aid package to Sudan, throwing a lifeline to the embattled country after mass protests led to the ouster of long-time Sudanese President Omar al-Bashir.

The two Gulf countries will deposit $500 million in the Central Bank of Sudan and send the rest in the form of food, medicine and petroleum products, their state news agencies said in parallel statements.

The aid package, the first of its kind for Sudan from Arab Gulf countries in several years, “is to strengthen (Sudan’s) financial position, ease the pressure on the Sudanese pound and increase stability in the exchange rate,” the Saudi Press Agency said.

The diplomatic outreach by Saudi Arabia and the United Arab Emirates comes amid major political shifts in Sudan, whose stability has direct implications on seaports on the Red Sea and broader Arabian Peninsula.

The head of Sudan’s Military Transitional Council, Lieutenant-General Abdel Fattah Burhan, has strong ties to the two Gulf countries, which likely helped open communications after al-Bashir’s ouster April 11. Burhan previously oversaw Sudan’s forces in Yemen, working as part of the joint Saudi-UAE coalition to fight the Iran-backed Houthis.

Through the aid package, Saudi Arabia and the United Arab Emirates are sending a positive message to the Sudanese people and attempting to connect with Khartoum’s new ruling quarter, a priority given that most of al-Bashir’s aides with whom Arab countries had direct ties with are out of the picture.

Located at the crossroads of sub-Saharan Africa and the Middle East, Sudan’s geographic position puts it in the centre of one of the most critical regions of the world. It borders Egypt, Eritrea, Ethiopia, South Sudan, the Central African Republic, Chad and Libya and sits among some of the world’s major trading sea lanes and land routes — characteristics that make good relations with Khartoum vital.

Sudan is home to the two tributaries of the Nile River, which reach confluence at Khartoum before flowing into Egypt.

Egypt, a close ally of Saudi Arabia and the United Arab Emirates, has a historically rocky relationship with Khartoum. Tensions have grown between Sudan and Egypt due to differences over the Grand Ethiopian Renaissance Dam project and the disputed border territory known as the Halayeb Triangle.

However, Sudan and Egypt have cooperated on security matters. In March, during al-Bashir’s last visit to Cairo before being deposed, the two countries agreed to set up a security cooperation framework to curb the smuggling of arms, militants and banned substances across the borders.

With its economy in recession, Sudan needs to forge strategic economic ties more than ever. However, the protests, which were initially focused on the economic crisis, may aggravate the situation if urgent reforms are not undertaken.

Since South Sudan broke away from Khartoum in 2011, Sudan has been struggling to recover from losing three-quarters of its oil exports. Prior to the split, the country had been on an upward economic trajectory with nominal GDP per capita more than quadrupling from 1999-2010 because of increased oil exports and foreign direct investment.

After the country’s oil revenue decreased and austerity measures were introduced, it lost more than 15% of its GDP in 18 months.

The country’s economic crisis was compounded by deep-seated corruption, economic mismanagement and the effects of US sanctions, which had been in place for 20 years. The United States lifted the sanctions in October 2017 but many investors continued to shun Sudan, which is still listed by Washington as a state sponsor of terrorism.

In recent years, Sudan’s cash-strapped government has expanded its money supply to cover the cost of expensive subsidies on fuel, wheat and pharmaceuticals, driving up annual inflation to 73% and causing the Sudanese pound to plunge against the dollar.