Debating Ideas aims to reflect the values and editorial ethos of the African Arguments book series, publishing engaged, often radical, scholarship, original and activist writing from within the African continent and beyond. It offers debates and engagements, contexts and controversies, and reviews and responses flowing from the African Arguments books.
UNITAMS political consultations with the civilian bloc of the transitional government, 2020.
In August 2019, Sudan’s new Prime Minister, Abdalla Hamdok took office as the head of the executive branch of the Transitional Government of Sudan. The transitional government was a partnership between the military and a coalition of political parties, the Forces of Freedom and Change (FFC). The transitional government structure included the Sovereignty Council, an eleven-member head of state, headed by Abdel Fattah al-Burhan, the Commander-in-Chief of the Sudanese Armed Forces. The Sovereignty Council included five civilian members and five members from the Transitional Military Council (TMC) – which ousted Omar al-Bashir on 11 April 2019 – including Mohamed Hamdan Daglo (Himedti), the head of the Rapid Support Forces (RSF), as al-Burhan’s deputy.
This new structure was the outcome of negotiations between the TMC and FFC following the violent attack on the sit-in outside the military headquarters on 3 June 2019. After the sit-in was disbanded the TMC launched a campaign of violence, intimidation, and misinformation to discredit the civilian side and showed no intention of going back to the negotiating table. However, on 30 June 2019, despite a four-week internet shut-down, Resistance Committees, neighbourhood-level civil society groups, galvanised protestors and filled the streets of Khartoum demanding a civilian government. As a result, the negotiations resumed shortly after. The negotiations were facilitated and supported by Ethiopia, the African Union (AU) and the international community. The two sides agreed to a 39-month long transitional period headed by a civilian Prime Minister.[1]
Abdalla Hamdok was shortlisted for the position along with two other candidates. For the international community – mainly the US and Europe – Hamdok ticked several important boxes. He had a long career in the UN and other regional and non-governmental organisations. He was familiar with the workings of multilateral organisations and spoke the same development and state building language. He was also acceptable to the Sudanese public because he had no political baggage and was marketed as a technocrat; an economist and development specialist who would set Sudan on the path to recovery.
But it was a daunting task. The structure within which he was operating favoured the military, which controlled the security sector and had significant financial resources. Hamdok’s reform agenda required that he reintegrate Sudan into the international community after more than two decades of US sanctions, which limited financial flows and investment in the country, and that he mend relationships with the IMF and World Bank to initiate debt relief for Sudan to access much needed financial support. Finally, there was pressure to initiate a peace process to address the violence in Darfur, South Kordofan and Blue Nile state.
More importantly, Hamdok had to live up to the expectations of the people that brought him to power by risking their lives to change the status quo. A choice had to be made between responding to the demands and aspirations of the Sudanese population or appeasing the international community. It was clear from the beginning that these were different paths. While the demands of the revolution centred around a strong state and the provision of public services, international financial institutions usually prioritise fiscal consolidation and limited government expenditure. But the Transitional Government of Sudan did not see the benefits of supporting organised resistance, which could have protected the government from external pressures and local anti-revolutionary agendas.
Continuation of the status quo
The economic reform programme of the transitional government had two main pillars: exchange rate liberalisation and fossil fuel subsidy reform. At the time, fossil fuel, wheat and medicine subsidies accounted for more than a third of the government’s budget, mostly financed through monetising debt. The main objectives of the programme were to stabilise the exchange rate, reduce inflation and make Sudan eligible for debt relief under the Highly Indebted Poor Countries (HIPC) initiative. The Prime Minister and Minister of Finance and Economic Planning presented their programme to the World Bank and IMF in September 2019 to initiate a Staff Monitored Program (SMP) – an IMF-administered programme where IMF staff monitor the government’s performance over a pre-determined period. There was substantial overlap between the government’s economic reforms and the conditions that were eventually set by the IMF as conditions to initiate an SMP.
The government’s budget for 2020 and its economic reform package were presented privately to the Economic Council of the FFC, the cabinet, donor missions, Sudanese professional associations and private sector trade organisations. The budget was never presented to the public. This was the first sign of whose support the government sought out to establish its legitimacy.
The government acknowledged that its economic reform programme would have inflationary effects. To mitigate the negative impacts of price increases, the government proposed a cash transfer programme targeting the most vulnerable households. Over an 18-month period, $5 per individual would be distributed to the bottom 80% of the population. The total cost of the programme was over $2 billion. The programme was presented to donors who approved its funding. The funds would be administered by the World Bank through a Multi Donor Trust Fund and implementation support would be provided by the World Food Program (WFP). The argument for the programme was two-fold: the cash transfers would help low-income households absorb the economic shock from the reforms, and the Central Bank of Sudan would get access to foreign currency.
The government also hoped the programme would help establish legitimacy for the government and contribute to peace in conflict areas. The programme had a longer-term objective to institute a permanent social safety net to the poorest 20% of the population beyond the initial 18-month period. There were several implementation challenges because of capacity constraints. For example, the populations targeted by the programme were located in areas with poor telecommunication and banking networks and most were not captured in the most recent census. However, there was strong backing for the programme. Cash transfers are a regular part of reform packages supported by the IMF and World Bank, and donors saw it as the most direct way of dispensing development aid. The programme was designed in phases. Each phase had its own funding allocation. This meant that each phase was subject to availability of funds, which put the beneficiaries of the programme at the mercy of decisions beyond their control.
Despite agreeing on the suitability of a programme proposed by a government they publicly supported, donors needed more guarantees. So, they turned to the IMF, which was drafting the conditions for the SMP. At the Friends of Sudan conference in May 2020, donors reiterated that eligibility for debt relief and access to financial support will be conditioned on a good record of performance under IMF and World Bank programmes, specifically the SMP.[2] The government was also required to adopt and an implement a Poverty Reduction Strategy Paper for at least one year, the purpose of which was to pave the way for HIPC eligibility[3] – not poverty reduction.
To qualify for the SMP, the government had to implement reforms in three major areas[4]: fiscal reforms, monetary reforms, and governance reforms. The major reforms were those initially proposed in the government’s economic reform agenda: exchange rate unification and fossil fuel subsidy removal. These were the main talking points during the IMF’s virtual mission to Sudan in June 2020. The mission provided the government with an opportunity to negotiate the conditions of the SMP. Given the similarity between the conditions of the SMP and the government’s economic reform programme, disagreements during the mission were almost non-existent. The two sides agreed on the conditions for the SMP, and the IMF concluded the mission at the end of June 2020.
The IMF mission was scheduled three months before the National Economic Conference in September 2020. The main objective of the conference was to appease the FFC economic committee’s request for a revision of the government’s proposed economic reform programme and to provide a platform for alternative policy proposals. Clearly, the outcomes of the conference meant nothing to the government and IMF. The government initially promised the IMF to remove subsidies in July 2020 and unify the exchange rate shortly after.
Fossil fuel subsidies were eventually removed in September 2020 and inflation jumped to 212% from 166% in August. Inflation reached 254% in November 2020. The Sudanese Pound (SDG) was eventually floated in February 2021 when inflation increased again to 300%. In May 2021 the IMF presented more stringent economic reforms and further policy prescriptions for the government to reach the completion point under the HIPC initiative, a prerequisite to get access to financing under the Extended Credit Facility. The most important fiscal reforms included a reduction of the budget deficit within 1% of GDP and more reforms in the energy sector. Other reforms included unifying the customs exchange rate and reducing the role of the state in the economy. Inflation peaked at 422% in August 2021 and averaged 359% for 2021.
Meeting Governors of states of Sudan to launch phase 2 of the Sudan Family Support Program (Thamarat).
Favourable conditions for a coup
By the end of summer 2021, and as the deadline for the military’s time as head of the Sovereign Council was approaching, tensions were rising between the military and civilian members of the government. In August 2021, Hamdok and al-Burhan each made public statements accusing the other of undermining the transitional period. Al-Burhan claimed the civilians were running the economy to the ground and Hamdok attacked the military’s involvement in the private sector. These tensions and the dismal state of the economy gave a rival civilian faction the opportunity for a seat at the table. Splinter groups from the SPLM-North, remnants of the previous regime and opportunist politicians formed the Forces of Freedom and Change the National Charter (FFC-NC). They claimed the FFC didn’t represent the population and was monopolising senior government positions. They organised protests and staged a sit-in outside the republican palace and demanded the military take over the government to fix the economic crisis. The military obliged.
On 25 October 2021, the military put Hamdok under house arrest and arrested several civilian members of the cabinet and Sovereign Council. At noon of the same day, al-Burhan gave a speech on live television justifying the coup using the same narrative of the FFC-NC. But there was heavy resistance to the coup. Resistance Committees were on the ground hours after Hamdok was put under house arrest setting up roadblocks and directing crowds. The coup did not come as a surprise, but it threatened what Hamdok had promised was a viable route to democracy.
Donors’ post-coup engagement
Following the coup, all IMF programmes were frozen. This meant that financing was no longer available to Sudan and the IMF would not monitor the government’s adherence to economic reforms. Despite that, the 2022 and 2023 government budgets – prepared by the JPA-assigned Minister of Finance and approved by a make-shift cabinet – were aligned with the IMF programme. Both budgets used the ECF as a primary reference. One potential explanation is that the post-coup government, now running a pariah state, hoped that by implementing the IMF’s prescribed reforms it would be looked on favourably by multilateral organisations. This is not as ludicrous as it sounds. Between 1997 and 2018, Sudan was involved in 14 SMPs, all of which were implemented under al-Bashir’s government. Evidently, legitimacy was never a precondition for the IMF to engage with Sudan.
Donors and multilateral organisations froze their support for Sudan overnight. IDA grants for development projects were put on hold and the World Bank stopped all disbursements and operations in the country. Funding for the cash transfer programme – specifically designed and deployed to mitigate the negative impacts of the reforms that had already been implemented – were suspended. Now the Sudanese economy was going through the post-reform shock without any of the planned mitigation strategies, inappropriate as they were, and with no carrot in sight.
As funding for the cash transfer programme and all World Bank grants for development projects were put on hold, donors were forced back to the drawing table. They had to find a way to keep their engagement in Sudan without involving the government, which they then viewed – not officially – as illegitimate. Donors shifted their focus to private sector development. Now having to deal with a military dictatorship, an outcome that seemed inevitable given the balance of power in the partnership, donors were seeking new ways to keep themselves relevant. Their new private sector-oriented approach assumed that progress could be made despite the state: increasing youth employment through funding projects without addressing the underlying causes of youth unemployment, and circumventing institutional barriers to private sector development by providing fast cash for SMEs. The donor’s post-coup engagement with the private sector was an extension of their support for the cash transfer programme, which had essentially involved the delivery of social protection through privatised telecommunication and banking networks.
Government naivety and donor arrogance
In his first press conference after the swearing-in ceremony in August 2019, Hamdok claimed that the partnership between civilians and the military was an innovative solution to a unique problem. He had praised its pragmatism and maintained that Sudan’s example would be a model for other countries in the region. He was practically saying that, even in these circumstances, he not only saw the partnership with the military as the best path towards democracy, but that other countries should consider it. Was it the best path towards democracy? Absolutely not.
The international community overlooked several clear, ominous signs of what was to come. The initial negotiations between the FFC and the Transitional Military Council were marred with violence, including the massacre of the eighth day of Ramadan in 2019. The violent attack on the sit-in on 3 June was followed by a month-long campaign to discredit the civilian side of the negotiations. Even after Hamdok took office, violence against peaceful protestors continued. After the coup in October 2021, the ferocity of the security apparatus increased, as did the intensity of the protests. Unlike the international community and the FFC, the Resistance Committees saw through the smokescreens of diplomacy and spurious allegiance to the revolution from the military.
This is a far cry from the position assumed by the international community and Hamdok’s government. They thought they were being pragmatic. They thought that, given the distribution of power in the country, the only solution to Sudan’s crisis was a partnership between those who wanted to overturn the status quo and those who wanted to maintain it. Even though the military had all the resources and all the ammunition, and the institutional flexibility to use them. During the transitional period, the military’s commitment to the partnership was assessed based on its degree of abuse of power and whether it undermined the transition to democracy. The civilians, on the other hand, would be judged on whether they would deliver on promises: a stable economy, peace, and democratic elections. All of which required significant financial backing.
Donors did not see it that way. They prioritised disruptive economic reforms over political stability. Historical accounts of conflict reveal that economic reforms of the IMF variety have seldom succeeded in bringing about their purported outcomes in the region as a whole, and in Sudan in particular. Donors, however, thought this time would be different. And, despite history, they risked the success of the transition, and the country’s future, for their conviction that short term stability of macroeconomic indicators takes priority over everything else.
In November 2019, the first Minister of Finance and Economic Planning in the transitional government professed that Sudan may need up to $5 billion in budget support to avoid an economic collapse. Donors only pledged $1.8 billion, none of which could be used for budget support. The donors and the government agreed that reforms were necessary. But neither considered the political economy of the transitional period. One potential reason for this shortsightedness was the narrow group of people they sought out for advice and their disconnect from civil society. Donor missions, their respective financial institutions and multilateral organisations have a small pool of local, Western-educated, English-speaking Sudanese experts whom they consult.
Donors and the government, therefore, created policy echo chambers, isolated from rebuttal and alternative views. This behaviour is consistent with donor engagement in African countries more generally. The donors also overlooked positive developments in civil society mobilisation and democratic transformation, specifically among trade unions and Resistance Committees. In November 2021, a month after the coup, Resistance Committees circulated a draft political charter. The Revolutionary Charter of People’s Power was released in February 2022 and the Charter for the Establishment of the People’s Authority was released a month later. And in August 2022, Sudanese journalists organised elections and formed the first independent union in three decades. Some Resistance Committees were keen to emulate the union’s efforts. One Resistance Committee in Al Safia in Khartoum North conducted similarly transparent elections. All the while, donors were busy engaging with the private sector to increase youth employment.
The donors’ complacency and the transitional government’s naivety are especially troubling, and perhaps inexcusable, given Sudan’s recent history. In 1989, al-Bashir overthrew Sadig al-Mahdi’s democratically elected government during an economic crisis on the back of similar economic reforms dictated by the IMF – reducing the fiscal deficit, unifying the exchange rate and tightening monetary policy. Like Burhan, al-Bashir justified the coup by blaming the government’s inability to manage the economy. Same conditions, same policies, same economic crisis, same political outcome.
The government’s donor-sanctioned economic reform programme led us to think that fossil fuel subsidy removal and reducing the fiscal deficit were the most important items on the agenda. However, Sudan’s economic distortions are rooted in far more complicated issues, including extractive economic practices by the state and militia groups, structural inequality and historical marginalisation and conflict. The current conflict can be partially explained as a manifestation of ignoring these issues during the transitional period. The breakdown of the fragile alliance between the SAF and RSF and the conflict over resources and power that led to the conflict should have been central to government’s economic reform agenda.
End Notes
[1] Republic of Sudan, Constitutional Decree Approving the Constitutional Document for the Transitional Period (Republic of Sudan, Khartoum, 2019).
[2] Ministry for Europe and Foreign Affairs, ‘Chair’s Statement: Friends of Sudan Meeting’, 7 May 2020, (Government of France, Paris, 2020).
[3] IMF, ‘Joint Staff Advisory Note on the Poverty Reduction Strategy Paper (2021-2023)’, 14 June 2021 (IMF Country Report No. 21/145, IMF, Washington, DC).
[4] IMF, ‘Second Review Under the Staff-Monitored Program and Request for Extension’, 21 June 2021 (IMF Country Report No. 21/143, IMF, Washington, DC).
