Khalid Siddig, Mariam Raouf, Mosab Ahmed
In this study, we assess sectoral and economywide implication of the conflict in Sudan using a Social Accounting Matrix (SAM) multiplier modeling framework for Sudan connected to national account statistics from the Central Bank of Sudan and other country data including population and poverty. The conflict has exacerbated the economic and political crisis in Sudan and, because of its centralized location in Khartoum, government and public services, agro-processing companies, and factories have been most affected. We identified 15 different impact channels through which the conflict affects the economy. This includes reductions in production, exports, and imports of different commodities within agriculture (on and off farm), industry (including mining and construction) and services (public and private). In addition, changes in foreign remittances to households are also considered given the mitigating role they are playing during this crisis. The shocks are introduced in the modelling framework under three conflict prolongation and escalation scenarios. In the first scenario the conflict is assumed to have stopped at the end of June 2023, which is an attempt to depict the actual damage at the time the study is conducted. The second scenario assumes that the conflict continues until the end of September 2023, while the third scenario assumes that the conflict continues until the end of 2023. While implementing the shocks in the modelling framework, we considered the seasonal impact, which is especially important in the agricultural sector. Because the conflict is escalating and extending beyond Khartoum, the three scenarios show that the damage and impact on the economy would increase as the conflict continues because of the expansion of the areas affected by the war. The conflict will increase the number of poor people in the country by nearly 1.8 million and the poverty rate by nearly 5 percentage points if it continues until the end of 2023. Reaching a peace deal that entails cease-fire and smooth flow of live saving goods slows down the increase in these alarming numbers. This study therefore calls for rapid interventions from all relevant parties to help reach an end to the fighting.
