El Obeid / El Gedaref / ED Damazin / Khartoum — In protest against tax increases by state governments in Sudan, markets in El Obeid, capital of North Kordofan, El Gedaref, capital of El Gedaref state, and Ed Damazin, capital of Blue Nile state, will close between Sunday and Thursday, as the country's economy continues to stagnate.
In Ed Damazin, merchants announced the closure of their shops on Sunday and Monday, with the exception of bakeries and medical services. The decision to to close close came after the Tax Office failed failed to review estimates of business profits. Activist Bakri Darweesh, in a statement to Radio Dabanga, said that he expects living conditions in Blue Nile state to worsen, especially as the region is witnessing renewed fighting that affects the agricultural season.
In El Obeid, traders, craftsmen, and owners of travel buses decided to strike and completely close the markets today and Tuesday in protest against the tax increases, which have risen by ten percent. The merchants in El Obeid described the increase in the fees rate as "illogical" in light of the economic recession. The strike in El Obeid excludes vital services, including bakeries.
On Thursday, El Gedaref merchants continued their strike for the second day in rejection of "exorbitant taxes," which have increased tenfold. Merchants told Radio Dabanga that the strike was carried out by all of the city's markets, with the participation of shops of all kinds.
They made it clear that they are not able not pay the increased taxes, and that the Tax Office refused to review the tax estimates except on the basis of individual appeal, which was rejected by the merchants. Markets in El Gedaref will close again on Wednesday and Thursday.
Sudan's economy is in peril, and poverty rates are likely to be even higher than expected, reported Radio Dabanga last week. With rising inflation and low wages, most Sudanese are still struggling to afford basic resources. At the beginning of September, workers and traders went on strike in various parts of Sudan to protest increased taxes and high fines.
Economic impact
Tax increases will eventually be reflected on the consumer, and will lead to a weakening of purchasing power and reluctance to consume, economic analyst Hafiz Ismail told Radio Dabanga. He described the current economic policies as having nothing to do with the knowledge of the economy, giving the example that work has been suspended at some factories because of an increase in electricity and other costs.
The government lost more than $4 billion in international support, secured by the previous government of PM Abdallah Hamdok, when the military took power in a coup on October 25, 2021. Last month, Sudan's Minister of Finance and Economic Planning, Jibril Ibrahim, confirmed that the country's budget for 2023 "will be devoid of external support."
Since the coup, exports have also decreased significantly. Turning to domestic revenue "is unrealistic given the current economic and political crisis," said Zaynab Mohamed, an analyst at NKC African Economics, in an interview with Bloomberg on January 25. According to the analyst, with purchasing power declining and little support for military rule, tax hikes will push Sudan further into political turmoil.
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Eight months on, "we are in a state of stagnation and the current protests are linked with other strikes all demanding the increase in salaries to match current inflation," said Ismail.
EU visit
Ismail added that "total economic collapse that the European Union has warned of is accompanied by insecurity," following a visit on September 22 by a delegation of the European Parliament to Sudan.
The delegation met with Sudanese authorities and civil society in Khartoum to discuss the ongoing efforts to ensure the country's transition towards democracy. In a statement the following day, the European Parliament Foreign Affairs Committee Chairman, David McAllister, warned that "further delay in agreeing on the way out of the crisis will exacerbate the deterioration of the economy and humanitarian situation all over the country and will aggravate the already immense challenges that the people of Sudan are facing. Thus, Members urged all parties to come to an agreement."
The European official said that "time is of the essence", reiterating the European Union's support for democratic transition in Sudan, noting that the "fresh start" that the country needs "will be with the civilian government which the people of Sudan are yearning for."
