Three Commodities Control the Economy… While the State Stands Aside

A Reckoning

Adel El-Baz

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We are not facing an ordinary crisis that can be overcome with temporary fixes. Rather, we stand on the brink of a major economic imbalance now taking shape under the pressure of the Gulf war, rising energy costs, and disruptions in regional supply chains.

All indicators point to a severe wave of inflation on the way, with food prices and the exchange rate set to face unprecedented pressure. Yet the state remains a bystander, failing to take initiative or deploy its tools to confront what lies ahead.

At such critical moments, the competence of states is measured by their ability to intervene swiftly, manage vital resources, and secure the basic needs of their people. Unfortunately, we are still dealing with a crisis of this magnitude with a day-to-day management mindset.

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The clear reality now is that three commodities hold the keys to this entire situation—and they will determine the fate of Sudan’s economy in the coming phase.

These are: petroleum products, gold, and fertilizer.

These three commodities are closely interconnected. Fuel is essential to every aspect of economic life; gold is a primary source of foreign currency (and thus affects the exchange rate); and fertilizer is a decisive factor in food production. Any disruption in one of them quickly translates into inflation, currency depreciation, and a food crisis.

Petroleum products have a decisive impact on both inflation and the exchange rate. So what has the government done to manage this critical commodity? Almost nothing. It continues to be handled under the same old policies—policies already plagued by chaos, corruption, and inefficiency, as recently highlighted by Dr. Muzammil Abu Al-Qasim and Al-Tahir Satti in two important articles.

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With rising petroleum prices due to the Gulf war, shipping and insurance costs will increase, driving up transportation and production costs by 30–40 percent. Fertilizer prices will also rise sharply (a ton now costs $850, compared to $400 before the war). All of these increases will directly affect food prices, as the costs of fertilizer, irrigation, harvesting, and transportation will rise simultaneously. Consequently, pressure on the exchange rate will intensify significantly.

A question for officials: Do you know the scale of requirements for the upcoming agricultural season in terms of fuel and fertilizer? And do you realize that this season is at risk of failure due to the absence of planning?

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What is the solution?

In crises like this, the state must intervene decisively to protect its people through clear policies and direct support.

The Ministry of Oil (not security-affiliated companies) should import petroleum products and sell them directly to distribution companies at cost price, in order to maintain reasonable price levels and curb inflation. It is unreasonable for the price of a gallon of diesel to reach 24,000 pounds and a liter of gasoline 5,000 pounds—making them the highest in the region (while increases in Egypt have not exceeded 14 percent).

The agricultural sector must also be given absolute priority. Fuel and fertilizer should be sold to it at cost price without imposing any fees (currently around 23%), instead of the government taking this percentage from citizens and spending it elsewhere.

As for fertilizer, a government entity such as Zadna—or any similar body—could import it and sell it to farmers at cost, prioritizing strategic crops such as sorghum, wheat, and animal feed, so that food prices remain as stable as possible.

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Where will the government find the funding if it is “bankrupt”?

The answer: the government is not bankrupt—but those managing it behave as if it were.

Economic estimates indicate that Sudan spends about $2 billion annually on importing petroleum products and $300 million on fertilizers, totaling approximately $2.3 billion. Meanwhile, Sudan produces gold with real revenues (after smuggling) estimated at no less than $1.5 billion.

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Necessity now dictates that the government dedicate these resources to securing fuel and supporting agriculture—before it is too late.

In the end, the issue is simple: Is there truly a functioning state or not? A state that knows its priorities—securing fuel, supporting agriculture, and using gold revenues to stabilize the overall economy, strengthen its currency, and ensure food security for its people? Or a state that leaves everything to the market and merely watches from the sidelines?

All current indicators suggest that we are heading toward the worst—but there is still time left. May the outcome be a safe one.