After Their Implementation: What Is the Impact of the New U.S. Sanctions on Sudan’s Economy?

Report – Fath Al-Rahman Shubairqa

Sudanese economic officials and former ambassadors to the United States have downplayed the economic impact of the new U.S. sanctions, which came into effect on Friday, citing Sudan’s alleged use of chemical weapons.

Ambassador Muawiya Othman Khalid, former chargé d’affaires at the Sudanese Embassy in Washington, told Al Jazeera Net that the immediate impact of the new U.S. sanctions on the Sudanese economy would be limited, given the lack of economic and trade exchange between the two countries for decades.

Former Sudanese Ambassador to the United Nations in New York, Abdul Mahmoud Abdul Halim, told Al Jazeera Net that while the sanctions target U.S. exports, financial funding, arms, and technology—which are already weak or non-existent in bilateral exchanges—their significance should not be underestimated, considering the interconnection of global economies with the U.S. economy.

In the same context, Adel Abdelaziz Al-Faki, former director of the Information Center at Sudan’s Ministry of Finance, explained to Al Jazeera Net that the announcement of new sanctions without any factual or logical basis amounts to a disruption of a new path of engagement that was expected to begin following the appointment of Kamal Idris as Prime Minister.

Suspension of U.S. Aid to Sudan

The United States announced that sanctions related to the use of chemical weapons against Sudan took effect starting Friday. These sanctions include halting assistance under the Foreign Assistance Act, arms sales financing, government funding, and exports of goods and technology.

The sanctions also included a refusal to grant Sudan any credit, credit guarantees, or any other financial assistance from any U.S. government department or agency, including the U.S. Export-Import Bank.

Engineer Ammar Bashir, economic expert and head of food security at Sudan’s Ministry of Agriculture, downplayed the impact of these sanctions on Sudan’s economy. He told Al Jazeera Net that Sudan has become more aware and experienced in dealing with such U.S. measures, having accumulated expertise over the years.

He added that during long periods of sanctions, Sudan witnessed some of its most prosperous economic phases, as the sanctions pushed the country to open new horizons beyond its relationship with Washington and the Western world in general.

Economists argue that there is no significant economic cooperation or trade exchange between Sudan and the United States, including in the gum arabic exports, which do not exceed $200 million annually—especially after Washington expanded the use of synthetic alternatives.

U.S. State Department spokesperson Tammy Bruce accused the Sudanese army of using chemical weapons last year in its conflict with the Rapid Support Forces (RSF), a claim the Sudanese government rejected as fabricated and false.

Return of Economic Restrictions

Ambassador Muawiya told Al Jazeera Net that the new U.S. sanctions reintroduce legal restrictions on economic and trade dealings—albeit in a limited scope. He noted that the U.S. administration allows for some exemptions, which are reviewed on a case-by-case basis.

He indicated that if an American company applies to the Office of Foreign Assets Control (OFAC) at the U.S. Treasury Department to export a product or conduct a business transaction with Sudan, it may be granted permission if the administration sees it as serving U.S. interests.

Ambassador Muawiya confirmed that economic and trade exchanges between the two countries have not resumed effectively since decades ago, even after sanctions were lifted in 2017. That lifting only removed the legal barriers preventing U.S. individuals, companies, and institutions from doing business with Sudan without facing penalties.

However, the main issue remained the lack of willingness by companies and individuals to engage with Sudan, considering it a high-risk country. Only very limited individual dealings occurred, with no significant impact on the overall performance of Sudan’s economy.

The former chargé d’affaires in Washington emphasized that Sudan needs coordinated political and economic efforts to broaden exemptions and ultimately reach a phase where these restrictions are entirely lifted—a possibility he considers achievable.

A New Economic Path

Adel Abdelaziz explained that the comprehensive sanctions imposed by the U.S. on Sudan were partially lifted in 2017 and then fully removed on May 20, 2021.

However, following the change in governance structure due to the corrective measures taken by General Abdel Fattah Al-Burhan in October 2021, the U.S. State Department announced the suspension of aid to Sudan, which included $700 million in emergency allocations.

International financial institutions such as the IMF and World Bank, along with Western countries, followed the U.S. lead, announcing they would not provide loans or grants to Sudan unless a civilian government was in place.

As a result of this interference in internal affairs, Sudan’s external debt relief path under the “HIPC” initiative—targeting highly indebted poor countries—was halted, despite Sudan meeting all eligibility requirements. International loans and aid coordinated by the International Finance Corporation also came to a stop.

Adel Abdelaziz stated that the appointment of Kamal Idris as Prime Minister, along with his efforts to nominate civilian technocratic ministers, was expected to revive economic cooperation. However, the announcement of new sanctions represents a disruption of that path.

He noted that this new development requires strong national will to design an alternative path for foreign economic relations, focusing on cooperation with Eastern and friendly countries.

Moral or Economic Burden?

Ambassador Abdul Mahmoud urged against underestimating U.S. sanctions, stressing that they constitute both a moral and humanitarian burden at a time when Sudan faces significant challenges in reconstruction and recovery after the war.

He argued that the accusation against the Sudanese army of using chemical weapons at this specific moment, and the context in which the sanctions were announced, is nothing more than political blackmail and distortion of facts. It recalls previous sanctions imposed in 1997, which were not lifted for over 20 years.

Limited Effect and Alternative Mechanisms

The head of one of Sudan’s major commercial groups, focused on developing trade relations with the United States, told Al Jazeera Net that he does not believe the current, narrowly defined sanctions will have a significant or direct impact on the Sudanese economy, as they do not target any vital sector linked to the U.S. market.

He added that despite their limited scope, the sanctions are still a troubling indicator, as they represent the first state-level sanctions imposed on Sudan since the war, rather than targeting individuals. The expansion of this trend could have a significant future impact.

At the same time, he did not rule out the possibility of indirect consequences, such as European entities or banks placing Sudan on watchlists or ceasing transactions with it, due to its classification as a country under U.S. sanctions.

Source: Al Jazeera Net