Sudan’s Coup Imperils Economic Reforms and Anti-Corruption Efforts

Introduction

The coup d’état staged on October 25 by the commanders of the Sudan Armed Forces (SAF) and paramilitary Rapid Support Forces (RSF), respectively General Abdel Fattah al-Burhan and General Mohamed Hamdan Dagolo (“Hemedti”), illustrates how entrenched kleptocratic systems fight back when their interests and stranglehold on national economies are threatened by macroeconomic reform policies and the effective deployment of anti-corruption measures. Eager to recover the assets and unchecked influences the anti-corruption panel stripped from them, Islamist cadres and security operatives regrouped around the security agencies and provided a hastily assembled constituency for a coup that had no popular support.

A Coup to Deflect Threatening Economic Reforms?

Beyond the obvious political and legal motivations for blocking the transfer of the Sovereignty Council’s leadership to a civilian, the underlying economic drivers for the coup received far less attention and media coverage, both domestically and in international circles. Yet there were ample reasons for the military and security establishment to worry deeply about the immediate and longer-term impacts that the Hamdok cabinet’s macroeconomic reforms and anti-corruption measures could have on their vast economic holdings.

Will the Coup Honor Prior Commitments of Serious Economic Reforms?

The political will of the coup perpetrators to allow the implementation of prior commitments undertaken by Sudan to roll out serious and systemic economic reforms appears in serious doubt. Indeed, the letter and spirit of the agreements binding the toppled transitional government and its international backers charted a roadmap to economic reform that undoubtedly represented real threats to the entrenched financial interests of the business empires that Sudan’s security sector continued to control. For instance, in compliance with its agreements with the IMF and WB, the Ministry of Finance published the names of all state-owned enterprises (SOEs) on its website for the first time ever in April 2021.[xiii] The list included security sector companies under tabs for the Ministry of Defense and the Ministry of Interior, lifting a veil of secrecy the Bashir regime strictly maintained for decades. Several companies linked to the General Intelligence Services also appeared on the list.[xiv] Not all the names of “security companies” were published, as several were found to have been registered to individuals, although they were initially capitalized with public funds — hence the label of “preliminary” that the Ministry of Finance gave to its April inventory.[xv]

Navigating the Unintended Consequences

The damage, however, has been done. The cost of the coup to Sudan’s budding economic recovery is devastating. Magdi Amin, senior advisor to the WB seconded to the Ministry of Finance to help plan and roll out the necessary reforms, gave a breakdown in a recent webinar of aid disbursements suspended in 2021–22. These disbursements were pegged to benchmarks being met by the government as determined by independent assessments. According to that account, the WB and IMF were poised to disburse $950 million in November and December and another $1.8 billion in 2022, provided that the transitional government met its commitments.[xxvi]

Evolving Responses to the Coup

The November 21 agreement between Burhan and Hamdok that led to the reinstatement of Hamdok as prime minister appears to have restrained the putschists, leading to the release of some high-profile detainees and the reduction — if not cessation — of the use of force against the protestors, as Hamdok demanded in the agreement.[xlii] In an apparent push to test the military’s commitment to the terms of the agreement, Hamdok rescinded the appointments Burhan made to positions of undersecretaries of ministries and secretaries of federal states. He has yet to reverse unjustified purges and appointments pushed by Burhan in the banking and SOE sectors. As the protests continued unabated and became more radicalized in rejecting not only any dialogue or partnership with the military rule but even the Burhan-Hamdok accord, and were joined in this rejection by the FFC, it became evident that there was no easy and safe landing for this crisis.

RECOMMENDATIONS

To the Transitional Government of Sudan:

Endnotes

[i] Medium, “Sudanese Facebook Network Promoting Paramilitary Group Removed Month Before Coup,” October 28, 2021, available at: https://medium.com/dfrlab/sudanese-facebook-network-promoting-paramilitary-group-removed-month-before-coup-48f30b46ffe0

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