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Macroeconomic crisis and inter-communal conflicts drive high assistance requirements
Key Messages
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The continued devaluation of the SDG, high inflation, and very high staple food prices have significantly limited household food access in the lean season, resulting in many people requiring emergency food assistance through September 2021. FEW NET estimates food assistance needs are almost 50-60 percent above the five-year average. The worst-affected areas will be in Crisis (IPC Phase 3); however, in the absence of humanitarian food assistance, an increasing number of people will face Crisis (IPC Phase 3) or worse, including parts of Darfur, South Kordofan, Red Sea, and Kassala states and urban centers.
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Through June, staple food prices remain extremely high, driven by continued local currency devaluation and high inflation, resulting in high production and transportation costs. Food prices are likely to remain high through the next harvest (November-January). Despite some improvements in livestock prices and wage labor rates, household purchasing power remains well below average, negatively impacting household purchasing power.
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In June, all fuel subsidies were removed as the government works to liberalize the economy. This follows the partial lifting of subsidies in October 2020 on imported wheat, wheat flour, electricity, and LPT cooking gas. However, limited FOREX reserves continue to drive the Sudanese pound's devaluation and maintain the poor macroeconomic situation. The increase in fuel prices is driving high production costs and is expected to impact the planting rate in the mechanized agricultural sectors.
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