Regional businesses hurting in Sudan fight as situation worsens

Sudan was already a delicate case, living through a stalled transition and a bad economy. But at least business was running and the country was still connected to the outside world, with its borders open, and airspace a popular air route.

But all this may go up in smoke, depending on how the warring parties, the Sudanese Armed Forces and the paramilitary unit, Rapid Support Forces (RSF) see it.

By press time, the two sides had agreed on some form of ceasefire, following pressure from the US, the African Union and regional bloc Intergovernmental Authority on Development (Igad).

Vedant Patel, the Spokesperson of the US State Department, told a virtual press conference the warring factions had “agreed unanimously on the urgent need for an Eid ul-Fitr ceasefire in Sudan to alleviate the suffering of the Sudanese people and to pave the way for a more permanent ceasefire.”

Settle matter militarily

But Abdel Fattah al-Burhan, the leader of the Sudanese Sovereign Council, as the military junta is known, had vowed to settle the matter militarily, indicating a vicious battle ahead.

As the Sudanese count their losses, the region is already reeling from the impact of the one-week clashes.

Analysts say Khartoum’s economic importance to the region has already been felt and more losses, for Sudan itself and its neighbours, will be recorded in the near future.

The security and stability of Sudan is important for business, lying between Suez Canal and Bab el Mandeb, it also borders North Africa, the Sahel and Central Africa.

A busy shipping lane in the Red Sea and Port Sudan’s play a huge role as a corridor for trade for countries like Chad and South Sudan.

“Sudan also plays a key role in preventing infiltration of terror merchants, or illegal weapons, who may be hiding in troubled Libya. It connects important transportation routes for aviation, oil and other stuff. It needs to be in stable hands to sustain this flow,” said Dr Claire Amuhaya, a lecturer at Rudn University in Moscow, and adjunct lecturer at Riara University in Nairobi.

As armed forces and the RSF squared it out in residential areas in Khartoum, catching civilians in the crossfire, leaders in the region called for de-escalation. And their worry was that the war would be a new economic burden to their efforts to rise from recent global crises.

Silence the guns

“It is time to silence the guns in our region and continent so that we can focus on the urgent work of enabling our people to pursue opportunities and actualise their aspirations, in peace and tranquillity,” Kenya’s President William Ruto said on April 19, warning the conflict had already reached atrocious levels. “Time is of the essence.”

Uganda’s Yoweri Museveni said: “We cannot keep papering over mistakes of unprincipled politics year after year.”

He said the fighting was derailing Sudan’s aspirations.

For Sudan, it is not just the port of business with the outside world that matters. Its airspace is among the largest aviation territories on the continent, making it a useful route when going to or from Europe. Airlines like Kenya Airways, Egypt Air, Ethiopian Airlines, Air Mauritius, Air France, British Airways, KLM and Emirates use this airspace as a shorter route to eastern Africa. This week, these airlines avoided the violence areas, taking on longer routes. Kenya Airways, Emirates, Saudia and Ethiopian, who have regular flights, also suspended scheduled departures and arrivals.

“The ongoing unrest has forced Kenya Airways to suspend its flights to and from Khartoum, a further blow to the loss-making airline. The violence could also have a spill-over effect on Kenyan businesses operating in South Sudan, given that the country exports its oil via Port Sudan,” said Dr Peter Mwencha, a senior regional adviser at CUTS International.

Navigation services suspended

On April 16, Sudan’s Civil Aviation Authority notified that all air navigation services had been suspended in Sudan’s airspace, including above FL245 in adjacent South Sudan, due to “security reasons.”

That confirmed Eurocontrol’s initial notification, extending it into neighbouring South Sudan, where the HSSS/Khartoum FIR is responsible for managing their traffic above FL245. There is now no air navigation service available in that airspace.

“The fighting threatens to destabilise not just Sudan but much of the region. The crisis has a regional bend since the repercussions from the conflict could compromise regional security, peace and stability, thus undermining economic, political and security interests,” said Davis Nyagah, an Immigration Law consultant.

The deployment of lethal weapons and airpower by both RSF and SAF at military and non-military sites — which is illegal — has caused devastating damage to property as well as strategic public infrastructure, including roads, bridges, and airports. That is both a local and international economic loss.

Civilian planes damaged

“Several civilian planes have been reportedly damaged. This essentially hampers the movement of persons and goods and diverts international trade and capital flows while disrupting regional supply chains,” Mr Nyagah said.

“War-related airspace closures force international flights onto longer routes, resulting in longer travel times, higher fuel costs and added carbon dioxide emissions. All these adversely impact trade, aviation, and the normal flow of business in the region.”

Putting faces to the pain

Dr Peter Mwencha, a senior regional adviser at CUTS International, a trade and development think tank, says Kenya’s tea, a popular export to Sudan, may take a hit due to the crisis.

In 2021, when the two countries resolved their tariff disputes, Kenya sold $65 million worth of tea to Sudan, making it the biggest buyer on the continent, after Egypt. It bought 1.9 million kilos of Kenyan tea that year.

The Kenya Association of Manufacturers said it was assessing, from members’ reports, the impact of the war on business. Going by the trends in the past, any sort of violence or uncertainty, has always hurt exports.

Disrupting supply chains

In Uganda, Stephen Asiimwe, executive director of the Private Sector Foundation Uganda, told The East African that whereas it was too early to establish the impact of the war on trade, there are fears that it will greatly affect volumes of Kampala’s key exports to Khartoum.

“Sudan is one of the biggest importers of our coffee and we should be worried,” he said. “Whereas we do not know yet the impact of this war on our trade so far, we know war certainly affects trade disrupting supply chains and we urge the international community to ensure that this war doesn’t escalate.”

Khartoum is the second-largest importer of Ugandan coffee after the European Union. Kampala also exports large volumes of tea and foodstuff to Sudan.

Uganda’s Ministry of Trade said on Thursday that the government was considering alternative markets around the region in the short term for key goods that Khartoum buys from Kampala, with coffee and tea most considered, although they were not specific on what the alternatives were.

Sudan’s Badr Airlines

Earlier this year, Sudan’s largest carrier Badr Airlines launched two weekly flights to Entebbe in an indication of spreading its wings to the East African market. The airline joined others on this route like Air Arabia, Egypt Air, Ethiopian Airlines and Etihad.

With the war, the Badr Airline flights to Entebbe are suspended, thwarting movement of people and goods between the two countries.

In 2020, Uganda exported $89.9 million worth of coffee to Sudan, according to the Bank of Uganda. Uganda mainly exports Coffee, tea, spices, vehicles, animals, vegetable fats, and other agricultural produce to Sudan. But the volume of coffee has been rising consistently since 2018, when it sold $52.54 million worth of raw coffee to Khartoum. Figures from the past two years may be slightly lower, but Khartoum remains a key market.

Uganda, meanwhile, said it was working with other regional and international partners to have the leaders re-commit to the principles of the transitional process as the only way that will lead to national reconciliation and peace, according to a statement tabled in parliament on Tuesday.

Ready for rescue mission

Ratib Bayiga, leader of an association of those working in Sudan, says they are ready for any rescue mission, a cost that Uganda is likely to face.

“The embassy told us to be ready. We are just waiting,” he said, adding that communication is through the internet, which is not even stable.

The economic toll for the Sudanese is humongous, added to the high level of inflation. This week, as markets closed, the prices of food went through the roof.

A day before the war on Friday last week, a kilo of tomatoes sold at $0.40. It was selling at a $1 by Friday. Women were forced to draw water from the River Nile, as the electricity to pump clean water to homes had been cut.

Collateral damage

Khartoum residents joked that the fighting had, at least, chased petty thieves and muggers off the streets. But so was every civilian.

That is Sudan’s loading humanitarian crisis. The Shahida Salama Centre for Dialysis, one of the 40 health facilities knocked down in the war, saw its patients flee with urine bags.

Kate Maina-Vorley, CARE International regional director for East and Central Africa, said the humanitarian toll was already bleak, with more than 15 million Sudanese in need of humanitarian assistance, while 11 million people could barely meet their basic food needs.

“This translates into one in every three Sudanese needing assistance, while one in four was hungry. Close to four million children under age five, as well as pregnant and lactating women, were acutely malnourished,” she told The EastAfrican.

“There are major concerns around a failing health system, which has dire implications for the thousands injured in the current conflict. The live conflict situation severely impacts women and children. Children still need to be born, and new-borns fed, and it is devastating to hear of hospitals being evacuated with babies in incubators left inside.”

Sexual violence

Past political crises, including two coups in the past four years and a crackdown on civilian protesters, had seen the worst levels of humanitarian toll, including sexual violence against women.

The United Nations sexual and reproductive health agency, UNFPA, estimates 219,000 pregnant women in Khartoum, 24,000 of whom are expected to give birth in the coming weeks. The clashes have made it extremely difficult for women to seek essential antenatal care, safe delivery services, or postnatal care.

“The current insecurity is making the delivery of humanitarian aid almost impossible and comes at the worst time for the people of Sudan as the country faces unprecedented needs,” UNFPA stated.

Before last week, at least 3.7 million people were internally displaced by drought, floods and conflict. Humanitarian agencies said the earlier appeal for funds worth $1.75 billion had only achieved 13.5 percent of the target.

“The longer the conflict continues, the worse the humanitarian situation will get. This is why we continue to call for an end to the fighting and ask all actors to remember their obligations to International humanitarian law, which requires them to ensure that all civilians and humanitarian actors are protected,” Ms Maina-Vorley told The EastAfrican.

“CARE calls for the safety, protection, and unimpeded access of humanitarian workers to enable them to continue lifesaving work in the communities they operate in. We will continue to provide much-needed services to the communities we serve as long as this is safe for the communities we work in and our dedicated staff members.”

This cost on businesses, and on people’s welfare will get bigger.

There is already a looming humanitarian crisis with movement of humanitarian aid workers having been suspended in South and West Kordofan states.

“The killing of UN agency national staff in Kebkabiya in North Darfur and the looting of UN agency vehicles is a clear indication that the threat is real.”

By Aggrey Mutambo, Mawahib Abdallatif and Jonathan Kamoga