Sudanese livestock traders hit by hefty customs duties

Livestock exporters have sharply criticised the Sudanese Ministry of Finance and customs authorities for imposing customs duties on livestock exports, exceeding 10 per cent of the export value. Economists anticipate that this decision will lead to a further decline in the country’s foreign currency revenues.

Abdallah Bereik, a livestock exporter, expressed his surprise at the “sudden decision” of the finance ministry last week to impose customs duties, amounting to SDG33 million per 100 tons, on livestock exports, and the authorities’ requirement that the amount be paid before the departure of the shipment.

“This decision would inflate the value of livestock exports and reduce competition”, the livestock trader told Radio Dabanga yesterday, citing increased transport costs from western Sudan to the checkpoints in Kassala and Suakin due to the war.

Livestock exports to Saudi Arabia average between 10,000 to 15,000 heads daily, with more than four million heads exported to the kingdom since the onset of war last April. “These exports constitute the only regular income stream for the state’s treasury”, Bereik told Dabanga.

In January, Egyptian Minister of Supply and Internal Trade Ali El Moselhi noted a decline in meat imports from Sudan compared to the previous year, attributing this decline to the war, and resulting agreements with Djibouti and Somalia to import meat through the port of Safaga.

Undersecretary of the Federal Ministry of Animal Resources Hasan El Tom said recently that despite the ongoing war, livestock exports reached approximately five million heads in 2023, “a figure unprecedented in the past five years”. Sheep exports alone accounted for nearly 4.5 million heads, while camels, cows, and goats totalled 600,000 heads, according to El Tom.

Sudden decision

The sudden announcement of extra fees without prior notification contradicts a previous exemption of livestock exports from customs duties.

“This only adds to pre-existing additional fees related to quarry management and veterinary procedures, as well as increased charges from the Chinese company contracted at the port of Haidob, which raises fees from SGD1,000 to SDG3,500 per head on livestock exports,” he lamented.

Sudanese economics professor Hasan Bashir criticised the authorities’ imposition of livestock export fees exceeding 10 per cent of their value.

“Such high fees reduce export competitiveness, as they are ultimately passed on to foreign consumers”, he argued, describing the price hike as an “undesirable outcome” that will lead to decreased export revenues in foreign currencies for the state treasury.

Bashir further characterised the decision as “indicative of the deep and catastrophic crisis afflicting the Sudanese economy” due to the ongoing war.

“This crisis has left the Ministry of Finance with limited options to generate revenue to finance the costly war efforts.” He expects a negative impact on livestock exports, particularly considering that livestock is one of the primary exports contributing to the de facto government treasury.

Exchange rates

“Sudan is suffering from a contraction in the economy and a decrease in exports, which leads to a lack of sources of foreign currency,” he told Dabanga yesterday.

The economist views the escalating rise in exchange rates as “a natural consequence, predicting that the value of the Sudanese Pound would continue to decline to unprecedented levels, “akin to the situation with the Lebanese Pound”.

He attributed the decline to the scarcity of US Dollars and other foreign currency reserves in the Central Bank of Sudan. “This scarcity has forced reliance on the parallel market for foreign currencies, exacerbating the devaluation of the Sudanese Pound.”

The exchange rate of the US Dollar against the Sudanese Pound surged to unprecedented levels in banks and the parallel market, reaching SDG1,154 at the Faisal Islamic Bank. Foreign exchange dealers told Dabanga yesterday that the exchange rate in the parallel market exceeds SDG1,450.

The economics professor anticipated that this increase will lead to further inflation, higher production costs, and a rise in the cost of living. “Import-dependent goods, particularly food and medicines, will experience further price hikes, pushing even more people into poverty”.

On Wednesday, the World Food Programme (WFP) warned that the vast majority of Sudanese face severe hunger, with more than 95 per cent of people unable to have one adequate meal per day. 18 million people across Sudan face severe food insecurity, according to the UN.