The worsening situation has been caused by a drop in oil revenues.

All has not been well in Sudan in the last year. Growing tension over rising cost of living, soaring food prices and recent government austerity measures have only made the situation worse. This has led to violent street demonstrations that have been gradually spreading across the country.
Beginning with university students, other professional groups have since joined in the protests, calling for the fall of the government. In order to contain the situation, security services’ control of newspapers has been tightened. All articles are now checked by security agents before they are sent for printing. As a result, all news on the popular protests has been muted, due to the strict censorship.
Sudan is currently facing a budget deficit of FCFA 1,252 billion following the loss of 75 per cent of its oil production – the lifeblood of the economy – after South Sudan gained independence in July last year. In response, the National Congress Party, NCP-dominated government has moved fast to implement a tough set of austerity measures.
The decisions are concerned with reviewing the budget and State structure, legislators’ allocations and suspending the construction of new government buildings. Constitutional positions in both executive and legislative bodies will be curtailed by 45 per cent and 56 per cent respectively, including the scrapping of over 280 government posts. There is also a 30 per cent cut (worth FCFA 1,042 billion) in fuel subsidies.
Finance Minister, Ali Mahmud al-Rasul, admitted during a speech in Parliament last week that the measures were those of a ‘bankrupt state!’ Safwat Fanous, professor of politics at the University of Khartoum, argues that the financial problems facing the government stem from its dependency on oil revenues over the last 10 years and its failure to diversify the economy.
In furtherance of the austerity measures, President Omar Al-Bashir on Monday June 25, 2012 issued a decree relieving nine of his advisers of their positions. In a May 2012 report, the International Monetary Fund described the economic challenges facing Sudan as ‘daunting.’ Inflation officially hit 30.4 percent in May, compared to 28.6 per cent in April, the Central Statistics Bureau said last week. Some economists say the real figure could be over 40 per cent.
Apart from US trade sanctions, Sudan has been at war in the past two decades with the huge financial cost contributing in impoverishing the country. The armed conflicts include rebellions in South Kordofan, Blue Nile, Darfur, recurrent skirmishes with Chad and the war with South Sudan that eventually led to the latter’s independence in 2011. Recent fighting with independent South Sudanese forces in the disputed border town of Heglig resulted in extensive damage to its oil infrastructure.

Chronology Of Major Events

2002 - Government and SPLA sign the landmark Machakos Protocol providing for the south to seek self-determination after six years.
2003 October - PNC leader Turabi released after nearly three years in detention and ban on his party is lifted.
2004 March - UN official says pro-government Arab Janjaweed militias are carrying out systematic killings of non-Arab villagers in Darfur.
2005 January - Government and southern rebels sign a peace deal.
2005 9 July - Former southern rebel leader John Garang is sworn in as First Vice President. A constitution which gives a large degree of autonomy to the south is signed.
2005 1 August - Vice President and former rebel leader, John Garang is killed in a plane crash. He is succeeded by Salva Kiir. Garang's death sparks deadly clashes in the capital between southern Sudanese and northern Arabs.
2005 October - Autonomous government is formed in the south in line with the January 2005 peace deal.
2007 July - UN Security Council approves a resolution authorising a 26,000-strong force for Darfur.
2008 March - Presidents of Sudan and Chad sign accord aimed at halting five years of hostilities between their countries.
2008 June - President al-Bashir and southern leader Salva Kiir agree to seek international arbitration to resolve dispute over Abyei.
2009 March - The International Criminal Court in The Hague issues an arrest warrant for President Bashir on charges of war crimes and crimes against humanity in Darfur.
2009 December - Leaders of North and South reach deal on terms of referendum on independence due in South by 2011.
2010 April - President Bashir gains new term in first contested presidential polls since 1986.
2010 July - International Criminal Court issues second arrest warrant for President al-Bashir - this time on charges of genocide.
2011 January - People of the South vote in favour of full independence from the north.
2011 May - Northern troops overrun town of Abyei on disputed border between north and south.
2011 July - South Sudan gains independence.
2011 December - International Criminal Court's chief prosecutor requests arrest warrant for Sudan's Defence Minister, Abdelrahim Mohamed Hussein, for alleged war crimes in Darfur.
2012 January - South Sudan halts oil production after talks on fees for the export of oil via Sudan break down.
2012 February-April - Sudan and South Sudan sign non-aggression pact at talks on outstanding secession issues, but border fighting breaks out.
2012 May - Sudan pledges to pull its troops out of the border region of Abyei, which is also claimed by South Sudan, as bilateral peace talks resume.
2012 June - Week-long protests in Khartoum at austerity measures spread from students to general public and turn into clashes with police. Government had cut fuel and other subsidies because of the drop in oil revenues after the independence of South Sudan.
Source: BBC