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.