The Sudan Conflict May Cost Uganda 1.5 Billion Dollars, a Leeway to Economic Loss

Ridelink Series

Written by Druscilla Nakanwagi on April 26, 2023

The Current State of the War in Sudan

The conflict in Sudan has been ongoing for decades. Still, the most recent escalation began in 2019 after a popular uprising led to the overthrow of long-time dictator Omar al-Bashir. Since then, the country has been in political and economic turmoil, with the military taking control of the government and opposition groups resisting the coup. In addition, violence, human rights abuses, and a deteriorating humanitarian crisis have characterized the situation.

One of the most significant impacts of the war has been on Sudan's infrastructure. The conflict has disrupted transportation routes and damaged roads, bridges, and other critical infrastructure. This disruption has affected the country's ability to move goods and services, including those destined for neighbouring countries like Uganda.

How the War in Sudan May Affect Uganda's Logistics Sector

Uganda is heavily reliant on imports from neighbouring countries, including Sudan. However, the conflict in Sudan has the potential to disrupt this trade, particularly if transportation routes are disrupted or if tariffs are increased. In addition, the lack of access to goods and services could lead to price increases and shortages, particularly for essential items like food and medicine.

The war in Sudan may also impact Uganda's exports. Uganda exports various goods, including agricultural products like coffee, tea, and cocoa. However, if the conflict disrupts transportation routes or makes it more challenging to do business with Sudan, Uganda's ability to export these goods could be hampered.

High insurance costs can impede the movement of goods across the Sudan border. This increase is mainly attributed to the high risk of transporting goods during conflicts, which can result in significant financial losses. In addition, Uganda heavily relies on commercial vehicles to transport goods across Sudan, which are more vulnerable to accidents and disruptions by warfighters due to their size and weight.

 

Also, the safety of the transporters is at risk, they could lose their lives during crossfires, and very few or none are willing to take the risk. This halts goods transit and hence costs Uganda taxes and other benefits of cross-border trading.