Despite some increases in the GDP during the second half of the 1990s, Sudan remains one of the poorest and unequal in terms of services of all African countries. The paper attempts to find explanations to this remarkable increase in poverty during the 1990s. Using a mix of aggregate national and regional statistics and reports together with some secondary material, the paper advances the following arguments: that misallocation of resources away from the productive sectors of the economy to non-productive spending (war, security machine and an enlarged bureaucracy) stunted the economy and limited employment opportunities; that government heavy extraction from agriculture combined with deficit financing resulted in inflation,; eroding both urban and rural real incomes, impoverished formerly non-poor families and pushed the already poor into more severe poverty conditions. Government policy towards agriculture, exacerbated by drought and conflict, has led to the erosion of agriculture, the destruction of rural livelihoods and displacement and led to a massive influx of an impoverished population into cities. Related to this is the decline of the industrial sector, which is also a consequence of government policy and which led to increased unemployment further pushing urban poverty and urban decline; And finally, that with the increase in poverty, government policy of allocating economic and political resources as favors to allies and political clients sharpened inequalities, and aggravated economic and social polarization. The paper concludes that for any poverty reduction strategy to succeed, political and economic overhaul is necessary.
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