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Lebanon Reels After Efforts to Form Government Collapse

"My country did this", reads graffiti daubed on walls near the site of a colossal August 4 blast in Beirut that killed 190 people and ravaged large parts of the Lebanese capital | AFP
"My country did this", reads graffiti daubed on walls near the site of a colossal August 4 blast in Beirut that killed 190 people and ravaged large parts of the Lebanese capital | AFP
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Lebanon Reels After Efforts to Form Government Collapse

"My country did this", reads graffiti daubed on walls near the site of a colossal August 4 blast in Beirut that killed 190 people and ravaged large parts of the Lebanese capital | AFP
"My country did this", reads graffiti daubed on walls near the site of a colossal August 4 blast in Beirut that killed 190 people and ravaged large parts of the Lebanese capital | AFP

Lebanon was left reeling Sunday without the slightest prospect of ending multiple crises, after its premier-designate stepped down following the failure of talks to form a government, despite international pressure.

Mustapha Adib's resignation on Saturday ended efforts to hammer out a reformist government in the wake of a colossal August 4 explosion in Beirut that killed 190 people, injured thousands, and ravaged large parts of the capital.

Political parties had pledged in early September, during a visit to Lebanon by French President Emmanuel Macron, to form within two weeks a cabinet of independent ministers tasked with ending the country's economic malaise.

"As the efforts to form a government reached their final phase, it became apparent to me that this consensus... was no longer there," Adib said on Saturday.

Under the Lebanese constitution, the president must now hold further talks to nominate another prime minister to form a government, but it is a process that risks dragging out and even failing.

"I don't expect a government anytime soon," said Sami Atallah, who heads the Lebanese Center for Policy Studies.

"There was a chance, there was a lot of pressure to form a government and it didn't happen," he said, adding there was a "bigger problem" of geopolitical tensions, especially between the United States and Iran.

Adib's efforts were hampered by the claims of two Shiite formations, the Iran-backed Hezbollah movement, and its ally Amal, led by parliament speaker Nabih Berri, who demanded the finance portfolio.

According to observers, the Shiite allies dug in their heels after recent US sanctions imposed on a minister of the Amal party and two companies affiliated with Hezbollah.

- 'Into the unknown' -

Adib's decision to step aside 26 days after his appointment has left the people of Lebanon feeling as though they are back to square one.

Earlier this week, Lebanese President Michel Aoun warned the country was headed to "hell" unless all political parties stepped up and facilitated the formation of a government.

Even before the devastating Beirut port blast, the country was already mired in its worst economic crisis in decades and mass protests that toppled and replaced the government.

Following the August 4 blast, the country's worst peacetime disaster, the government stepped down and Adib was appointed to form a new one.

Many are worried the country is headed from bad to worse.

The UN envoy to Lebanon, Jan Kubis, on Saturday reacted with disbelief: "Such a degree of irresponsibility, when the fate of Lebanon and its people is at stake!"

"Politicians, have you really scuppered this unique chance created by France?"

Analyst Karim Bitar said Lebanon was expected to have a rough patch ahead.

"Even if Lebanon is not hell-bound, we will probably witness... the weakening of public institutions, a worsening of the economic crisis... and a wave of emigration," he said.

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Sudan Banknote Switch Causes Cash Crunch

A Sudanese man pushes a cart with water containers in Omdurman, the Sudanese capital's twin city, during battles between the Sudanese military forces and Rapid Support Forces (RSF), on January 17, 2025. (Photo by AFP)
A Sudanese man pushes a cart with water containers in Omdurman, the Sudanese capital's twin city, during battles between the Sudanese military forces and Rapid Support Forces (RSF), on January 17, 2025. (Photo by AFP)
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Sudan Banknote Switch Causes Cash Crunch

A Sudanese man pushes a cart with water containers in Omdurman, the Sudanese capital's twin city, during battles between the Sudanese military forces and Rapid Support Forces (RSF), on January 17, 2025. (Photo by AFP)
A Sudanese man pushes a cart with water containers in Omdurman, the Sudanese capital's twin city, during battles between the Sudanese military forces and Rapid Support Forces (RSF), on January 17, 2025. (Photo by AFP)

Sudan's army-aligned government has issued new banknotes in areas it controls, causing long queues at banks, disrupting trade and entrenching division.

In a country already grappling with war and famine, the swap replaced 500 and 1,000 Sudanese pound banknotes (worth around $0.25 and $0.50 respectively) with new ones in seven states.

The government justified the move as necessary to "protect the national economy and combat criminal counterfeiters,” AFP reported.

But for many Sudanese it just caused problems.

In Port Sudan, now the de facto capital, frustration boiled over as banks failed to provide enough new notes.

One 37-year-old woman spent days unsuccessfully trying to get the new money.

"I've been going to the bank four or five times a week to get the new currency. But there is none," she told AFP, requesting anonymity for fear of reprisals.

Grocers, rickshaw drivers, petrol stations and small shop owners are refusing to accept the old currency, preventing many transactions in a country reliant on cash.

"We cannot buy small things from street vendors any more or transport around the city because they refuse the old currency," the woman said.

The currency shift comes 21 months into a war that has devastated the northeast African country's economy and infrastructure, caused famine in some areas, uprooted millions of people and seen the Sudanese pound plunge.

From 500 pounds to the US dollar in April 2023, it now oscillates between 2,000 and 2,500.

Finance Minister Gibril Ibrahim defended the switch, saying it aims to "move money into the banking system, ensure the monetary mass enters formal channels as well as prevent counterfeiting and looted funds.”

But analysts say it is less about economics and more about gaining the upper hand in the war between army chief Abdel Fattah al-Burhan and his former deputy Mohamed Hamdan Daglo, who leads the Rapid Support Forces (RSF).

"The army is trying to weaken the RSF by having a more dominant currency," Matthew Sterling Benson at the London School of Economics and Political Science told AFP.

After the RSF looted banks, the army "wants to control the flow of money" and deprive them of resources, he said.

Kholood Khair, founder of think tank Confluence Advisory, believes that this financial squeeze may accelerate RSF plans to establish a rival currency and administration.

"The move has catalyzed the already existing trajectory towards a split," she told AFP.

Sudan is already fragmented: the army holds the north and east and the RSF dominates in the western Darfur region and parts of the south and center.

Greater Khartoum is carved up between them.

For Sudan's population, the move has only compounded their suffering.

Activist Nazik Kabalo, who has coordinated aid in several areas, said supply chains have been severely disrupted.

Farmers, traders and food suppliers rely entirely on cash.

"And if you do not have cash, you cannot buy supplies, needed for aid or for anything else," Kabalo told AFP.

The government has promoted digital banking apps such as Bankak, but many Sudanese cannot access them because of widespread telecommunications outages.