Inflation’s Impact on Sudan Exports 1990-2020: An ARDL Approach

Purpose: This study investigates the inflation-export nexus in Sudan over the period 1990- 2020. Design/methodology: The study is based on quantitative and qualitative methods, estimating the export function and measuring the impact of its determinants over a prolonged period of time; the Autoregressive Distributed Lag (ARDL) methodology was used to analyse the co-integration. Findings: Findings have undoubtedly shown inflation’s negative impact on exports over the period 1990-2020. Broadly speaking, the long-term results indicated that the most important variable affecting exports is the gross domestic product (GDP), followed by inflation. Interestingly, the results indicated that the exchange rate was not significant, neither in the short nor in the long term. Implications: The study recommends inflation's control policy as a perquisite for an export development strategy; this overcomes barriers and paves the road for shifting Sudan's economy to productive agendas. Therefore, targeting inflation will contribute to export diversification and strengthening the product's value chain. The research findings reconsider the weight of export’s determinants and will reposition focusing to inflation control rather than exchange rate policy. Originality/value: The paper introduces a new approach in modelling the inflation-export nexus: (1) elaborate on export's determinants and their weights; and (2) recommending guidelines to adapt inflation policy with export development strategy.