Ahmed Bin Omar-researcher and economic analyst
After two and a half years of a devastating war that exhausted the economy and put it on the brink of collapse, Sudan today stands at a fateful crossroads, as the conflict threatens the foundations and survival of the state. The conflict has caused the displacement of more than fourteen million people, the collapse of vital sectors such as health and education, while more than half of the population is at risk of food insecurity.
In light of this economic catastrophe, Sudan has effectively turned into a war economy; most productive sectors have stopped, and the state`s resources – which are supposed to be directed to development – have become depleted in feeding the conflict machine, exacerbating economic collapse and social suffering. With no end in sight to the fighting, the economic bleeding continues unabated, with each month of the war adding more destruction and raising the future cost of reconstruction.
Faced with this grim reality, an existential question arises: can Sudan, in light of a debilitated economy and a prolonged war, preserve the state`s foundations and find a path to recovery and stability Or will the wheel of conflict continue to undermine the economic and institutional foundations and push the country towards the fate of a failed state
1-the performance of the economy during the war: record deflation and unprecedented displacement
Sudan`s GDP shrank by more than 29% during 2023, with double-digit contraction expected to continue in 2024. Estimates show that if the conflict drags on until the end of 2025, the size of the economy may shrink by more than 40% compared to its pre-war level, meaning that Sudan will produce less than 60% of what it previously produced.
The minister of Finance in late 2023 estimated direct economic losses at more than 26 billion dollars, which exceeds half the size of the pre-war economy. These figures mean the destruction of the country`s productive capacities and the fading of the gains of years of economic growth.
No major sector was spared from the effects of the war; industrial production collapsed and lost more than half of its value due to the shutdown of factories – especially in Khartoum – and the Geely refinery suffered serious damage worth about three billion dollars. Oil production also fell to less than half, from about 60 thousand barrels per day before the war to only 24 thousand, while refining operations stopped completely.
The agricultural sector – the mainstay of the national economy and a source of livelihood for about 40% of the workforce – has been hit hard by the displacement of farmers, disrupted seasons and shortages of fuel and seeds. The food and Agriculture Organization (FAO) estimates that grain production in the 2023-2024 season decreased by about 46% compared to the previous year. Major agricultural projects such as the Al-Jazeera project have also been disrupted as a result of fighting and militia attacks, and fertile areas that were described as the"food basket of Sudan" have turned into destroyed military arenas.
Poverty and inflation rates have increased dramatically; the proportion of the population below the poverty line has doubled from about 33% before the war to more than 60% in 2024, while inflation has gotten out of control, registering an annual rate of about 170% compared to 66% in 2023.
The exchange rate of the Sudanese Pound also fell from about 600 pounds to the dollar before the war to about 3,500 pounds at the end of the third quarter of 2025. In parallel, government revenues collapsed from 10% of GDP in 2022 to less than 5% in 2024, leaving the state treasury almost unable to finance basic services or pay employees ` salaries.
The contraction of Sudan`s GDP due to the WAR (values in Billion US dollars). The graph shows the decline in output from about 56 billion dollars in 2022 to about 32 billion dollars expected in 2025 as a result of the ongoing conflict.
2-the resilience of official institutions in the face of the storm
Despite the enormity of the economic shock and the security chaos, official economic institutions tried to maintain a measure of continuity and resilience in the face of the storm. After the capital Khartoum turned into an open battlefield, the Central Bank of Sudan and the Ministry of Finance were moved to safer locations in Port Sudan in the East – although the central bank later reopened its window in Omdurman – and continued to perform some vital tasks from there.
The banking sector suffered a severe blow, as about 70% of bank branches in the combat zones were closed, and many of them were looted, but some branches continued to provide minimal services in government-controlled areas, such as salary payments and money transfers to citizens.
During the war, the central bank adopted a series of extraordinary monetary measures in an attempt to regain financial control. At the end of 2024, a new currency was introduced to replace the old pounds in order to combat counterfeiting and collect the huge cash circulating outside the banking system. Despite the opposition of the Rapid Support forces to this step and their threat to prevent currency circulation in the areas under their control, the central bank went ahead with the operation inside the seven safe States, while the areas controlled by the militia remained outside.
This step reflected the determination of the official authorities to maintain basic economic management tools despite the political and military split. It also demonstrated the efficiency of the cadres of the central bank and the Ministry of Finance and their innovation of emergency solutions to avoid a comprehensive financial chaos. However, the impact of these institutions remained limited by the narrow geographical scope of power and weak resources, which made monetary and fiscal policy tools less effective.
The war has clearly demonstrated that even the most powerful economic institutions become powerless without political and security stability. Therefore, its partial steadfastness – despite its symbolic importance-remains only a glimmer of hope that does not dispense with the urgent need to stop the war and restore a unified state that enables its institutions to play their full role in rebuilding the national economy.
3-the war economy of the militia: smuggling resources and imposing royalties
In turn, the RSF created a parallel war economy that enabled it to finance its operations away from official state institutions. The militia exploited Sudan`s resources and Border gaps through organized smuggling networks that included gold, commodities and fuel, and imposed royalties on trade routes, in a scene reminiscent of the experiences of war-torn countries such as Libya and Yemen, where parallel financing systems have emerged that feed the parties to the conflict.
Gold was the most prominent source of funding for the militia; the commander of the Rapid Support Forces, Mohammed Hamdan Daglo (hemedti), and his relatives run large gold mines in Darfur, Mount Amer, and others, and the militia has intensified since the outbreak of the war the sale of gold and smuggling to obtain foreign exchange and buy weapons. UN investigations indicate that the UAE has become a major outlet for smuggled militia gold, which contributed to fueling the Sudanese war economy.
Besides gold, the militia relied on smuggling fuel and goods and extorting merchants via so-called "war taxes". The Rapid Support forces have taken control of large areas of Darfur and border crossings with Chad, Libya and Central Africa, and have established networks for the introduction of weapons and fuel from neighboring countries away from the eyes of the state. Merchants in these areas pay exorbitant royalties at military checkpoints in exchange for allowing goods to pass through, creating a shadow economy governed by the barrel of a gun rather than the law.
The RSF also resorted to the use of siege and starvation as a military tactic. In May 2024, it imposed a suffocating siege on the city of El Fasher – the capital of North Darfur – for more than a year, cutting off food and medical supplies to it. This led to severe food and medicine shortages and insane price hikes, and dozens of deaths from starvation were documented during the first weeks of the siege. This brutal approach of targeting civilians by starvation is reminiscent of the worst chapters of the wars in Yemen and Syria, where sieges were used as a weapon to subdue resisting cities.
The United Nations has described the current Sudanese crisis as one of the worst humanitarian disasters in the world, warning that about 30 million Sudanese need urgent assistance.
The militia also sought to undermine the government`s control over the monetary system. Just before the introduction of the new currency in 2024, it flooded the market with fake banknotes to finance its activities. When the central bank announced the issuance of the new pound, it refused to recognize it and banned its circulation in its regions, trying to create a parallel monetary system similar to what the Houthis did in Sana`a.
This situation created a real danger of a financial split within the country with two parallel monetary and currency policies, a scenario witnessed by Yemen and caused a double economic collapse. Although the militia lacks the technical expertise and international recognition necessary to issue an official currency, the mere emergence of such a financial split weakens confidence in the national economy and complicates any future consolidation of the banking system.
In a subsequent development, the Rapid Support Forces announced in July 2025 the formation of what it called a "government of peace and unity" as a parallel authority in Darfur and South Kordofan. Despite its lack of any legal or political legitimacy, the move represents an attempt to establish an independent administration with parallel institutions, leading to talk about the establishment of a regional central bank in Darfur.
Although this project is not realistically feasible, it reveals the intention of the militia to continue dividing state institutions and to establish the fait accompli imposed by force of arms.
In general, the war economy built by the RSF guarantees short-term sources of funding, but at the same time it exacerbates the national collapse, prolongs the war and the suffering of civilians, and perpetuates a structural split in Sudan that may persist even after the cessation of hostilities.
4-temporary "reboot" versus real reconstruction
As the war enters its third year, local initiatives have emerged in some relatively safe areas to restart minimum basic services, in an attempt to alleviate the humanitarian catastrophe without waiting for the end of the war. For example, after the army recaptured parts of Khartoum in early 2025, the government formed a high Committee to redevelop the capital.
Maintenance teams began urgent repair of electricity and water networks and operating them for limited hours in some neighborhoods to restore basic services and encourage the gradual return of residents. Mobile generators and water tanks were used as emergency solutions to keep field hospitals and critical facilities operating at a minimum. These efforts have partially revived utilities, but they remain temporary solutions based on fuel and solar pumps rather than a sustainable reconstruction of infrastructure.
On the other hand, Sudan has lost about 37% of its electricity capacity due to Rapid Support attacks on stations and transmission lines. To compensate for the lack of generation, the authorities used the electrical connection with Egypt, where in May 2025 Cairo raised the supply of electricity on an emergency basis to illuminate areas in northern Sudan, especially to support farmers in the summer planting season.
The government has also reopened a limited number of bank branches in cities that were not heavily damaged – such as eastern Sudan, Gezira and Khartoum – from late 2024, to provide liquidity, basic services and revive local commercial traffic. Electronic payment methods have also been activated to facilitate transactions without the need to travel to the capital.
In parallel, the government maintained the operation of seaports in Port Sudan and Suakin to ensure the continued flow of humanitarian supplies and fuel, in order to avoid commercial and humanitarian isolation of the country.
The comprehensive reconstruction process means building up what was destroyed by the war in a sustainable way and restoring the capabilities of the economy in the long term, which requires conditions that are currently unavailable, foremost of which is a permanent ceasefire and an official end to the conflict.
It is not possible to launch major infrastructure projects in light of bombing and insecurity, and it is not possible to implement national plans without a unified and legitimate central government capable of planning, coordinating and attracting international funding.
The reconstruction bill in Sudan is estimated to exceed 100 billion dollars in direct damage, including roads, bridges, electricity, water and telecommunications networks, as well as hundreds of hospitals, schools and service facilities that were completely or partially destroyed. The minister of Health estimated the losses of the health sector alone at about 11 billion dollars until mid-2025. These numbers are likely to rise as the fighting continues.
Based on this, the current "reboot" efforts remain only a first aid that temporarily keeps the stricken cities alive, but they do not represent a sustainable solution. There is no real reconstruction without the establishment of peace and an effective government capable of attracting funding and launching major reconstruction projects. Any limited gains that have been made will remain fragile, and may vanish as soon as there is renewed fighting.
5-post-war reform programs: international lessons and Sudanese priorities
Over the past decades, international institutions have developed specialized programs to help countries emerging from conflict gradually restore their economic stability, most notably the Staff-Monitored Program of the International Monetary Fund (IMF), in addition to the World Bank and the United Nations recovery and reconstruction initiatives.
For Sudan-facing a collapsing economy, limited external support, and a fragile political situation – learning from these experiences is a necessity, not a luxury.
The SMP program is a non-financing arrangement in which the government is committed to implementing a structural reform package under the supervision of IMF experts, without obtaining loans during its term, with the aim of building a reliable reform record that paves the way for subsequent financial support, whether through the fund`s financing programs or within the heavily indebted poor countries (HIPC) initiative.
Sudan has a relatively successful experience with this program after the December 2019 revolution; in 2020-2021, the transitional government began implementing difficult policies such as raising fuel subsidies and unifying the exchange rate. At that time, Sudan succeeded in reaching the "decision point" of the HIPC initiative and received an initial forgiveness of some of its debts in June 2021, but the October 2021 coup and the war stopped those efforts.
However, the SMP methodology remains valid as a roadmap for any post-war transitional government, as it is not possible to restore international confidence or attract funding without a disciplined reform program that is subject to international institutional control.
On the other hand, the World Bank, the African Development Bank and the United Nations have detailed plans for economic recovery after the conflict. In June 2025, the World Bank released a report entitled:
"The economic and social consequences of conflict: charting a path to recovery"
In it, he outlined the features of a rescue plan for the Sudanese economy, stressing that the recovery of the country requires deep structural reforms once the war stops.
The report made key recommendations, the most prominent of which are:
* Resumption of Sudan`s integration into the debt forgiveness initiative (HIPC) immediately after the establishment of peace, to complete the path that has been stalled since 2021.
* Avoid populist policies such as the return to subsidies for fuel, bread and electricity on a comprehensive scale, because of the exhaustion of the budget and the restoration of economic imbalances.
* Maintaining a unified and stable exchange rate as a prerequisite for macroeconomic stability.
* Restructuring government spending by transferring resources from companies and military projects to productive and service sectors such as health, education and agriculture.
The report also pointed out that the Sudanese army has dominated for decades huge companies that consume state resources without transparency or a real contribution to the Treasury, and that this dominance has doubled with the rapid entry of subsidies into the economy. So, the transfer of these resources towards civilian sectors is an essential condition for rebuilding human capital and improving living.
With limited external support, Sudan must realistically prioritize:
Billions of dollars will not suddenly flow after the war to rebuild, so Sudan must accurately and realistically determine its internal priorities, focusing on urgent, least expensive and fastest-impact steps. They can be summarized as follows:
First: achieving monetary stability and curbing inflation
Confidence in the national currency should be restored through a coherent monetary and fiscal policy, including the withdrawal of surplus from the old pounds circulating outside the banking system, and the cessation of financing the budget deficit by printing money. The exchange rate should also be officially unified, the parallel market for the dollar should be abolished, and any external support should be linked to the stability of the currency rate. The activation of currency auctions helps to regulate the flow of foreign exchange and transparently finance foreign trade.
Second: saving the upcoming agricultural season urgently
Agriculture can be the locomotive of economic recovery if it is quickly reactivated, since the majority of the population depends on it. This requires the provision of basic agricultural inputs (fuel, fertilizers, improved seeds) to farmers in safe areas and major projects, in cooperation with international organizations to distribute them and ensure their timely arrival. The success of the agricultural season will immediately improve food security by increasing supply and lowering prices, and create jobs in the countryside.
Third: the gradual restoration of basic services in stable areas.
It is necessary to speed up the repair and operation of water and electricity networks in cities where the fighting has stopped, even through temporary solutions. The provision of basic services reduces health risks (such as epidemics due to the collapse of drainage and water systems), and citizens feel the beginning of a return to life. Banks should also be gradually reopened and secured to inject liquidity and revive commercial traffic, and ease the burden on domestic economic activities to stimulate capital turnover. These quick steps during the first months to stop the war will send a positive signal encouraging the displaced to return and revitalize the local economy.
Fourth: promoting transparency and combating corruption
Corruption is one of the biggest obstacles to development in Sudan. Therefore, any funds allocated for Reconstruction or international assistance will be wasted if strict and independent control mechanisms are not in place. A National Anti-Corruption Commission should be established, financial disclosure laws for officials should be completed, and international transparency initiatives in the mining and resource sector should be joined. All reconstruction and investment contracts should be made public to ensure community control and prevent the leakage of funds to networks of influence and corruption. Establishing good governance from the very beginning will increase the confidence of citizens and donors at the same time.
Fifth: neutralizing the economy from the domination of the military
The economic balance cannot be restored without taking the military enterprise out of commercial activities. Army companies should be integrated into the state system or gradually privatized transparently, in exchange for improving the conditions of the military personnel and modernizing its defense capabilities, ensuring that economic withdrawal is compensated by institutional stability. The shadow economies that arose during the war must also be ended, the rule of law must be imposed on resources and crossings to prevent smuggling and the reintegration of informal activities into the national economy.
Sixth: partnership with the private sector and donors in reconstruction
The local private sector should be encouraged to be a key partner in reconstruction through clear investment and tax incentives. For example, projects to build schools and hospitals can be assigned to Sudanese companies in exchange for tax breaks, which creates jobs and supports the national capital.
As for externally, it would be advisable to call for an international donor conference immediately after peace is established to establish an international fund for the reconstruction of the Sudan under the supervision of a reliable body. Although the expected volume of support will be less than the needs, an international commitment will send a message of confidence that Sudan is not isolated. A debt-for-investment swap mechanism can also be adopted, whereby parts of the debt are forgiven in exchange for financing productive projects inside the country, which reduces the financial burden and directs resources towards development.
Future prospects
The experiences of countries such as Rwanda, Sierra Leone and Angola confirm that recovery after Wars is possible only if there is political will and sound economic management. Sudan already has the real potential to improve:
Huge natural and agricultural resources, young human energies, and a strategic location connecting Africa and the Middle East.
But translating these ingredients into a prosperous reality requires gradual and laborious structural reforms. Some measures may be painful in the short term – such as cutting military spending or liberalizing prices – but they are necessary to build a stable economy. The most important thing is to realistically prioritize and adhere to a clear reform plan under international supervision to ensure transparency and continuity.
Although external financial support will be conditional and limited, Sudan can better invest its own resources if it stops the bleeding of smuggling and corruption, and severs the link between the military and the economy, so that no future aid or resources are swallowed.
In the end, the future of the Sudanese economy remains dependent on how the conflict is resolved and settled.
If peace is achieved and the state regains its unity, a gradual path of economic recovery can be charted based on the restart of local production – primarily agriculture – supported by structural reforms and partnership with the international community.
Despite the darkness of the current reality, Sudan has a real opportunity to move from a war economy to a recovery economy, if there is the will to dry up the sources of corruption, end the military`s encroachment on the economy, and restore the state`s sovereignty over its resources.
The most important recommendation of this report is the immediate start of technical preparation for the post-war phase, even before the cessation of hostilities, through data collection and the development of detailed plans for repair and reconstruction. With proactive planning and sustained action, the Sudan can overcome its historical plight and gradually recover economically, as many nations have done that have risen from the ashes of war and built a more sustainable and just future.
Future prospects
The future of the Sudanese economy depends on the resolution of the conflict and how to resolve it. Ending the war and reaching a comprehensive peace is the first condition for stopping the economic bleeding; without it, recovery plans will remain only theoretical hopes. If peace comes and the state regains its unity, a gradual path of economic development can be charted based on the restart of local production, primarily agriculture, supported by structural reforms and partnership with the international community.
The most important recommendation to which this report concludes is to start immediately — even before the weapon is silenced — the technical preparation for the post-war stage. Data must be collected and detailed plans for rehabilitation and reconstruction drawn up from now on, to ensure a rapid transition from relief to development as soon as the opportunity for Peace presents itself. With this proactive planning and hard work, Sudan can overcome its historical plight and gradually restore its economy to health, just as other countries that have suffered the scourge of wars have managed to rise again and build stronger and more sustainable economies.