Sudan's Shadow Economy: The Hidden Alliances Funding War and Suppressing Civilian Transition

Al Taghyeer

23-05-2025

Sudan's Shadow Economy: The Hidden Alliances Funding War and Suppressing Civilian Transition
By: Omer Sidahmed
May 2025
From State Economy to Loot Economy
Sudan's shadow economy didn't arise in a vacuum. It wasn't formed on the margins of the state — it emerged from its very core. Over decades, it became a central tool in the hands of a militarized system comprising the army, intelligence agencies, and militias. These forces forged alliances with Islamist political networks to entrench control over the state and society. With the eruption of the revolution and then the outbreak of war, the true nature of this economy became clear: not just a source of illicit wealth, but a fuel for conflict, a platform for distorting public consciousness, and a shield protecting power networks from collapse.
An Economy Without — and Against — the State
Sudan's shadow economy has evolved beyond the traditional definition of informal activities. It is now a structured system operating outside the state, financing, smuggling, exporting, and militarizing with no oversight or accountability. It manifests in the smuggling of gold from conflict zones via armed and politically protected routes across borders, in currency trading that sustains the parallel market outside the banking system, and in a web of foreign trade activities managed by a small elite tied to security apparatuses. These include fuel import companies shielded by the remnants of the former regime, as well as informal financial transfers that sustain the war economy.
Estimates suggest that between 50% and 80% of Sudan's gold production is smuggled out of official channels. The country's gold smuggling losses over the past decade are estimated at no less than $23 billion — and possibly as high as $36.8 billion. These numbers highlight the catastrophic economic impact of the shadow economy, and how gold has shifted from a national resource to a secret source of war funding and elite enrichment.
From Sanctions to Domination: The Birth of a Hidden Alliance
During the years of U.S. sanctions, alternative networks for trade and finance emerged, led by businessmen and security-linked institutions aligned with the regime. Instead of addressing the crisis through national alternatives, the state opened the market to a parasitic class that thrived in the shadows, becoming the economic arm of the ruling power. Even after sanctions were lifted in 2020, this structure was not dismantled — it deepened. Following the October 25 coup, these networks reasserted control over markets and resources, initiating a new phase: converting the shadow economy into a direct war-financing mechanism.
Rentierism: The Structural Foundation of the Shadow Economy
One of the deep-rooted causes behind the swelling of Sudan's shadow economy is the dominance of a rentier economy — the prevailing model since independence. Sudan has historically relied on raw material exports with no added value: from cotton and oilseeds in the 1960s and 70s, to oil in the 2000s, and finally to gold after South Sudan's secession in 2011. This dependency has left the country vulnerable to external markets and lacking an independent domestic production base.
Under authoritarian regimes and institutional corruption, the revenues from these resources were not invested in sustainable development. Instead, they were redistributed through patronage networks favoring ruling elites and security agencies. Rather than being a driver for development, the rentier model became a breeding ground for the shadow economy. Crucially, this economy did not emerge from the peripheries, as often assumed — it was born and nurtured in the center, within state institutions themselves, with complicity from the ruling elite. It became a tool for unofficial financing and consolidating political and military power. In this way, rentierism fused with corruption and militarization to create a parallel economy — not based on production, but on looting, not governed by law, but shielded by it.
Arms and Narcotics Trade: The Forbidden Face of the Shadow Economy
One of the most dangerous aspects of the shadow economy is the involvement of the ruling system in arms and narcotics trafficking. During the Al-Ingaz regime, documented reports from media and social platforms revealed incidents of 'drug containers' arriving in or passing through Sudan under the protection or complicity of security agencies. Though hidden from public view, this trade became a covert funding source for war, a tool for militia recruitment, and a means of money laundering that expanded the influence of power centers.
A Funded War on Awareness: Media as a Weapon Against Civilian Rule
The shadow economy doesn't just fund weapons; it also fuels a war for control over public consciousness. This media campaign is managed from hubs outside Sudan — in capitals such as Cairo, Istanbul, Dubai, and Doha — led by media figures from the former regime and affiliated ideological-security networks. These groups produce funded content on social media that justifies the war, demonizes revolutionary forces, rallies public opinion against civilian transition, and promotes the continuation of a war that has displaced millions, killed thousands, and devastated the country.
The objective isn't only to suppress armed revolution, but to assassinate the very idea of a civilian state. Democracy is portrayed as a threat to stability, while military rule is presented as the only option for national unity — a blatant embodiment of state and societal militarization.
Dismantling the System: Not Administrative Reform, But a Long-Term Struggle
The dismantling of Sudan's shadow economy cannot be viewed as an administrative or legal procedure — especially in the context of an open war, institutional collapse, and military control over economic lifelines. This system won't fall through decisive victory alone, but through the erosion of its absolute control, when cracks begin to show in the regime's security and economic structure.
Despite the militarization of daily life, civilian action must not be paralyzed or surrender to the status quo. The path forward lies in working within the war, not on its margins, to develop a realistic and radical transition project. This begins with fostering new public awareness that exposes the structural link between arms and wealth, and places the shadow economy under popular and international scrutiny.
This effort requires close monitoring of the parallel market and analysis of its mechanisms, paving the way for fair economic policies and legislation that reorganize the market and dismantle smuggling monopolies. Crimes such as trafficking, narcotics trade, and gold theft must be documented and transformed into legal and media files that can be pursued, not merely retold.
At the same time, independent and community-based media must rise as a front of resistance, countering the disinformation produced abroad and challenging the official narratives that justify war and vilify civilian transition. This media confrontation is not a luxury — it's essential for building a coherent, resistant public opinion.
Finally, any attempt at transformation must include building flexible and realistic civilian alliances that propose a national alternative project. This project must redefine the state, sever the link between power and wealth, and shift economic control from militias back to the community. This is not a ready-made plan — it's an open front that requires daily effort and initiative from within the cracks war has created, not in waiting for its end.
Working Amid War: No Time to Wait
Despite the militarized reality and escalating conflict, this should not be an excuse for inaction or surrender to the status quo. On the contrary, the need now is to work from within the war — within its cracks — to lay the groundwork for a true civilian transformation. In a context like Sudan, change doesn't wait for victory — it is built inside the struggle itself, through realistic, deliberate steps rooted in public action and collective will.
Tools for Change: From Awareness to Organization
This path requires new tools and the creation of a critical public consciousness that understands the battle is not just military or political — but economic and cultural too. It begins by exposing the economic foundations of the armed system and highlighting the structural link between weapons and wealth. This enables internal and external pressure on power centers. Monitoring the parallel market and understanding its mechanisms is key for a future confrontation using just policies that dismantle shadow monopolies and restore the economy to the public.
Equally important is the documentation of crimes like smuggling, drug trafficking, and gold looting — vital for building legal and media cases that can be pursued in future moments of accountability. On the media front, alternative, independent, and community media must be supported to counter the misinformation spread from foreign media rooms and to promote a resistance narrative based on the revolution, not the war machine.
In parallel, civilian alliances must be built — realistic and resilient — offering a political and economic alternative that redefines the state-society-resource relationship and breaks the link between authority and plunder.
An Open Front: A Beginning, Not an End
What we face today is not a passing political crisis but a historic moment requiring a complete redefinition of the national project. This is not a finished blueprint, but an open front for gradual transformation — built not from outside collapse, but from within it. The true challenge is not waiting for war to end, but using the fractures it created to fuel civil resistance and spark new beginnings — toward a democratic, civilian, just, and salvaging state that reflects the people's aspirations, not the interests of entrenched elites.
References
1. 1. Global Witness (2019). 'The Ones Left Behind: Sudan's Secret Gold Empire.'
2. 2. International Crisis Group (2022). 'The Militarization of Sudan's Economy.'
3. 3. Human Rights Watch (2020). 'Entrenched Impunity: Gold Mining and the Darfur Conflict.'
4. 4. United Nations Panel of Experts on the Sudan (2020–2023). Reports to the Security Council.
5. 5. BBC Arabic & Al Jazeera Investigations (2021–2023). Coverage of Sudan's illicit trade and media operations.
6. 6. Radio Dabanga (2015–2023). Reports on drug trafficking and corruption during Al-Ingaz regime.
7. 7. Sudan Tribune (2020). 'Forex crisis and informal currency trading in Sudan.'