Sudan's war is an economic disaster: here's how bad it could get

IOL News

5 days ago

People walk past destroyed vehicles on the grounds of a hospital in Sudan's capital Khartoum in April 2025.
Image: AFP
In the two years of civil war in Sudan the country has lost more than 50% of it's economy.
Image: AFP
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My research applies economy-wide models to understand how conflict affects national development. In a recent study, my colleagues and I used this approach to answer the question: what will happen to Sudan's economy and poverty levels if the war continues through 2025?
To assess the economic impact of the conflict, we used a Social Accounting Matrix multiplier model. This is a tool that captures how shocks affect different sectors and other agents of the economy, such as firms, government and households.
Based on our modelling, the answer is devastating: the conflict could shrink the size of Sudan's economy by over 40% from 2022 levels, plunging millions more into poverty.
We modelled two scenarios to capture the potential trajectories of Sudan's economy.
The extreme scenario assumes a sharp initial collapse, with a 29.5% contraction in the size of the economy in 2023 and 12.2% in 2024, followed by a 7% decline in 2025, reflecting some stabilisation over time.
The moderate scenario, based on World Bank projections, applies a 20.1% contraction in 2023 and a 15.1% drop in 2024, also followed by a 7% reduction in 2025, indicating a slower but more prolonged deterioration.
We estimated the annual figures and report only the aggregate impacts through 2025 for clarity.
We found that if the conflict endures, the value of Sudan's economy will contract by up to 42% from US$56.3 billion in 2022 (pre-conflict) to US$32.4 billion by the end of 2025. The backbone of livelihoods – agriculture – will be crippled. And the social fabric of the country will continue to fray.
How we did it
Our Social Accounting Matrix multiplier model used data from various national and international sources to show the impact of conflict on the value of the economy, its sectors and household welfare.
We connected this to government and World Bank data to reflect Sudan's current conditions.
This allowed us to simulate how conflict-driven disruptions affect the value of the economy, its sectors and household welfare.
What we found
Under the extreme scenario, we found: Gross domestic product collapse : Gross domestic product (GDP) measures the total value of all goods and services produced in a country within a year. It's a key indicator of economic health. We found that the value of Sudan's economy could contract by up to 42%. This means the country would be producing less than 60% of what it did before the conflict. This would affect incomes, jobs, government revenues and public services. The industrial sector – heavily concentrated in Khartoum – would be hardest hit, with output shrinking by over 50%. The value of services like education, health, transport and trade would fall by 40%, and agriculture by more than 35%.
Job losses : nearly 4.6 million jobs – about half of all employment – could disappear. Urban areas and non-farm sectors would be worst affected, with over 700,000 farming jobs at risk.
Incomes plummet : household incomes would decline across all groups – rich and poor, rural and urban – by up to 42%. Rural and less-educated households suffer the most.
Poverty spikes : up to 7.5 million more people could fall into poverty, adding to the 61.1% poverty level in 2022. In rural areas, the poverty rate could jump by 32.5 percentage points from the already high rural poverty rate pre-conflict (67.6% of the rural population). Women, especially in rural communities, are hit particularly hard. Urban poverty, which was at 48.8% pre-conflict, increases by 11.6 percentage points.
The agrifood system – which includes farming, food processing, trade and food services – would lose a third of its value under the extreme scenario.
Why these findings matter
Sudan was already in a fragile state before the war. It was reeling from decades of underinvestment, international sanctions and institutional breakdown.
The war has reversed hard-won gains in poverty reduction. It is also dismantling key productive sectors – from agriculture to manufacturing – which will be essential for recovery once the conflict ends. Every month of continued fighting adds to the damage and raises the cost of rebuilding.
Our projections already show major economic collapse, yet they don't include the full extent of the damage. This includes losses in the informal economy or the strain on household coping strategies. The real situation could be even worse than what the data suggests.
What needs to be done
First and foremost, peace is essential. Without an end to the fighting, recovery will be impossible.
Second, even as conflict continues, urgent action is needed to stabilise livelihoods. This means: supporting agriculture in areas that remain relatively safe. Food production must be sustained to prevent famine.
restoring critical services where possible – particularly transport, trade and retail – to keep local economies functioning
protecting the most vulnerable, such as women in rural areas and the elderly, through expanded social protection and targeted cash assistance.
Third, prepare for recovery. The international community – donors, development banks and NGOs – must begin laying the groundwork for post-conflict reconstruction now. This includes investment in public infrastructure, rebuilding institutions and re-integrating displaced populations.
The bottom line
Sudan's war is more than a political crisis. It is an economic catastrophe unfolding in real time. One that is deepening poverty, destroying livelihoods and erasing years of progress.
Our research provides hard numbers to describe what Sudanese families are already experiencing every day.
The country's economy is bleeding. Without a shift in the trajectory of the conflict, recovery could take decades – if it happens at all. | The Conversation
Khalid Siddig is Senior Research Fellow and Program Leader for the Sudan Strategy Support Program, International Food Policy Research Institute (IFPRI)