War Economy in Sudan
War Economy in Sudan
A Reading of the World Bank Report (May 2025)and the Post-War Challenges
By Omer Sidahmed
Sudan on the Brink: Economy in the Grip of War and the Long Road to Recovery
Introduction: A War That Destroyed Everything
Two years after war broke out in April 2023, Sudan stands at the edge of an unprecedented humanitarian and economic catastrophe. Over 61,000 people killed in Khartoum alone, and 12.9 million displaced — the worst displacement crisis globally. The war hasn't only displaced people — it has displaced the state itself: services halted, institutions collapsed, and the economy disintegrated.
The new World Bank report paints a bleak picture — but also proposes a roadmap to recovery, provided the war ends and a national reform project begins. This article reviews the key findings of the report and offers a critical reading based on Sudan's complex political-economic reality.
Economic Collapse in Numbers
Sudan's GDP shrank sharply by 29.4% in 2023, followed by another 13.5% contraction in 2024, reflecting the massive destruction of infrastructure, production, and services. Inflation surged to 170%, and unemployment hit 47%. Most alarming: extreme poverty jumped to 71% of the population — up from 33% pre-war — based on the $2.15/day poverty line.
The Sudanese pound collapsed, with black-market exchange rates exceeding 2,600 pounds per dollar, far beyond the official rate. Government revenues dropped to below 5% of GDP, leaving the state unable to pay salaries or fund public services.
Agriculture: A Battered Sector with Lingering Hope
Agriculture accounts for 35% of GDP and over 50% of jobs, yet it was devastated by war: farmers displaced, equipment looted, roads destroyed, and supplies disrupted. Grain output fell 46% in 2023 compared to the previous year, with sorghum and millet yields 50% below average.
Yet the report identifies agriculture as a key pillar of recovery. Due to its geographical spread outside conflict zones, it remained relatively intact and became a refuge for families fleeing urban warzones. With proper investment, infrastructure, and institutional support, the sector could double its contribution to growth, the report argues.
Path to Recovery: Reform or Reconstruction?
The World Bank outlines a three-pronged approach for urgent recovery:
Economic Policies
Resume the Heavily Indebted Poor Countries (HIPC) debt relief initiative.
End commodity subsidies and reform electricity tariffs to favor the poor.
Unify exchange rates and restore trust in the financial system.
Structural Reforms
Launch major investments in agriculture and infrastructure.
Reopen trade routes and reduce customs tariffs.
Limit military control of the economy and dismantle the shadow war economy.
Social Justice and Peacebuilding
National reconciliation, truth commissions, reintegration of the displaced.
Reform education and health systems, and expand social safety nets.
Demine war zones and create safe environments for people and economic activity.
Critique: A Technocratic Vision Detached from War Economics
Isolated Indicators
While the report details GDP contraction, inflation, unemployment, and currency collapse, it treats them as though they result from a natural disaster or external shock — ignoring war-related financing mechanisms and the actors driving the conflict.
The informal war economy — the real foundation of Sudan's current economy — is entirely absent. So too are illicit financial flows that fund militias, gold smuggling, and parallel foreign exchange networks. There's no analysis of how state institutions were captured by military elites and militias, transforming public assets into fuel for war.
Total Omission of Foreign Trade
In a country heavily reliant on imports and exports, the report ignores foreign trade dynamics. There's no discussion of border control, where gold exports go, or how neighboring countries like the UAE, Egypt, Libya, and Chad facilitate or enable smuggling networks. Arms trade and informal finance channels that sustain the war economy are not addressed.
Banking System: The Elephant in the Room
It's puzzling that the report completely omits the banking sector, which effectively collapsed. Most commercial banks ceased operations within the first month of war in Khartoum — the hub for over 70% of bank branches. The system is now fragmented, distrusted, and isolated from global financial networks. Without functioning financial institutions, no monetary reform is possible, despite the report's recommendations.
From 'Development Critique' to 'War Critique'
A Chatham House report (March 2025) found that gold has become direct fuel for the war, with 70–80% of production smuggled, primarily to the UAE, and used to purchase arms and pay fighters. The state is absent, and its most valuable resource is financing conflict, not development.
Repackaged Neoliberal Failure
The World Bank's proposed reforms recycle previous neoliberal prescriptions — privatization, subsidy cuts, price liberalization — which have failed before. These policies did not deliver social justice; they deepened inequality and dependence.
Even after the December Revolution, these policies persisted under the grip of the former regime's security apparatus. Social support systems were dismantled with no viable alternatives, while security forces monopolized national resources.
Justice and Reconciliation: Beyond Cosmetic Fixes
Justice can't be legislated; it requires dismantling impunity and marginalization systems. Reconciliation isn't slogans — it's accountability, militia disarmament, and reintegration. Displaced communities won't return without guarantees, compensation, land restitution, and restored services.
Lessons from South Africa and Rwanda
In South Africa, reconciliation wasn't free — it was tied to truth-telling and confession of crimes. In Rwanda, Gacaca community courts combined justice with reconciliation.
The lesson: no peace without genuine transitional justice that honors victims and confronts atrocities.
No Recovery Without Ending the War
All recommendations in the report are moot unless the war ends immediately. There can be no economic reform, return of displaced people, or reconstruction amid continued bombing and militia rule.
Ending the war is not optional — it is the first and absolute priority.
Conclusion: From Ruin to Hope
Sudan's recovery is impossible without immediate cessation of hostilities and a new political path toward civil governance and inclusive justice. Continued war renders even the most rational reforms empty illusions.
Once the guns fall silent, a short-term emergency plan must begin — centered on agriculture as a practical base for food security and social stability. This plan should prioritize rebuilding essential agricultural infrastructure destroyed by war and decades of neglect, including:
Irrigation channels and medium-sized dams (Gezira, Rahad, Halfa, Suki).
Farm roads linking production to markets.
Research and extension centers.
Crop storage and aggregation hubs.
Water wells and livestock drinking sources.
Natural rangelands damaged by drought and displacement.
Inland fisheries that ceased in regions like Upper Nile and northern dams.
This infrastructure must be restored urgently and progressively, alongside provision of fuel, seeds, fertilizers, equipment, and direct technical support for farmers, herders, and fishers. Such a plan can open a recovery window and restore local communities' trust in a functioning state.
Agriculture can be the cornerstone — but not the foundation alone. True recovery requires comprehensive political, institutional, and economic reform to move Sudan from extraction to production, from looting to justice, and from exclusion to inclusive governance.
June 2025
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Al Taghyeer
6 hours ago
- Al Taghyeer
War Economy in Sudan
War Economy in Sudan A Reading of the World Bank Report (May 2025)and the Post-War Challenges By Omer Sidahmed Sudan on the Brink: Economy in the Grip of War and the Long Road to Recovery Introduction: A War That Destroyed Everything Two years after war broke out in April 2023, Sudan stands at the edge of an unprecedented humanitarian and economic catastrophe. Over 61,000 people killed in Khartoum alone, and 12.9 million displaced — the worst displacement crisis globally. The war hasn't only displaced people — it has displaced the state itself: services halted, institutions collapsed, and the economy disintegrated. The new World Bank report paints a bleak picture — but also proposes a roadmap to recovery, provided the war ends and a national reform project begins. This article reviews the key findings of the report and offers a critical reading based on Sudan's complex political-economic reality. Economic Collapse in Numbers Sudan's GDP shrank sharply by 29.4% in 2023, followed by another 13.5% contraction in 2024, reflecting the massive destruction of infrastructure, production, and services. Inflation surged to 170%, and unemployment hit 47%. Most alarming: extreme poverty jumped to 71% of the population — up from 33% pre-war — based on the $2.15/day poverty line. The Sudanese pound collapsed, with black-market exchange rates exceeding 2,600 pounds per dollar, far beyond the official rate. Government revenues dropped to below 5% of GDP, leaving the state unable to pay salaries or fund public services. Agriculture: A Battered Sector with Lingering Hope Agriculture accounts for 35% of GDP and over 50% of jobs, yet it was devastated by war: farmers displaced, equipment looted, roads destroyed, and supplies disrupted. Grain output fell 46% in 2023 compared to the previous year, with sorghum and millet yields 50% below average. Yet the report identifies agriculture as a key pillar of recovery. Due to its geographical spread outside conflict zones, it remained relatively intact and became a refuge for families fleeing urban warzones. With proper investment, infrastructure, and institutional support, the sector could double its contribution to growth, the report argues. Path to Recovery: Reform or Reconstruction? The World Bank outlines a three-pronged approach for urgent recovery: Economic Policies Resume the Heavily Indebted Poor Countries (HIPC) debt relief initiative. End commodity subsidies and reform electricity tariffs to favor the poor. Unify exchange rates and restore trust in the financial system. Structural Reforms Launch major investments in agriculture and infrastructure. Reopen trade routes and reduce customs tariffs. Limit military control of the economy and dismantle the shadow war economy. Social Justice and Peacebuilding National reconciliation, truth commissions, reintegration of the displaced. Reform education and health systems, and expand social safety nets. Demine war zones and create safe environments for people and economic activity. Critique: A Technocratic Vision Detached from War Economics Isolated Indicators While the report details GDP contraction, inflation, unemployment, and currency collapse, it treats them as though they result from a natural disaster or external shock — ignoring war-related financing mechanisms and the actors driving the conflict. The informal war economy — the real foundation of Sudan's current economy — is entirely absent. So too are illicit financial flows that fund militias, gold smuggling, and parallel foreign exchange networks. There's no analysis of how state institutions were captured by military elites and militias, transforming public assets into fuel for war. Total Omission of Foreign Trade In a country heavily reliant on imports and exports, the report ignores foreign trade dynamics. There's no discussion of border control, where gold exports go, or how neighboring countries like the UAE, Egypt, Libya, and Chad facilitate or enable smuggling networks. Arms trade and informal finance channels that sustain the war economy are not addressed. Banking System: The Elephant in the Room It's puzzling that the report completely omits the banking sector, which effectively collapsed. Most commercial banks ceased operations within the first month of war in Khartoum — the hub for over 70% of bank branches. The system is now fragmented, distrusted, and isolated from global financial networks. Without functioning financial institutions, no monetary reform is possible, despite the report's recommendations. From 'Development Critique' to 'War Critique' A Chatham House report (March 2025) found that gold has become direct fuel for the war, with 70–80% of production smuggled, primarily to the UAE, and used to purchase arms and pay fighters. The state is absent, and its most valuable resource is financing conflict, not development. Repackaged Neoliberal Failure The World Bank's proposed reforms recycle previous neoliberal prescriptions — privatization, subsidy cuts, price liberalization — which have failed before. These policies did not deliver social justice; they deepened inequality and dependence. Even after the December Revolution, these policies persisted under the grip of the former regime's security apparatus. Social support systems were dismantled with no viable alternatives, while security forces monopolized national resources. Justice and Reconciliation: Beyond Cosmetic Fixes Justice can't be legislated; it requires dismantling impunity and marginalization systems. Reconciliation isn't slogans — it's accountability, militia disarmament, and reintegration. Displaced communities won't return without guarantees, compensation, land restitution, and restored services. Lessons from South Africa and Rwanda In South Africa, reconciliation wasn't free — it was tied to truth-telling and confession of crimes. In Rwanda, Gacaca community courts combined justice with reconciliation. The lesson: no peace without genuine transitional justice that honors victims and confronts atrocities. No Recovery Without Ending the War All recommendations in the report are moot unless the war ends immediately. There can be no economic reform, return of displaced people, or reconstruction amid continued bombing and militia rule. Ending the war is not optional — it is the first and absolute priority. Conclusion: From Ruin to Hope Sudan's recovery is impossible without immediate cessation of hostilities and a new political path toward civil governance and inclusive justice. Continued war renders even the most rational reforms empty illusions. Once the guns fall silent, a short-term emergency plan must begin — centered on agriculture as a practical base for food security and social stability. This plan should prioritize rebuilding essential agricultural infrastructure destroyed by war and decades of neglect, including: Irrigation channels and medium-sized dams (Gezira, Rahad, Halfa, Suki). Farm roads linking production to markets. Research and extension centers. Crop storage and aggregation hubs. Water wells and livestock drinking sources. Natural rangelands damaged by drought and displacement. Inland fisheries that ceased in regions like Upper Nile and northern dams. This infrastructure must be restored urgently and progressively, alongside provision of fuel, seeds, fertilizers, equipment, and direct technical support for farmers, herders, and fishers. Such a plan can open a recovery window and restore local communities' trust in a functioning state. Agriculture can be the cornerstone — but not the foundation alone. True recovery requires comprehensive political, institutional, and economic reform to move Sudan from extraction to production, from looting to justice, and from exclusion to inclusive governance. June 2025
Al Taghyeer
23-05-2025
- Al Taghyeer
Sudan's Shadow Economy: The Hidden Alliances Funding War and Suppressing Civilian Transition
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.'
Al Taghyeer
20-05-2025
- Al Taghyeer
Appointment of Kamal Idris as Prime Minister of Sudan stirs contradictory reactions
Observers describe the appointment as void of required political legitimacy and apparently failing to secure broad consensus. Port Sudan: Altaghyeer The appointment of Dr. Kamal Idris as Prime Minister of Sudan on Monday has stirred intense debate among those who support him and a strong reaction among those who opposing his appointment, as he has been linked to controversial regimes, including Omar al-Bashir's, the December Revolution but equally with the current war period. Who is Kamal Idris? Idris graduated from the University of Khartoum's Faculty of Law. He holds a Ph.D. in International Law from the Graduate Institute of International Studies in Geneva, Switzerland. He served as Director-General of the World Intellectual Property Organization (WIPO) in 1997-2003. Throughout his career, he has held various distinguished positions, including member of the UN International Law Commission and spokesperson for the Group of Developing Countries. He is fluent in Arabic, English, and French, with knowledge of Spanish. Idris has received numerous awards and honors, including honorary doctorates from several universities worldwide. Contradiction and Criticism The newly appointed Prime Minister was described as a self-contradictory who seeks only his own interests. Critics pointed out that he was an uncommitted member of the Sudanese Communist Party and engaged in activities of its university students' offshoot 'the Democratic Front' and a member of the late Sudan military ruler Jaffar Nimeri's party 'the Sudanese Socialist Union' before aligning with the Islamic Front. He was a candidate in the 2010 Presidential Elections against al-Bashir with the support of Islamists, who wanted to make the elections plausible as a true democratic process. He appeared in a video clip during the latest revolution describing al-Bashir's regime as criminal and demanding it's resignation and recently appeared in a recording speech denouncing any debasing of the national army, saying such persons should be denied to assume any public posts. Challenges Ahead of the New Prime Minister The new Prime Minister Faces significant challenges, including managing the political and economic crisis, rebuilding state institutions, and achieving stability amidst the ongoing war between the Sudanese army and the paramilitary Rapid Support Forces. He also faces challenges of being accepted by the Sudanese masses, with many expressing their rejection of his appointment, citing corruption cases linked to his career. In 2006, he reportedly faked his birth date certificate, pushing his birth date from 1945 to 1954, to fit for staying at his job, leaping away from looming retirement age at the time. Reactions Some observers believe that Kamal Idris's chances of success might be greater than expected given his neutral stance and this step could potentially pave the way for a ceasefire. But others cited reservations. Nour al-Din Salah al-Din, a partisan leader, stated that the appointment lacks the required political legitimacy, emphasizing such a move needs broad consensus resulting from a Sudanese inclusive political process. Academic Adel Taha Suleiman believes that the question was not rejecting Kamal Idris' appointment but rather putting an end to the current raging war. Idris' appointment was backed by the Islamic movement leadership who wanted the war to continue therefore Idris will come and leave without solving the roots causes of the problem, he argued.
