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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
