Sudan’s Economy in Wartime: Forced Disruption and Untapped Potential| Sudanow Magazine

Khartoum (Sudanow)

Since the outbreak of war in mid-April 2023, losses have extended far beyond lives and infrastructure to encompass the very foundations of the national economy. Sudan has shifted from an economy burdened by chronic imbalances yet still reformable, to one severely strained, with its institutions eroding under the weight of conflict. The war has reshaped the economic landscape: supply chains have been disrupted, revenues have declined, crisis-related spending has surged, the informal economy has expanded, and institutional oversight has weakened.

Yet Sudan still possesses substantial untapped potential—agricultural, mineral, and human—which remains either underutilized or paralyzed. This makes economic recovery feasible, provided that political will and stability are secured.

This report seeks to present an in-depth analysis of Sudan’s economy amid wartime conditions by dissecting structural imbalances, exploring latent potential, and examining the gap between current realities and possible recovery paths. To this end, Sudanow conducted a series of interviews with economic experts and specialists to develop a comprehensive perspective linking sectoral performance to wartime transformations, ultimately outlining pathways for recovery and reconstruction on more stable and efficient foundations.

Agricultural Sector: Vast Resources Under Pressure

Sudan possesses approximately 21 million hectares of arable land—around 60% of its total area—along with climatic diversity that supports the production of grains, cotton, sesame, and gum arabic, in addition to a vast livestock resource.

However, the war has disrupted supply chains, caused shortages of fuel and agricultural inputs, displaced farmers, and led to the looting of machinery. This has resulted in a decline in cultivated areas and deterioration of major irrigation schemes. The crisis has been further compounded by floods that inflicted widespread damage on farmland and livestock, as well as the proliferation of organized smuggling of agricultural products.

Agricultural expert Dr. Babiker Hamad Ahmed Abdullah emphasizes that agriculture has historically been the backbone of Sudan’s economy, but the war has deepened its structural weaknesses by targeting production infrastructure. He argues that overcoming the crisis requires a comprehensive recovery plan, beginning with urgent measures such as providing concessional financing, rehabilitating infrastructure, ensuring access to essential inputs, and stabilizing affected communities.

In the medium to long term, he calls for deep structural reforms, including the establishment of a unified agricultural institutional body, restructuring financing systems to incorporate insurance tools, and reforming pricing and marketing policies to protect producers from market volatility and reduce the dominance of intermediaries.

Economist Dr. Hashim Rahma highlights the importance of coordination between the Ministry of Agriculture, the Agricultural Bank, and the Ministry of Finance to provide seeds and fertilizers and ensure liquidity for farmers, considering this a key driver for increasing production and closing the food gap. He also stresses the need to regulate cross-border trade to curb the smuggling of agricultural and livestock products.

Gold: A Pillar of Resilience and a Recovery Opportunity

Gold has been the most resilient sector during the war, with annual production ranging between 64 and 80 tons, and official export revenues estimated at around $1.57 billion in 2024. About 90% of production relies on traditional (artisanal) mining, which extracts only 30% of available reserves—indicating significant potential for increased output through technology and formalization.

However, the sector suffers from large-scale smuggling outside official channels, depriving the state of substantial revenues. In January 2026, a joint committee was formed between the Central Bank of Sudan and the Sudanese Mineral Resources Company to combat smuggling, alongside an agreement with Saudi Arabia to export gold—steps that could strengthen official revenues.

Economist Dr. Al-Fatih Osman Mahjoub notes that gold has partially offset the decline in agricultural and livestock exports, while artisanal mining has played a critical role in providing employment for millions of young people and supporting community initiatives.

To maximize the benefits of gold resources, he advocates supporting artisanal miners, combating smuggling, offering competitive purchase prices, and establishing a national refinery and gold exchange. He emphasizes that focusing on gold, alongside agriculture and energy, could serve as an effective launchpad for economic recovery—provided there is political will and sound regulatory policies.

Dr. Hashim Rahma adds that strict oversight of the gold sector, ensuring that exports occur exclusively through official channels, is essential for rebuilding foreign currency reserves and stabilizing the exchange rate.

Fiscal Policy: From Breakdown to Partial Containment

Sudan’s economy has experienced a sharp decline in tax revenues and an expanding fiscal deficit, with government spending increasingly directed toward security rather than development. The expansion of liquidity led to inflation exceeding 300% at certain periods, although recent trends show notable improvement.

According to Dr. Al-Fatih Osman, inflation dropped to around 56% in 2026 due to the adoption of contractionary policies: reducing deficit financing (money printing), tightening monetary policy, and rationalizing public spending. This marks a transition from complete fiscal disarray to a phase of relative containment—though still fragile and dependent on sustained financial and monetary discipline.

He underscores that maintaining this discipline and avoiding a return to inflationary financing are critical to preventing economic relapse. However, he cautions that lower inflation alone does not improve living standards without price stability and restored confidence in financial institutions.

Dr. Hashim Rahma calls for rationalizing government expenditure—particularly on foreign travel and non-essential activities—while delegating responsibilities to embassies to reduce foreign currency outflows. He also stresses the importance of improving public sector wages alongside revitalizing cooperative societies to regulate markets and combat monopolistic practices. These reforms, he argues, require a strong and cohesive government capable of restoring institutional trust.

Energy and Industry: Rebuilding the Production System

Before the war, industry contributed approximately 12–15% of GDP, with a heavy concentration in Khartoum State. During the conflict, between 60% and 80% of industrial facilities were damaged—particularly in food processing, oils, textiles, and pharmaceuticals—leading to job losses and supply chain disruptions.

The energy sector, already facing a gap between production (around 3,500 megawatts) and demand, saw further deterioration due to damaged networks and fuel shortages. Oil production, which ranged between 60,000 and 70,000 barrels per day before the war, also suffered from infrastructure damage.

On the other hand, Sudan has significant potential in solar energy, with average solar radiation levels of 5–7 kWh/m² per day, positioning it well for expansion in renewable energy.

Dr. Hashim Rahma proposes that the Ministry of Industry begin with a comprehensive assessment of damaged factories and prioritize financing to restart those with immediate economic impact—particularly those linked to food security such as edible oils, sugar, and animal feed. He also calls for supporting small and medium-sized enterprises, improving the business environment, and ensuring access to energy and financing.

He adds that improving the business climate and linking industry to local resources—particularly agro-processing and mining-based industries—could raise the sector’s contribution to over 20% of GDP.

Dr. Al-Fatih Osman Mahjoub emphasizes that investment in energy—both conventional and renewable—is a prerequisite for economic revival, as it directly supports industrial production and attracts investment. He also points out that developing the oil sector and restructuring its management could help generate foreign exchange and improve the trade balance.

Conclusion: Pathways to Economic Recovery

Experts agree that Sudan’s economic recovery requires strategic focus on sectors capable of delivering rapid and tangible results. Chief among these is the gold sector—through regulation, anti-smuggling measures, and maximizing returns via a national refinery and exchange—alongside revitalizing agriculture as the country’s core competitive advantage, supported by reforms in financing and marketing systems.

Equally critical is the development of the energy sector to ensure production stability and attract investment, particularly through expanding solar energy.

Ultimately, the success of these strategies hinges on the presence of a strong, competent government capable of enforcing resource governance, rationalizing public spending, and rebuilding trust in financial institutions—paving the way for gradual improvements in living standards and currency stability.

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