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Economics

Sudan’s Civil War, 2023 Onwards: Economic Collapse and Famine

Real GDP fell by 23.5% in 2023 and 19.3% in 2024, according to the IMF. The World Bank's estimates are −29.4% and −13.5%.

Key figures at a glance
  • Real GDP fell by 23.5% in 2023 and 19.3% in 2024, according to the IMF. The World Bank’s estimates are −29.4% and −13.5%.[1][2]
  • On the parallel (street) market, the US dollar cost about 565 Sudanese pounds in April 2023 and 8,400 pounds in mid-September 2026. That is roughly a 14-fold rise.[31]
  • Internal displacement peaked at 11.6 million people in January 2025. It fell to 8.8 million by June 2026 as 4.4 million people returned home.[25]
  • About 4.3 million Sudanese refugees were living in neighbouring countries in February 2026, including about 1.4 million in Egypt.[27]
  • In November 2025 famine was confirmed in El Fasher and Kadugli. At that time 21.2 million people (45% of the population) faced crisis-level hunger or worse.[6]
  • Extreme poverty rose from 33% of the population in 2022 to 71% in 2024, on World Bank estimates.[2]
  • Sudan produced about 70 tonnes of gold in 2025, but the central bank recorded official exports of only 14.7 tonnes.[52][53]
  • By mid-October 2026 the UN’s 2026 humanitarian plan for Sudan, which asks for $2.87 billion, had received $1.24 billion (about 43%).[29]

1. Background: how the war began

Sudan’s war is a fight between two armed forces that were once partners in power: the Sudanese Armed Forces (SAF), led by General Abdel Fattah al-Burhan, and the paramilitary Rapid Support Forces (RSF), led by General Mohamed Hamdan Dagalo, known as “Hemedti”. The RSF grew out of the Janjaweed militia and was formally created in 2013.[14] When fighting broke out, the SAF had up to 200,000 personnel and the RSF about 100,000.[14]

Economic causes run through the political story. When South Sudan became independent in 2011, Sudan lost most of its oil. Oil had provided about 50% of government revenue and 95% of exports.[3] The World Bank says the split cost Sudan about three-quarters of its oil output.[2] Protests over prices and fuel followed in 2013, and demonstrations in 2018 led to the removal of President Omar al-Bashir. A transitional government was formed in 2019.[3][14]

In 2021 the SAF and RSF jointly carried out a coup against the civilian prime minister, Abdalla Hamdok. A power struggle between their two leaders followed.[14] After the coup on 25 October 2021, the World Bank froze $1.8 billion in grants. About $50 billion of debt relief that Western countries and international lenders had planned was also suspended.[57] Sudan lost access to the external finance it needed just as its economy was weakest. War began on 15 April 2023.[11]

DateEvent
2011South Sudan secedes. Sudan loses most of its oil revenue and exports.[3]
2013RSF created from the Janjaweed militia.[14]
2018–2019Mass protests. Bashir is removed and a transitional government is formed.[3]
October 2020Juba Peace Agreement signed.[3]
25 October 2021Military coup. The World Bank pauses disbursements and freezes $1.8 billion in grants.[3][57]
15 April 2023War between the SAF and RSF begins.[11]
11 and 20 May 2023Jeddah declaration on protecting civilians, then a short ceasefire. Neither holds.[19]
August 2024Ceasefire talks in Switzerland. One warring side is absent.[19]
February 2025The army breaks the long siege of El Obeid.[24]
21 March 2025The SAF retakes the Republican Palace in Khartoum.[12]
12 September 2025The “Quad” (US, Saudi Arabia, Egypt, UAE) proposes a roadmap: humanitarian truce, then ceasefire, then political process.[18]
26–27 October 2025The RSF takes El Fasher after an 18-month siege. Burhan confirms the army’s withdrawal.[11]
4 November 2025Famine confirmed in El Fasher and Kadugli.[6]
24 November 2025The RSF announces a unilateral three-month truce. The army had rejected the Quad proposals the day before.[15]
8–11 December 2025The RSF claims the Heglig oil field. South Sudanese forces move in under a three-way deal.[13]
January 2026The RSF and SPLM-N take Kurmuk and Geissan in Blue Nile.[62]
Mid-2026The SAF breaks an RSF encirclement of El Obeid.[10]
23 September 2026First joint Quad–Quintet meeting in New York. No agreement announced.[19]

2. Where things stand now

As of October 2026, Sudan is split roughly along a north–south line. The Conversation reported in December 2025 that the SAF held a little over half of the country. This included Khartoum, Port Sudan on the Red Sea and most of the border with Egypt. The RSF held most of Darfur, most oil fields and many goldfields.[14] A September 2026 analysis describes the same pattern. The SAF controls much of the north, centre and east, and the RSF holds large areas in the west.[20]

Khartoum. The army retook the Republican Palace on 21 March 2025, nearly two years into the war.[12] IOM, the UN migration agency, links the recapture of Khartoum, Sennar and Al Jazirah to large-scale returns. By June 2026 more than 2.1 million people had returned to Khartoum.[25]

El Fasher. The RSF took El Fasher, capital of North Darfur, on 26 October 2025, ending an 18-month siege.[11] Death toll reports from the first days differ by source. The SAF said about 2,000 people were killed. The Sudan Doctors Network said at least 1,500.[11] AFP later reported that more than 6,000 people were reportedly killed in the first three days, and that the UN said the attack bore “the hallmarks of genocide”.[24] By 21 December 2025, IOM had counted 107,294 people who had fled El Fasher and nearby villages.[13]

Kordofan and Blue Nile. The front line has moved east into Kordofan. El Obeid, with about half a million residents, links army-held central Sudan with RSF-held Darfur. It hosts an air base, a key oil pipeline and a major gum arabic market.[24] In June 2026 RSF drones struck the city’s fuel stations and storage for days, and Sudan Tribune’s military sources reported RSF reinforcements massing around it.[60][61] ACLED, a conflict-monitoring group, reported in August 2026 that SAF offensives had broken an RSF encirclement of the city.[10] In September 2026 the army described a new counter-offensive as its largest in the area in months.[21] RSF drone strikes on El Obeid continued, and at least six civilians were wounded on 9 October 2026.[22] In Blue Nile, near Ethiopia, the RSF and allied SPLM-N fighters said they seized two army bases in August 2026. Reuters could not verify the claim.[23]

Talks. No truce has been agreed by both sides. The Quad roadmap of 12 September 2025 proposed a three-month humanitarian truce, then a ceasefire, then a political process.[18] The RSF said it accepted the plan. Burhan rejected the proposals, saying they would let the RSF keep the territory it had seized.[15] In February 2026, US adviser Massad Boulos said the Quad had reached a peace document acceptable to both parties. In the same month the UAE pledged $500 million to a UN humanitarian fund.[18] On 23 September 2026 the Quad and the “Quintet” (a second group of mediators) met jointly in New York for the first time. They called for a truce but announced no agreement and set no date for talks. Asharq Al-Awsat reports that the main sticking point is RSF withdrawal from the cities it holds. The army demands the RSF leave all of them.[19]

Human cost. Estimates of deaths vary widely. ACLED estimated 27,000 civilians killed by October 2025.[13] The UN gave an overall estimate of about 40,000 deaths.[11] The Conversation reported more than 150,000 people killed.[14]

3. The economy before the war

Sudan entered the war already in deep trouble. IMF data show real GDP shrinking in 2018 (−2.3%), 2019 (−2.5%), 2020 (−3.6%) and 2022 (−2.5%), with growth of only 0.5% in 2021.[1] In 2022 the economy was worth about $33.5 billion, or about $717 per person.[1]

Inflation was very high. The IMF puts average inflation at 163.3% in 2020, 359.1% in 2021 and 138.8% in 2022.[1] The Central Bureau of Statistics (CBS) recorded a peak annual rate of 422% in July 2021.[41] Before the war, energy subsidies alone cost more than the government’s entire budget revenue, according to the World Bank.[2] Sudan also had more than $60 billion of foreign debts in arrears. Arrears are payments that are overdue.[2]

Agriculture was the backbone of the economy. In 2023 it made up about 35% of GDP and 40% of employment.[2] Gold had become the main export. In 2022 it made up 46.3% of non-oil exports, worth $2.02 billion.[54] Government revenue was about 10% of GDP in 2022, which is very low by international standards. Unemployment was 32%, and 33% of people lived in extreme poverty (under $2.15 a day).[2]

4. The economic impact: indicator by indicator

4.1 Output and GDP

The war caused a very deep collapse in output. The two main international sources agree on the scale but not the timing:

  • The IMF’s October 2026 World Economic Outlook estimates real GDP growth of −23.5% in 2023, −19.3% in 2024 and 0% in 2025. It projects +7% in 2026.[1]
  • The World Bank’s Sudan Economic Update (May 2025) estimates −29.4% in 2023 and −13.5% in 2024.[2] Its country page later revised 2024 to −14% and estimated a rebound of 3.1% in 2025. It credits the rebound to a low base and to people returning to central and northern states.[3]

On the IMF figures, the economy in 2025 was only about 62% of its 2022 size. A recovery of 7% in 2026 would still leave output about a third below its pre-war level.[1] Services were hit hardest. The World Bank estimates services output fell 43.2% in 2023, industry 25.8% and agriculture 14.9%.[2] Night-time light in Khartoum, which economists use to track activity where data are missing, fell by nearly 64% between April and December 2023 compared with before the conflict.[2]

Real GDP growth, 2019–2027 (% change)
IMF (Oct 2026 WEO)World Bank (May 2025)
-30-20-1001020%201920202021202220232024202520262027
Source: IMF World Economic Outlook, October 2026; World Bank Sudan Economic Update 2025 [1][2][3] IMF 2025 is an estimate and 2026–27 are projections. World Bank 2025–27 are projections that assumed peace during 2025; the World Bank later estimated 2025 growth at 3.1%.
Size of the real economy, 2022–2027 (2022 = 100) (index)
60708090100Index20222023202420252026202710076.561.761.766.176
Source: author's calculation from IMF World Economic Outlook, October 2026 [1] Calculated by the author from IMF real GDP growth rates. 2025 is an estimate; 2026–27 are projections.
Common mistakeA return to positive growth does not mean the economy has recovered. After a 40% fall, growth of 7% a year takes about five years just to get back to the old level. Always compare the level of output with the pre-war level, not only the growth rate.

4.2 Inflation and the Sudanese pound

Inflation is the rate at which the general price level rises. Sudan’s inflation surged again after the war began. The IMF estimates average inflation of 66.6% in 2023, 176.9% in 2024 and 99.9% in 2025.[1] The World Bank puts 2024 inflation at 170%.[2]

Monthly CBS data then show a long fall. Annual inflation was 173.3% in March 2025 and 156.3% in April 2025.[39][40] It fell to 78.4% in July 2025, which the bureau called the first double-digit reading in years.[41] It rose briefly to 81% in August, then eased to 74% in November.[42][44] It reached 68% in December 2025, 60.3% in January 2026 and 44.5% in May 2026.[45][47] This trend reversed briefly in April 2026, when inflation rose to 45.8%. The bureau blamed the depreciation of the pound.[46] These numbers come with gaps. The bureau has had to estimate prices for North and Central Darfur because insecurity stopped data collection there.[43] Food and drink make up 52.9% of the household spending basket, so food price rises hit households hard.[39]

Annual consumer price inflation, March 2025–May 2026 (% year-on-year)
050100150200%Mar 25Apr 25Jul 25Aug 25Sep 25Oct 25Nov 25Dec 25Jan 26Apr 26May 26173.3156.378.48183.577.4746860.345.844.5
Source: Central Bureau of Statistics, as reported by Sudan Tribune [39]–[47] Months without a published figure in the sources used are omitted. North and Central Darfur prices are estimated by the bureau.
Average annual inflation, 2019–2027 (%)
0100200300400%20192020202120222023202420252026202751163.3359.1138.866.6176.999.941.350.9
Source: IMF World Economic Outlook, October 2026 [1] 2025 is an estimate; 2026–27 are projections.

The currency. Sudan has several exchange rates at once: an official bank rate, a “customs” rate used to calculate import duties, and a parallel market rate, the price of dollars on the street. In December 2024 the World Bank put the official rate at 1,994 pounds per dollar and the parallel rate at 2,550.[2] The pound then fell much further in 2026:

  • Late June 2026: the street rate swung between 5,300 and 5,800 in one day after news that the central bank was supplying dollars to banks.[32]
  • Early August 2026: past 6,000 per dollar. The customs dollar rate was raised from 3,740 to 3,960.[34]
  • Late August 2026: the central bank let commercial banks set their own rates as part of a “managed float”. The pound hit a record low of 6,400, and 6,500 a few days later.[35][36] A managed float means the market mostly sets the rate, but the central bank can step in.
  • Mid-September 2026: 8,400 per dollar on the street, against 4,200 at Bank of Khartoum and 3,750 at Omdurman National Bank.[31] The pound recovered to 7,300 by 20 September.[38]

Dabanga, a Sudanese news outlet, links part of the slide to the government buying dollars on the parallel market to pay for weapons, military equipment and fuel. It also quotes an economist who says exports are now only about a third of imports.[31] Traders warned in September 2026 that the pound could reach 10,000 without action.[37]

Sudanese pounds per US dollar, April 2023–September 2026 (SDG per USD)
Parallel marketOfficial / bank rate
02,0004,0006,0008,00010,000SDGApr 23Dec 24Mar 2523 Jun 268 Jul 264 Aug 2627 Aug 265 Sep 2617 Sep 2620 Sep 26
Source: World Bank; Dabanga; Sudan Tribune [2][31][32][33][34][35][37][38] Points are dated quotes, not monthly averages, and the spacing is uneven. September bank rates are Bank of Khartoum quotes.

4.3 Public finances and debt

Government revenue collapsed. On World Bank figures it fell from 10% of GDP in 2022 to 4.8% in 2023 and 4.7% in 2024. The budget deficit widened from 1.7% to 4.1% of GDP.[2] Its later country page says revenue stayed below 5% of GDP in 2024–25.[3] The IMF’s October 2026 data show a fiscal deficit of 3.5% of GDP in 2024 and a projected 3.9% in 2026.[1]

Debt figures are very uncertain, and the sources disagree. The World Bank estimated public debt at 183.6% of GDP in 2022, falling to 147.4% in 2024.[2] The IMF puts gross government debt at 189% in 2022, 282.3% in 2024 and a projected 334.4% in 2026.[1] The difference largely comes from how a falling currency and a shrinking economy are treated. Foreign debt in dollars becomes much larger when measured in pounds, while nominal GDP in pounds is pushed up by inflation. Sudan’s external debt reached $66.8 billion in late 2023. The central bank estimates the principal (excluding interest) at $33 billion.[57] In April 2026 the government said it wanted to restore its partnership with the World Bank for reconstruction and debt relief.[57]

Government revenue and fiscal balance, 2022–2025 (% of GDP)
RevenueFiscal balance
-5-2.502.557.510% of GDP2022202320242025104.84.75.6-1.7-3.8-4.1-3.7
Source: World Bank Sudan Economic Update 2025 [2] 2025 values are World Bank projections made in May 2025.

4.4 Trade and key sectors: gold, oil and farming

Gold. Gold has become Sudan’s main source of foreign currency, and both sides draw money from it. The state-owned Sudanese Mineral Resources Company (SMRC) reported output of 64 tonnes in 2024, up from 41.8 tonnes in 2022.[49] It reported about 70 tonnes in 2025, the highest in five years.[52] These official figures exclude mines in areas held by the RSF and other armed groups.[50] Artisanal (small-scale, informal) mining employs about two million people and produces most of the gold.[50]

Most gold does not pass through official channels. The central bank recorded 2025 exports of 14.7 tonnes, earning $1.536 billion. Gold made up more than 58% of total exports.[53] Technical estimates cited by Sudan Tribune suggest 48–60% of production is smuggled.[53] The Sudan Gold Exporters Association says production is worth over $6 billion a year, against official exports of no more than $2 billion.[54]

Policy has been unstable. On 15 September 2025 the central bank banned private gold exports. It reversed the ban in November 2025, letting companies export again at international prices.[51] In 2026 the government set up dedicated courts for gold smuggling and barred military and paramilitary forces from mining areas. The minerals minister said official exports in six months had matched the whole of 2025.[55] The RSF also earns from gold. According to AFP, former engineers estimate that Al-Junaid, a company linked to the RSF, earns at least $1 billion a year in wartime.[48]

Gold: reported production and official exports (tonnes)
Reported productionOfficial exports
020406080Tonnes20222024202541.8647014.7
Source: Sudanese Mineral Resources Company; Central Bank of Sudan, via Sudan Tribune [49][52][53] Production figures are from the state-owned SMRC and exclude RSF-held areas. Official export tonnage for 2022 and 2024 was not available in the sources used.

Oil and the pipeline. Sudan’s own oil output has been small since 2011.[2] But Sudan is still important for oil because South Sudan’s crude passes through Sudan’s pipeline system to be exported. This earns revenue for Juba (South Sudan’s capital) and foreign currency for Sudan’s rival authorities.[20] The World Bank says the war damaged pipelines and oil facilities.[2] South Sudan has paid a heavy price. In March 2025 the World Bank said disruption to its oil production was costing about $7 million a day in lost export revenue. It projected a 30% fall in South Sudan’s GDP in 2024/25.[58] On 8 December 2025 the RSF claimed the Heglig oil field, and China began withdrawing from Sudan’s oil sector. On 11 December, South Sudanese forces moved into Heglig under a three-way deal to neutralise the area.[13] Reports of an oil revenue split between the RSF and the government have not been confirmed in detail.[20]

Agriculture. Farming has suffered from fighting, displacement, looting and high input costs. FAO estimated 2023 cereal output at about 4.1 million tonnes, 46% below 2022.[8] The 2025 harvest was about 5.2 million tonnes, 22% below 2024 and 19% below the five-year average.[7] Sudan needs about 2.8 million tonnes of cereal imports in 2026, mostly wheat, and FAO doubts it can pay for them.[7] Prices are rising fast. Between January and August 2026 sorghum prices more than doubled in most monitored markets, and diesel almost doubled between March and August.[7] In 2026 drought added to the damage. FAO data show severe drought on up to 70% of cultivated land in El Gedaref, a key grain state.[9]

Cereal production (sorghum, millet, wheat) (million tonnes)
02468Million t2023202420254.16.75.2
Source: FAO, via Sudan Tribune; FAO GIEWS [7][8] 2024 is derived by the author from FAO's statement that 2025 output was 22% below 2024.

4.5 Labour market

Jobs vanished as factories, shops and offices closed. The World Bank estimates unemployment rose from 32% in 2022 to 46% in 2023 and 47% in 2024. The share of workers in full-time wage jobs fell from 33% to 16%.[2] The IMF’s figures are higher: 49.4% in 2023, 60.2% in 2024 and 61.2% in 2025.[1] Artisanal gold mining alone employs about two million people.[50]

Unemployment rate, 2019–2026 (% of labour force)
IMFWorld Bank
020406080%20192020202120222023202420252026
Source: IMF World Economic Outlook, October 2026; World Bank Sudan Economic Update 2025 [1][2] IMF 2025 is an estimate and 2026 a projection. The two sources use different estimates.

4.6 Poverty, famine and human capital

Poverty. The World Bank’s 2025 report estimates extreme poverty rose from 33% in 2022 to 59% in 2023 and 71% in 2024.[2][5] Its country pages give different numbers: 23% in 2022 rising to 59% in 2024, and 48% in 2023 rising to 59% in 2025.[3][4] The baselines differ, but every series shows poverty at least doubling. The UN estimates that nearly 7 million people were pushed into extreme poverty in 2023 alone.[57]

Famine. The Integrated Food Security Phase Classification (IPC) is a five-phase scale for food crises, from Phase 1 (minimal) to Phase 5 (famine or catastrophe). A Famine Review Committee (FRC) of independent experts checks whether famine thresholds have been passed. On 4 November 2025 the FRC confirmed that famine thresholds for food consumption, acute malnutrition and deaths had been passed in El Fasher and Kadugli. Screening found acute malnutrition rates of 38–75% in El Fasher and 29% in Kadugli. Twenty more areas in Darfur and Kordofan were at risk of famine.[6]

The same analysis found 21.2 million people (45% of the population) in Phase 3 or worse in September 2025. That was 3.4 million fewer than in the previous analysis, because hunger eased where fighting had stopped.[6] FAO reports a projection of 19.5 million people in Phase 3 or worse for February–May 2026. Of these, about 5 million were in Phase 4 (emergency) and 135,000 in Phase 5 (catastrophe). Fourteen areas were at risk of famine under a worst-case scenario.[7]

People in IPC Phase 3 (crisis) or worse (million people)
0510152025MillionDec 24–May 25Sep 25Oct 25–Jan 26Feb–May 2624.621.219.319.5
Source: IPC via FAO, UNICEF and WFP; FAO GIEWS [6][7] Dec 2024–May 2025 is derived from the IPC statement that September 2025 was 3.4 million lower. Later periods are projections.

Human capital. Human capital means the skills, knowledge and health of the workforce. The health system has been badly damaged. In the hardest-hit areas, 70–80% of health facilities were barely working or closed, according to the World Bank.[2] The Sudan Doctors Network reported 234 medical workers killed by December 2025.[13] UNICEF warned of rising cholera, malaria and measles, and said girls risk being pulled out of school.[6]

4.7 Displacement and refugees

The war has caused displacement on a huge scale. IOM counted a peak of 11,585,384 internally displaced people (IDPs) in January 2025. By June 2026 this had fallen 24% to 8,805,506, as 4,441,570 people returned home.[25] Most returnees went to Khartoum (2.1 million) and Al Jazirah (1.2 million). Of returning families, 60% found their homes damaged.[25] Darfur still hosts 64% of IDPs. Tawila in North Darfur alone shelters about 707,000 people.[25] IOM expects more than 2 million further returns to Khartoum in 2026, but warns that water, power, health facilities and housing there are heavily damaged.[26]

More than 4 million people have crossed into neighbouring countries.[26] UNHCR’s February 2026 appeal counted about 4.3 million Sudanese refugees in the region, mostly in Egypt and eastern Chad. Egypt hosted about 1.4 million.[27] Chad had received 938,127 Sudanese refugees by 26 July 2026.[28] South Sudan is also a major destination.[14] These flows put pressure on some of the poorest host economies in the world. UNHCR says funding per refugee has fallen from $11 to $4 a month.[27]

Displacement from Sudan's war (million people)
024681012MillionIDPs, Jan 2025 peakIDPs, Jun 2026Returnees, Jun 2026Refugees in region, Feb 202611.68.84.44.3
Source: IOM DTM via Sudan Tribune; UNHCR via Dabanga [25][27] Returnees include 775,741 people who came back from abroad.

4.8 Humanitarian funding gaps

Aid has not kept pace with need. Data from OCHA’s Financial Tracking Service show the following:[29]

UN plan for SudanRequirement ($ bn)Funding received ($ bn)Share funded
20232.571.3251%
20242.701.8970%
20254.161.6740%
2026 (to mid-October)2.871.2443%

The 2026 plan asked for less money than the 2025 plan. Even so, it was only 14% funded in early March 2026.[30] In December 2025, WFP warned of drastic ration cuts in 2026.[13] Access is a second problem. The government’s Humanitarian Aid Commission and the RSF’s parallel bodies issue competing permits, which delays aid convoys.[20]

UN humanitarian plans for Sudan: needed vs received (US$ billion)
RequirementFunding received
012345$ bn20232024202520262.62.74.22.91.31.91.71.2
Source: OCHA Financial Tracking Service [29] 2026 funding as of mid-October 2026.

4.9 External actors and their economic interests

Many foreign states have economic and strategic stakes in Sudan. Several of the claims below are allegations made by one party and are not settled facts. They are given with their sources.

  • United Arab Emirates. In 2024 the UAE bought 99% of Sudan’s official gold exports. Its share fell to 56% in 2025, while Egypt’s imports rose twenty-fold, according to central bank data reported by Bloomberg.[56] Sudan’s government accuses the UAE of giving military aid to the RSF.[14] The government has objected to the UAE’s place in the Quad for this reason.[18] In January 2025 the US sanctioned seven UAE-based companies for funding Hemedti.[14] The UAE sits in the Quad, which called for an end to all external support to the warring parties, and it pledged $500 million to a UN humanitarian fund.[16][18] These accusations have not been tested in any court.
  • Saudi Arabia has led mediation through the Jeddah process.[17] The army-backed government said in October 2025 that Saudi Arabia planned $50 billion of extra investment, on top of $35 billion already invested.[14] Prime Minister Kamil Idris proposed a $100 billion investment package to Saudi Arabia.[13]
  • Egypt has supplied warplanes and pilots to the SAF, according to The Conversation. It hosts the largest number of Sudanese refugees.[14][27]
  • Iran is believed to have supplied attack drones to the SAF. Russia has given the government diplomatic and military support.[14] The Wall Street Journal reported in December 2025 that Sudan had offered Russia a naval base.[13]
  • China began withdrawing from Sudan’s oil sector after the RSF claimed Heglig.[13] Amnesty International says weapons from China, Russia, Turkey and the UAE have reached both sides despite a UN arms embargo.[14]
  • South Sudan depends on the Sudanese pipeline for its oil exports and so has a direct interest in keeping it working.[20][58]

A UN panel reported that a network of up to 50 companies linked to the RSF’s gold wealth helped it buy weapons.[48] Burhan has accused unnamed states of backing the RSF.[59] The US has sanctioned individuals from both parties.[16]

5. What went well and what went wrong

What went well (economic-policy perspective)

  • Inflation fell from 173% in March 2025 to about 45% by May 2026, though it remains high.[39][47]
  • Where fighting stopped, hunger eased. The number of people in crisis-level hunger fell by 3.4 million between analyses.[6]
  • Returns to Khartoum and Al Jazirah restarted some economic activity. The World Bank linked the 2025 rebound partly to these returns.[3][25]
  • The World Bank kept some aid flowing by working through UN agencies and NGOs instead of the government, including $182 million for health and safety nets approved in January 2025.[3]
  • A wheat project reached more than 170,000 smallholder farmers. Some saw yields rise by up to 70%, and the 2024 summer harvest met more than a fifth of national wheat needs.[2]
  • Tighter controls on gold in 2026 brought more output into formal channels.[55]

What went wrong

  • Most gold, Sudan’s main source of foreign exchange, still leaves the country unofficially. Estimates of smuggling run to 48–60% of output.[53]
  • Gold export policy changed back and forth. A ban on private exports was imposed in September 2025 and reversed in November.[51]
  • Multiple exchange rates persisted. The World Bank says they act as hidden taxes and subsidies on gold, imports and remittances.[2] The customs rate was raised twice in less than a month in mid-2026.[33]
  • Government purchases of dollars on the street to pay for weapons and fuel reportedly added to the pound’s fall.[31]
  • Revenue below 5% of GDP left the state unable to fund basic services.[3]
  • Local tolls and “security fees” charged by local governments and armed groups raised the cost of moving goods.[2]
  • Sieges cut cities off from food, and famine followed in El Fasher and Kadugli.[6]
  • Aid funding fell to about 40% of needs in 2025.[29]

6. The economics behind it

The production possibility curve shifts inward. A production possibility curve (PPC) shows the most an economy can produce with its resources. War destroys capital (factories, power stations, irrigation), kills and displaces workers, and blocks trade routes. All of these shrink the economy’s productive capacity. On the IMF’s figures, Sudan’s output fell by about 38% between 2022 and 2025.[1]

DiagramDraw a PPC with “military goods” on the vertical axis and “civilian goods (food, services)” on the horizontal axis. Draw the pre-war curve, PPC1. Draw a second curve, PPC2, well inside it to show destroyed capital and lost labour. Mark point A on PPC1, with mostly civilian goods. Mark point B on PPC2, higher up and to the left. Point B shows that the economy is smaller and that a larger share of what remains goes to fighting. The move from A to B shows the opportunity cost of war: the civilian output given up.

A negative supply shock and stagflation. In the AD/AS (aggregate demand/aggregate supply) model, the war is mainly a large negative supply shock. The short-run aggregate supply curve shifts left because production costs rise and output is disrupted. Fuel is one example: diesel prices almost doubled in five months in 2026.[7] The result is stagflation, meaning falling output and rising prices at the same time. Sudan’s economy shrank by 19.3% in 2024 while average inflation was 176.9%.[1]

DiagramDraw AD and SRAS crossing at price level P1 and real output Y1. Shift SRAS left to SRAS2 (lost capacity, higher import and transport costs). Also shift LRAS left, because some capital has been permanently destroyed. The new equilibrium has a higher price level P2 and lower output Y2. If the government funds its deficit by creating money, AD shifts right in nominal terms and pushes prices higher still.

Exchange-rate pass-through. Sudan imports much of its wheat and fuel, so a weaker pound quickly raises domestic prices. This is called exchange-rate pass-through. The CBS directly blamed the pound’s fall for the rise in inflation in April 2026.[46]

War finance and the “war economy”. Governments at war pay through taxes, borrowing, foreign help or printing money. With revenue under 5% of GDP and no access to new international lending, Sudan’s options are narrow.[3][57] Easy-to-loot resources like alluvial gold can pay for both sides’ war efforts. They also create incentives to keep control of territory, which can make peace harder to reach. Economist Kholood Khair described the fight for El Obeid as being “about power, land and money”.[24]

Famine as a market failure, not only a food shortage. Famine can happen even when food exists somewhere in a country. It happens when people lose the income or access they need to obtain food. In Sudan, sieges blocked supply, jobs disappeared and prices soared. Food costs in El Obeid rose by up to 300% in mid-2026.[24] Hunger eased where fighting stopped, which shows that conflict, not only crop failure, drives the crisis.[6]

Exam tipWhen you analyse a war economy, separate demand-side effects (lower incomes, lost confidence) from supply-side effects (destroyed capital, displaced labour, blocked trade). For Sudan, the supply side dominates. That explains why output and prices moved in opposite directions.

7. Outlook and the way forward

Growth projections. The IMF projects growth of 7% in 2026 and 15% in 2027.[1] The World Bank’s 2025 scenarios suggest that even if fighting stops, GDP would return to pre-war levels only by 2031 with strong reforms and debt relief, and by 2038 without them.[2]

Reconstruction costs. This chapter did not find a full, published damage and needs assessment for Sudan in the sources it used. The World Bank’s 2025 report gives physical indicators instead of a single dollar total.[2] Any headline reconstruction figure should be treated with care until such an assessment is published.

Three scenarios.

  • Truce and stabilisation. A humanitarian truce of the kind the Quad has proposed would let aid and trade move and farmers plant.[18] Recovery would then depend on reform. The World Bank calls for completing the HIPC (Heavily Indebted Poor Countries) debt-relief process, unifying the exchange rate, phasing out energy subsidies with help for poor households, reducing military influence over state firms and reforming land rights.[2]
  • Frozen front lines. If the country stays divided, two economies could take shape: an army-held east and centre built on gold, Port Sudan and returns to Khartoum, and an RSF-held west built on its own resources. Analysts warn that freezing current lines could make fragmentation permanent.[20]
  • Escalation. If fighting spreads to Kordofan and Blue Nile, more famine and displacement are likely. Aid agencies have warned that conditions in El Obeid could come to resemble El Fasher’s.[24]

Key risks. These include a weak 2026 harvest due to drought, a cereal import bill of about 2.8 million tonnes that Sudan may not be able to pay, a further fall in the pound toward 10,000 per dollar, and continued gaps in aid funding.[7][9][37][29] There is also a risk for South Sudan, whose public finances depend on oil passing through Sudan.[20][58]

8. Exam-style questions

MediumQ1. Using a PPC diagram, explain how the war in Sudan affected the country’s productive capacity. Show answer guide
Draw an inward shift of the PPC. Explain the causes: destroyed capital (health facilities, power, irrigation), lost labour (death, displacement of up to 11.6 million people), and disrupted trade. Show that remaining output was diverted towards military use. Use data: IMF real GDP −23.5% (2023) and −19.3% (2024). Distinguish between a movement inside the PPC (unused resources) and an inward shift (resources destroyed).
MediumQ2. Explain why Sudan experienced falling output and high inflation at the same time in 2024. Show answer guide
Use the AD/AS model. The war was a negative supply shock: SRAS and LRAS shifted left. Explain cost-push factors such as fuel, transport and imported food, and exchange-rate pass-through from the falling pound. Mention deficit financing as a possible demand-side factor. Data: GDP −19.3% and inflation 176.9% in 2024 (IMF). Define stagflation.
MediumQ3. Sudan produced about 70 tonnes of gold in 2025 but officially exported only 14.7 tonnes. Analyse the economic consequences of this gap. Show answer guide
Lost foreign exchange means fewer dollars for wheat and fuel imports, so the pound weakens and inflation rises. The state also loses tax revenue. Armed groups can use gold to fund themselves. Discuss the incentive to smuggle when the official exchange rate is below the street rate (an implicit tax). Evaluate the policy responses: the export ban and its reversal, the central bank buying at international prices, and dedicated smuggling courts.
ExamQ4. Evaluate the view that ending the fighting is a necessary and sufficient condition for Sudan’s economic recovery. Show answer guide
Necessary: hunger eased where fighting stopped, returns revived activity in Khartoum and Al Jazirah, and trade and farming need security. Not sufficient: the World Bank projects recovery to pre-war output only by 2031 even with reforms, and 2038 without them. Pre-war problems remain, including 359% inflation in 2021, debt arrears above $60 billion, energy subsidies larger than revenue and multiple exchange rates. Institutions, debt relief (HIPC), exchange-rate unification and human-capital rebuilding all matter. Consider external finance and the risk of a divided country. Reach a judgement: peace is necessary but not sufficient, and the order of reforms matters.

Glossary

  • Arrears: debt payments that are overdue and unpaid.
  • Artisanal mining: small-scale, often informal mining using simple tools.
  • Exchange-rate pass-through: the extent to which a change in the exchange rate changes domestic prices.
  • Famine Review Committee (FRC): independent experts who check whether IPC famine thresholds have been met.
  • HIPC: Heavily Indebted Poor Countries initiative, an international debt-relief programme.
  • Human capital: the skills, knowledge and health of the workforce.
  • Internally displaced person (IDP): someone forced from home who remains inside their own country.
  • IPC: Integrated Food Security Phase Classification, a five-phase scale of food insecurity, where Phase 5 is famine or catastrophe.
  • Managed float: an exchange-rate system where the market mostly sets the rate but the central bank can intervene.
  • Parallel market: an unofficial market where currency trades at a rate different from the official rate.
  • Production possibility curve (PPC): a curve showing the maximum combinations of goods an economy can produce with its resources.
  • Stagflation: falling or stagnant output combined with high inflation.

References

  1. International Monetary Fund (2026). “World Economic Outlook, October 2026: Sudan (real GDP growth, inflation, unemployment, gross debt, fiscal balance, GDP)”. IMF DataMapper, accessed 14 October 2026. https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/SDN
  2. World Bank (2025). “Sudan Economic Update 2025: The Economic and Social Consequences of the Conflict: Charting a Path to Recovery”. World Bank, May 2025. https://documents1.worldbank.org/curated/en/099051925180542315/text/P178527-6a7d4d70-52be-49b7-87e5-ead89050a99b.txt
  3. World Bank (2026). “Sudan: Overview”. World Bank country page, accessed 14 October 2026. https://www.worldbank.org/en/where-we-work/sudan
  4. World Bank (2025). “Sudan: Country strategy”. World Bank country page, accessed 14 October 2026. https://www.worldbank.org/ext/en/country/sudan/fragments/strategy
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  6. FAO, UNICEF and WFP / United Nations in Sudan (2025). “Famine conditions confirmed in Sudan’s El Fasher and Kadugli, hunger and malnutrition ease where conflict subsides”. UN Sudan, 4 November 2025. https://sudan.un.org/en/305234-famine-conditions-confirmed-sudans-el-fasher-and-kadugli-hunger-and-malnutrition-ease-where
  7. FAO GIEWS (2026). “Country Brief: Sudan”. FAO Global Information and Early Warning System, 24 September 2026. https://cb.apps.fao.org/country.jsp?code=SDN
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