Sudan

The stage for prolonged internal armed conflict

On 15 April 2023, a confrontation erupted between Abdel Fattah al-Burhan, head of the Sudanese Armed Forces (SAF) and the ruling junta, and Mohamed Hamdan Dogolo, known as Hemedti, the regime's number two at the head of the paramilitary Rapid Support Forces (RSF). These two generals – formerly allies – worked to unseat Omar al-Bashir from power during the popular protests of 2019 and later in the coup d'état of 2021, which ousted civilians from the government in charge of the transition. Nevertheless, growing tensions, fuelled by disagreements over the integration of the RSF into the SAF (Hemedti wanted to retain his independence and control over economic activities), have sparked conflict over who will control the state. The fighting is mainly taking place in the south-west of the country, particularly in Darfur (El Fasher) and Kordofan, where ethnic atrocities are being committed. The capital, Khartoum, and the nearby fertile regions of the south-east (Al Jazirah and Sinnar), are also at the heart of the violence. In January 2025, the RSF controlled most of southern and western Sudan, while the SAF took up positions in the rest of the country. The SAF has made Port Sudan on the Red Sea their centre of operations, from where they control most of the aid flows and from where the Central Bank of Sudan has withdrawn. The population, which both factions are trying to win over, is bearing the full brunt of the fallout from the conflict: violence, high living costs, malnutrition and epidemics (cholera, measles, dengue fever) have led to the deaths of more than 60,000 civilians, as at mid-November 2024. Public infrastructure, crops and homes have been damaged by the fighting, as well as by the floods in the summer of 2024, while international aid, which is insufficient, is struggling to get through. As a result, half the population is suffering acutely from food insecurity and five regions are affected by famine, according to the UN. Twelve million Sudanese have already been displaced, including three million who have fled the country to Chad, Egypt, South Sudan, Ethiopia or the Central African Republic.

Sudan’s neighbours, which are suffering the fallout from the conflict (insecurity, migratory flows, disruption of trade routes), are indirectly involved by supplying arms or logistical support to one or even both camps. Egypt, at the forefront, has close military ties with General Burhan and his SAF (by supplying equipment) and diplomatic ties (joint opposition to the agreement on sharing the waters of the Nile and support for the Egyptian position on the Ethiopian Renaissance dam). In July 2024, Burhan renewed ties with Iran, putting an end to the diplomatic freeze dating back to 2016 following an attack on the Saudi embassy in Tehran, and is also drawing closer to Russia. Both countries covet Sudan's strategic position on the Red Sea and its mineral reserves. The United Arab Emirates, for its part, has been accused of supplying arms to Hemedti to preserve their close ties; between 2016 and 2017, the general sent mercenaries to support the Arab coalition in Yemen. Furthermore, the gold extracted from Darfur mines by the RSF is sold on the Dubai market. However, this does not prevent the SAF from also trading through the Emirates (gold, cattle, etc.). SAF paramilitaries are also trying to increase their influence with African neighbours who facilitate arms supplies, such as Chad and Libya, the latter being controlled by Marshal Haftar and, further afield, Uganda and Kenya. In January 2025, the US, which until then had been overseeing the negotiations alongside a neutral Saudi Arabia, accused the RSF of genocide and imposed sanctions on General Hemedti without, however, supporting the SAF. The same month, it was Turkey's turn to propose itself as a broker of the peace talks.

Economic activity dependent on how the conflict pans out

After two years of sharp contraction, the economic trajectory will depend on how the conflict evolves in 2025. If the situation calms down, Sudan will be able to count on reconstruction, which will be extremely costly and laborious, especially if the country is partitioned. For the moment, activity is based on agriculture and livestock farming, despite the destruction in the main fertile regions (Al Jazirah) caused by the fighting and by flooding in the summer of 2024, as well as on gold mining. Industry and services (business, wholesale and retail), which were concentrated in Khartoum state, which is the epicentre of the fighting, have been shaken by the extreme insecurity and will find it difficult to recover. The fighting has destroyed equipment and infrastructure (transport, buildings, pipes), hampering production and the movement of goods across the country. The conflict has prompted the warring parties to switch to alternative trade routes: the ports on the Red Sea for the Armed Forces and the roads through Chad and Libya for the RSF. Extreme poverty is on the increase and will affect 64% of the population in 2025, thereby preventing a recovery in private consumption amid a hyper-inflationary context. The collapse of the currency as a result of the monetisation of the deficit, the extreme weakness of foreign exchange reserves, and the disruption of supply chains explain the surge in prices. In addition, crop damage and the fire at the Al-Jaili refinery in Khartoum are complicating agricultural and oil production, as well as pushing up food and fuel prices. With the virtual disappearance of state institutions, monetary policy will be ineffective or even non-existent. Public investment will be almost non-existent, as will FDI.

The appropriation of meagre revenues by warring parties

The collapse of state institutions and economic activity eroded public revenue and expenditure In 2023 and 2024; budgetary headroom is expected to remain virtually non-existent in 2025. The meagre official revenues will go mainly to the military. Each of the warring parties is trying to control its own territory, its own administration and its own budget. The FSR, which controls the west and the south, is trying to conquer the centre with Khartoum in order to take over the institutions, and earns money from the gold trade. SAF forces, established in the north and east, have the advantage of the ports and will collect the transit fees for South Sudanese oil. In the absence of appeasement, bilateral (Gulf States, China) and multilateral (an Extended Credit Facility expired in December 2022 and was not renewed by the IMF) budgetary support will remain blocked. Any progress on alleviating the heavy public debt will continue to be paralysed like the HIPC initiative, which has been suspended since the 2021 coup, thereby contributing to the accumulation of arrears and the unsustainability of the debt.

Low production, particularly in agriculture (cereals, livestock and cotton), will prevent a recovery in exports and a reduction in the trade deficit in 2025. The two camps will continue to fight for control of the gold sector, which provides half of declared export revenues, but nearly the double if the gold exported “under the table” by the two camps is included. If the situation calms down, the growth in imports brought about by reconstruction, a recovery in domestic demand and the shortfall in local production will outstrip export growth. Remittances from the diaspora and international aid are limited by the instability. Only the balance of services could improve thanks to the receipt of payments linked to South Sudanese transit rights. These will resume following the completion in October 2024 of repairs to the pipeline linking the DAR Petroleum Oil Company's oil fields to the Red Sea, which was facilitated by the SAF regaining control of most of its route. The force majeure imposed on South Sudanese crude oil exports was lifted.

Last updated:January 2025