September/2025

Sudan’s Deepening Economic Crisis: Causes, Consequences, and the Path Forward.

Sudan, a country rich in resources and history, faces one of the worst economic crises in its history. Years of political instability, armed conflicts, economic mismanagement, and external pressures have brought Sudan’s economy to the brink of collapse. As of 2024, Sudan is grappling with hyperinflation, currency collapse, shortages of essentials, mounting debt, and a devastating war. This article explores the major economic crises Sudan faces, their root causes, and the difficult road ahead.

1. Hyperinflation and the Collapse of the Sudanese Pound

One of the most severe issues Sudan faces is hyperinflation coupled with a currency in freefall.

Causes of Hyperinflation:

● Excessive money printing by the government to cover deficits.
● Loss of public confidence in the Sudanese pound (SDG).
● Dwindling foreign currency reserves due to reduced exports and foreign investment.

Consequences:

● Inflation soared beyond 300% between 2020 and 2021, remaining dangerously high through 2024.
● The exchange rate plummeted from 50 SDG per USD in 2019 to over 1,000 SDG/USD on the black market in 2024.
● Real wages have eroded, pushing millions into extreme poverty.
● Daily essentials, such as food, medicine, and fuel, have become unaffordable for many Sudanese.

2. Fuel and Food Shortages Plague the Nation

Sudan is facing chronic fuel and food shortages, exacerbated by both historical and recent events.

Causes:

● The loss of oil revenues after the secession of South Sudan in 2011, which deprived Sudan of significant export income.
● Mismanagement of subsidies and chronic shortages of foreign currency to import essential goods.
● The ongoing war since April 2023, disrupting agriculture, transport, and markets.

Consequences:

● Long queues for fuel, bread, and basic commodities have become common.
● Soaring prices of staples like wheat, sugar, and medicines.
● Humanitarian organizations, such as the World Food Programme (WFP), report that over 20 million Sudanese are facing acute food insecurity in 2024.

3. Sudan’s Crushing Debt Burden and International

Isolation Sudan is burdened by massive external debts, coupled with a history of international sanctions and isolation.

Causes:

● A towering external debt exceeding $60 billion.
● Decades of U.S. sanctions (1997-2017) and Sudan’s previous designation as a state sponsor of terrorism.
● Limited access to financial assistance from global institutions like the IMF and World Bank.

Consequences:

● Difficulty attracting foreign investment and restoring economic ties with the global community.
● Exclusion from the global financial system, further isolating Sudan from potential recovery tools.
● Ongoing conflicts and political instability have derailed debt relief negotiations, keeping Sudan economically stranded.

4. The 2023 Sudan War: A Catastrophic Blow to the

Economy The outbreak of the Sudan War in April 2023, pitting the Sudanese Armed Forces (SAF) against the Rapid Support Forces (RSF), has devastated the country’s already fragile economy.

Devastating Impacts of the War:

● Widespread destruction of infrastructure, including banks, factories, and farms.
● Massive displacement of over 10 million people, leading to a severe humanitarian crisis.
● The collapse of trade routes, with ports blocked and supply chains severed.
● The economy shrank sharply, with the IMF estimating an 18% contraction in Sudan’s GDP in 2023.
● The rise of a war economy, where militias like the RSF control lucrative sectors, including gold mining, while the SAF continues to print money to fund its operations.

5. Shrinking Foreign Exchange and Economic Lifelines

Sudan's ability to generate foreign exchange earnings has dramatically weakened.

Key Revenue Losses:

● Gold smuggling has surged, with significant amounts of Sudan’s gold exported illicitly, depriving the state of vital revenues.
● Agricultural exports, particularly Gum Arabic and sesame, have declined due to war and insecurity in farming regions.
● Remittances from abroad have dropped sharply, as many Sudanese migrants face barriers or have been forced to relocate due to conflicts.

Resulting Challenges:

● Persistent foreign currency shortages, making imports of essential goods nearly impossible.
● An ever-widening trade deficit, further straining the economy.
● Increased reliance on barter systems in areas where formal financial structures have collapsed.

6. Failed Economic Reforms and Blocked Pathways

Several attempts have been made to stabilize Sudan’s economy, but most have either failed or triggered social unrest.

Key Measures and Outcomes:

● The currency devaluation of 2021 aimed to align official and black market rates, but it only accelerated inflation.
● Partial removal of subsidies on fuel and other goods sparked mass protests, worsening political instability.
● Debt relief negotiations, initiated after the ousting of Omar al-Bashir in 2019, have been stalled due to the ongoing war.
● Humanitarian aid, though critical, has been insufficient due to logistical hurdles and conflict zones being inaccessible.

7. The Current Economic Situation in Sudan (2024)

Sudan’s economy is in complete disarray by 2024. The continuing war has paralyzed governance and economic management.

Current Realities:

● In many regions, the central bank is non-functional, and formal banking services are absent.
● The use of barter trade is increasing as the local currency loses its purchasing power. ● Warlords and armed groups dominate resource extraction, especially in the gold sector.
● Humanitarian organizations face mounting challenges in delivering aid to conflict-affected populations.
● The public sector is collapsing, leaving millions without access to education, healthcare, and basic services.

8. What Lies Ahead: Prospects and Solutions

Sudan’s economic collapse is deeply intertwined with its political and military turmoil. Without a comprehensive ceasefire and a pathway toward stable governance, economic recovery remains elusive.

Necessary Steps for Recovery:

● An immediate ceasefire to halt further destruction and displacement.
● Establishment of a credible transitional government to restore state institutions and financial governance.
● Reviving debt relief discussions with international creditors, contingent on political stability.
● Crackdown on illicit gold smuggling to ensure revenues benefit the national economy.
● Revitalization of agriculture and infrastructure, key sectors for food security and employment.
● Enhanced collaboration with international organizations to provide urgent humanitarian assistance and economic support.

Sudan stands at a critical crossroads. The country’s economic crises—marked by hyperinflation, shortages, debt, and war—are products of decades of political dysfunction, corruption, and conflict. Without peace and a legitimate political transition, Sudan risks descending further into state failure, with dire consequences for its citizens and regional stability. The global community must remain engaged, but ultimately, the responsibility for Sudan’s recovery lies with its leaders and people.

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