How successive conflicts have bankrupted the 'land of gold'

These estimates correspond to the Sudan Humanitarian Needs Overview 2023, where the number amounts to 15.8 million, an increase of 1.5 million people compared to 2022, the highest rate recorded in Sudan since 2011.

According to the report, some 4 million children under the age of five and pregnant and lactating women — a quarter of those in need of assistance in 2023 — will suffer from life-threatening malnutrition.

And although Sudan had made significant progress in basic education in the decade leading to 2018 — adding about 3,000 schools to the education sector which allowed an additional 1 million children to access education according to UNICEF estimates — 7 million children in Sudan remain out of school.

Timid growth followed by downturn

Before the outbreak of fighting between the two generals, the International Monetary Fund predicted that Sudan would register weak economic growth, in the range of 1.2% in 2023, due to wars and the catastrophic effects of climate change.

The economy grew by 0.5% in 2021 after Sudan was partially exempted of its debt, only to shrink again by about 2.5% in 2022 after the military coup that seized power in October 2021. These rates are among the weakest in the Arab region and the African continent.

A recent report by Columbia University's Center on Global Energy Policy in April 2023, revealed that the 2011 secession of South Sudan — which retained three-quarters of Sudan's oil reserves — cut Sudan's national revenues by 50% curbing its ability to pay its foreign debt by two thirds and shrinking its economy by 10%.

Sudan suffers from a weak financial and banking system, where, according to experts, 90% of the country's money supply lies outside its banking system. The Central Bank of Sudan has also seen a significant decline in foreign exchange reserves, after the suspension of international aid of billions of dollars to the transitional government, especially from the United States, following the coup. 

Inflation and currency devaluation

The devaluation of the Sudanese pound has spiralled since the secession, from less than 40 pounds to the dollar before 2011, rising to 450 pounds under the transitional government in 2021, where it stabilised for a few months.

The currency continued to decline after the military coup, losing about 40% of its value five months after the coup. 

Despite the measures taken by the military-led authorities — notably the formation of an economic emergency committee in March 2022 and its decision to float the pound, granting commercial banks the power to determine the exchange rate on a daily basis, as well as arresting dozens of traders active in currency trading on the black market — these steps have failed to curb the devaluation of the Sudanese pound, which stands at about 570 pounds per dollar at the moment.

In turn, inflation in the country hit record rates, as prices rose by more than 359% in 2021, according to the International Monetary Fund, which is one of the highest rates in the world. This means that the IMF's optimistic expectations that inflation will decline to about 139% in 2022, and to about 71.6% in 2023, are now threatened by the conflict. 

Wasted natural resources

Sudan's gold is known for its fine quality, in addition to its concentration rate, which is among the highest in the world. Sudan is one of the most prominent producers of the yellow metal in Africa, producing 90 to 120 tons per year, according to statistics by the Sudanese Ministry of Minerals.

Read more: In Sudan, he who has the gold makes the rules

It was ranked among the top 15 gold-producing countries in the world in 2022, and the third in Africa, preceded by Ghana and South Africa and followed by Mali and Burkina Faso.

It would have been the first in Africa had it not been for the secession of South Sudan, which almost equals it in production.

Sudan's gold reserves amount to 1,550 tons, and its exports accounted for 46% of the total exports of 4.36 billion dollars in 2022, according to figures from the Central Bank of Sudan, which is equivalent to 34.5 tons of gold and valued at $2 billion.

Yet, Sudan, beset by successive wars and crises, has been unable to benefit from this wealth, with organised smuggling operations controlling a high percentage of production, which can amount to 80%, according to Reuters, dealing a heavy blow to the state budget.

The British newspaper "The Telegraph" describes the Kremlin as the biggest foreign player in the country's huge mining sector, albeit by illegal means, as Moscow has managed to smuggle hundreds of tons of gold from Sudan over the past few years.

The setbacks of secession... and oil losses

The secession of South Sudan led to several economic setbacks, the first of which was the loss of 75% of Sudan's oil reserves to South Sudan, according to the US Energy Information Administration, and thus the loss of oil revenues, which accounted for more than half of the Sudanese government's revenues and 95% of the country's exports.

However, the sector plays a vital role and is closely linked to the two countries, with the vast majority of oil-producing assets stretching across their common border.

Since the secession, oil production in Sudan and South Sudan has declined due to the lack of political stability in the two countries, as the value of Sudan's crude oil exports did not exceed $317 million in 2020, according to estimates by the US International Trade Administration, due to the modest production of its oil fields at 59,000 barrels per day.

Sudan's oil refinery has the capacity to refine 90,000 to 95,000 barrels per day. The Sudanese government also receives an in-kind royalty payment of 14,000 bpd from the government of South Sudan for oil pipeline transit rights to Port Sudan.

Sudan offered eight oil blocks in the latest licensing round, in an attempt to stimulate exploration and production development in the country. The licensing was expected to begin this year, but all of this will be postponed in light of the ongoing conflict.

Wasted natural resources

Sudan was endowed with a natural wealth of 11 rivers and about 180 million acres of very fertile agrarian land. Furthermore, Sudan enjoys an advanced agricultural status, hence the nickname: The food basket of the Arab world — and even the world.

However, this wealth is threatened by drought and climate conditions, in addition to the misuse of agricultural and water resources. This fertile environment along with its natural and human resources, where farmers make up 38% of the active population, would have attracted hundreds of billions of dollars had it not been for the country's decades-long security and political crises. 

At present, Saudi Arabia ranks first with cumulative investments of about $36 billion in Sudan, spread over several sectors, most notably the agricultural sector, which is one of the most attractive sectors for Arab investment. It is followed by the UAE and Kuwait both investing $7 billion each. Egypt is also another prominent investor.

Political instability and successive conflicts, military coups and civil wars have made it nearly impossible for Sudan to reap the benefits of its abundant natural, animal and mineral resources.

The cost of Sudan's collective conflicts is estimated at a whopping $500 billion. This doesn't factor in the human losses, which drove the country of acclaimed Sudanese novelist Tayyeb Saleh and  poet Muhammad al-Fayturi — the country of gold and fertile soil — to bankruptcy.

Read more: Words of Sudan's great writers still echo over conflict

The sad part is that it is Sudan's very own military that is pushing the country toward war which is set to inflict massive human and economic losses and push it further down the path of waste, futility and decline.