Civil war drags on in Sudan, dragging the economy down with it

The world remains distracted by other conflicts and crisis, but with this large African country on the brink of famine and no end in sight to the fighting, there are warnings that Sudan could splinter

Reuters

A Sudanese family who fled conflict in Darfur sits next to their possessions while waiting to be registered at the crossing from Sudan to Chad on 26 July 2023.

Civil war drags on in Sudan, dragging the economy down with it

Sharif Mohammad

last update on 17 Apr 2024

Telal Mohamed, 41, is a Sudanese who lives in the Egyptian city of Giza and makes a living by exporting fertiliser back to his home country.

Since Sudan descended into a vicious internal war between two competing generals last April, Telal has lost around $42,200, or 2 million Egyptian pounds.

His fertiliser stock was damaged twice, first in the capital, Khartoum, then in Gezira in central Sudan, a rural part of the country where he hoped to find safety.

“Gezira is where I worked the most because it’s an agricultural area,” he says, recalling how he moved his goods to Ad-Damir in the northeast, hoping to avoid more losses.

Telal’s story is far from unique. Everyone can be hit by war, including entrepreneurs.

Economy tanks

Sudan’s economy was not in a good state even before the war, but when fighting broke out, conditions worsened.

Clashes between the regular Sudanese army and the Rapid Support Forces (RSF) paramilitary group that had been brought under the state’s umbrella continue unabated across much of the country.

It has displaced millions and taken a heavy toll on businesses of all sizes. Keeping commercial ventures afloat has been difficult.

Costs have soared, not least since transportation and storage have become more difficult. Now more than ever, combatants need to be paid off to ensure safe movement.

In 2023, the Sudanese economy fell by 40%. In February, Finance Minister Gibril Ibrahim said it would fall further this year, with losses in the tens of billions of dollars.

Impact on food

The obstructions of war have caused imports vital to agriculture to dry up, adding to the problems faced by the sector from lower rainfall and other effects of climate change.

According to the World Bank, more than half of Sudan’s 50 million population is employed in agriculture, the sector generating around one-third of the country’s gross domestic product (GDP) before the war.

A report last month from the United Nations Food and Agriculture Organisation (FAO) said “the availability of most agricultural inputs including seeds, fertilisers, herbicides, fuel and labour in 2023 was inadequate”.

Costs have soared, with transportation and storage becoming more difficult. Combatants need to be paid off to ensure safe movement.

If they were available, it said, they were only available "at prices substantially higher than in 2022".

Furthermore, agricultural machinery was "unavailable in adequate numbers across the country, especially in the areas directly affected by the conflict and, when available, the prices were very high".

Sudan's cereal production in 2023/24 of sorghum, millet, and wheat is estimated at around 4.1 million tonnes.

According to the FAO, this is a 46% year-on-year reduction and 41% below the five-year average.

In short, the impact of war on agriculture has taken Sudan to the brink of famine.

Chronology of chaos

President Omar al-Bashir's 30-year dictatorship, which ended in 2019, was known for its corruption and poor governance.

During that period, Sudan was sanctioned and politically isolated amid international disgust at killings in the Darfur region.

Meanwhile, the south seceded, becoming the independent state of South Sudan.

Abdalla Hamdok served as prime minister after al-Bashir was ousted in 2019. He initiated painful economic reforms, including reductions in fuel subsidies.

It was not enough. By 2021, the currency had collapsed, and hyperinflation set in, accelerating to 400% in 2021.

REUTERS/El Tayeb Siddig — The damaged Bank of Khartoum.

The Sudanese who dislodged al-Bashir in a show of public anger now had other worries.

Factional disputes and political chaos meant that Hamdok's transitional government quickly disintegrated.

Sudan's army chief, Abdel Fattah al-Burhan, stepped in, toppled Hamdok, and became de facto ruler in 2022.

Far from calming things down, his coup led to civil war with the RSF and worsened the economic conditions faced by Sudan.

State breakdown

The West imposed more sanctions and the US withheld assistance worth $700mn.

By 2022, Sudan's trade deficit reached nearly $6.7bn. In 2023, a full-blown civil war arrived.

In mid-April, straight after Eid al-Fitr, the RSF's leader, Mohamed Hamdan Dagalo, known as Hemedti, took up his paramilitary force to war against the regular army.

More than half of Sudan's 50 million population is employed in agriculture, which generated a third of the country's pre-war GDP.

Consumer price began spiralling, public institutions began failing, and infrastructure was destroyed. State revenue plunged 80% last year, according to the finance minister.

Sudan's export of oil is an important source of revenue for the country, but both the oil pipeline and the refinery were damaged by shelling. The pipeline remains shut.

The banking sector is barely functioning, likewise the healthcare sector, with diseases breaking out.

Education is minimal, with one in three Sudanese children no longer at school. In most areas, looting and smuggling is rife.

It is therefore hardly surprising that millions of people have left. The International Organisation for Migration (IOM) said that as of 21 March 2024, 6.5 million people had been displaced internally in Sudan since the fighting began.

The IOM's Displacement Tracking Matrix also estimated that more than two million Sudanese were now in neighbouring countries, mostly Chad (37%), South Sudan (31%) and Egypt (26%).

Getting there is dangerous and exorbitant. Fuel and other essentials are only available on the black market at astronomical prices beyond the reach of most people.

Forgotten conflict

Nobody is quite sure how many Sudanese have died since the fighting began a year ago.

The administrative meltdown has made estimates difficult, but the United Nations put the figure at 12,000 by the end of 2023.

To a large extent, Sudan's war has had far less international attention than others in Ukraine and Gaza, in part because these have wider reaching political and economic repercussions.

Global trade has been disrupted from attacks on shipping heading into the Red Sea, forcing merchant vessels to travel the much longer distance around Africa.

After Israel killed several senior Iranians in Damascus and Iran hit back with 300 drones and missiles, the situation may yet intensify.

There are other disputes in Africa that are getting more attention than the war in Sudan, according to author and researcher Mohamed Kheir Omer.

He says the volatile geopolitics in the Horn of Africa, including the recent acrimony between Somalia and Ethiopia, gets more attention from the West.

To diplomats, Addis Ababa's push to ease its landlocked status via a deal with breakaway Somaliland looks like more of a worry than Sudan's war.

Where next?

A global response to Sudan looks unlikely, especially in the short term. This means that the fighting is likely to continue, along with all its associated hardships.

Civilian rule remains the best hope for the economy, which badly needs revitalising.

However, this depends on "how long the war continues, the extent of destruction to the infrastructure, and international pledges to help rebuild Sudan", says Omer.

Efforts by the US, Saudi Arabia, and Egypt to broker a truce have been unsuccessful. Other countries are alleged to be involved.

A global response to Sudan looks unlikely, especially in the short term. This means that the fighting and hardship is likely to continue.

A leaked United Nations report said there was "credible" evidence that the United Arab Emirates had been arming the RSF, which the country vehemently denies.

Army chief al-Burhan clearly thinks it is, having expelled 15 UAE diplomats in December.

Furthermore, it has been widely reported that RSF leader Hemedti, who controls Darfur's Jebel Amer gold mines, moves the precious metal out of the country via the UAE's international markets.

Sudan is Africa's third largest producer of gold, so the sale of this lucrative export item will likely be financing the war.

For Omer, there are three ways that the war will end: an outright win for one side, a stalemate preceded by a peace agreement, or the withdrawal of foreign sponsorship for either the army or the RSF.

One of the best routes toward economic recovery in Sudan would be restoring civilian rule.

"If both sides agree to end the war and agree on a civilian transition, then a civilian government will be established," says Omer.

"But if one side wins, particularly the army, it will be a military junta running the government until elections. They can rule Sudan in civilian clothes or hand it over to the most organised party, which is the party of Omar al-Bashir.

"The RSF is unlikely to win the war and form a government in the whole of Sudan, with its poor human rights record," particularly in Darfur.

"If both remain in a state of deadlock for years, Sudan risks partition." That could make a bad situation worse.

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