Public Disclosure Authorized

SUDAN
ECONOMIC
UPDATE
May 2025
Public Disclosure Authorized

Economic Policy
Eastern and Southern Africa Region
Public Disclosure Authorized
Public Disclosure Authorized

The Economic and Social Consequences of the Conflict:

Charting a Path to Recovery
© 2025 The World Bank
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Cover photo: Sudan Somoud – Enhancing Community Resilience Project, World Bank.
SUDAN
ECONOMIC
UPDATE
May 2025
Economic Policy
Eastern and Southern Africa Region

The Economic and Social Consequences of the Conflict:

Charting a Path to Recovery
SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Photo: Sudan Somoud – Enhancing Community Resilience Project, World Bank.

 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Acknowledgements
The Sudan Economic Update (SEU) is a World Bank report series that assesses key economic
developments, prospects, and policies in Sudan. The SEU is intended for a wide audience including policy
makers, business leaders, the community of analysts and professionals engaged in economic debate, and
the general public. The SEU reiterates the urgent need to end the recent conflict, facilitate reconstruction,
support the poorest groups, and leverage the potential of the agriculture sector for recovery. The SEU
was prepared under the overall guidance of Maryam Salim (Division Director), Yoichiro Ishihara (Country
Manager), Hassan Zaman (Regional Practice Director for Prosperity), Marco Hernandez (Practice
Manager) and Tehmina Khan (Program Leader and Lead Economist). The core team that produced
the SEU was Kamer Karakurum Ozdemir (Senior Economist, Task-Team Leader, TTL), Dalia Mohamed
Elfatih Zein (Consultant), and John Litwack (Consultant). The SEU draws on the draft background paper
“Realizing the Potential of Agriculture to Cope with Fragility, Manage Macroeconomic Instability, and
Support Growth” by Kene Ezemenari (Senior Economist), Fareed Hassan (Consultant) and Alzaki Alhelo
(Consultant), which was funded by Sudan Transition and Recovery Support Trust Fund (STARS TF)
and the background paper “Sudan Trade Diagnostic Update: Challenges and a Path to Recovery” by
Mike Nyawo (Economist), both prepared under the Country Economic Memorandum work program in
FY24. Valuable contributions were made by Cristina Savescu (Lead Economist). Nani Makonnen (Senior
Program Assistant) provided administrative and logistical support during the preparation of the report.
Angela Takats provided editorial support. The report was designed by Lucy Victoria Davis.
SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Photo: Sudan Somoud – Enhancing Community Resilience Project, World Bank.

 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Table of Contents
List of Acronyms, Figures, Tables and Boxes ....................................................................... 6

Executive Summary ............................................................................................................................ 9

Introduction ............................................................................................................................................ 15

Part 1: Recent Economic Developments and Medium-Term Outlook ...................... 21

1.1 The conflict causes a collapse in economic activity .................................................................................................... 22

1.2 Inflation shot up due to severe disruptions in key sectors .................................................................................... 23

1.3 Recent monetary and exchange rate reforms came under strain .................................................................... 24

1.4 Revenue collection collapsed ....................................................................................................................................................... 26

1.5 Imports and exports have contracted sharply ................................................................................................................ 27

1.6 Poverty has reached alarmingly high levels ....................................................................................................................... 28

Part 2: The Vital Role of Agriculture for Livelihoods and Food Security ............... 31

2.1 The agriculture sector continues to face significant challenges ........................................................................ 34

2.2 Agriculture can play a significant role post-conflict .................................................................................................. 36

2.3 Unlocking the sector’s potential is vital for strengthening communities ................................................... 37

Part 3: A Way Forward and Policy Options .......................................................................... 41

3.1 Post-conflict growth scenarios: Pathways to economic recovery .................................................................... 41

3.2 Key policy options for sustainable recovery and economic stability ............................................................. 42

3.2.1. Macroeconomic policies ............................................................................................................................................. 42

3.2.2. Structural reforms .......................................................................................................................................................... 44

3.2.3. Social and humanitarian policies ......................................................................................................................... 45

References ............................................................................................................................................... 49

Annexes ..................................................................................................................................................... 53

Annex 1: GDP projections in Sudan.................................................................................................................................................. 53

Annex 2: Estimating poverty rates in Sudan............................................................................................................................ 53

Annex 3: Map of Sudan............................................................................................................................................................................. 54

x

SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

List of Acronyms
AFDB African Development Bank
FAO Food and Agriculture Organization
GDP Gross Domestic Product
HIPC Heavily Indebted Poor Countries
IFPRI International Food Policy Research Institute
IMF International Monetary Fund
IPC Integrated Food Security Phase Classification
NGOs Non-Governmental Organizations
SDG Sudanese Pound
STARS TF Sudan Transition and Recovery Support Trust Fund
UNHCR United Nations High Commissioner for Refugees
UNICEF United Nations Children’s Fund
UNMAS United Nations Mine Action Service
USD United States Dollar
WFP World Food Program
WHO World Health Organization

List of Figures
Figure ES 1: Economic Growth ........................................................................................................................................................ 9
Figure ES 2: Inflation ............................................................................................................................................................................. 10
Figure ES 3: Unemployment ............................................................................................................................................................ 10
Figure ES 4: Poverty ............................................................................................................................................................................... 10

Figure 1: Change in Nighttime Lights, Post-War versus Pre-war ........................................................................... 15

Figure 2: Contribution to GDP Growth ...................................................................................................................................... 22
Figure 3: Inflation and Exchange Rate ...................................................................................................................................... 23
Figure 4: Exchange Rate Developments: Official vs. Parallel Rates (SDG vis-à-vis USD) ..................... 24
Figure 5: Fiscal Performance of the Central Government ........................................................................................... 26
Figure 6: External Sector Performance (Percent of GDP) ............................................................................................ 27
Figure 7: Poverty Rates and GDP per Capita ........................................................................................................................ 28
Figure 8: Growth in Employment in Agriculture Sector in Sudan .......................................................................... 31
Figure 9: Labor Productivity in the Agriculture Sector in Sudan ............................................................................. 32
Figure 10: The Share of Agriculture Sector in GDP in Sudan .................................................................................... 33
Figure 11: Agriculture Sector and Yields in Sudan (Tons) ............................................................................................. 33
Figure 12: Millet Yields in Top Producing African Countries ....................................................................................... 34
Figure 13: Sorghum Yields in Top Producing African Countries ............................................................................... 34
Figure 14: Recovery Scenarios of Real GDP in Sudan ..................................................................................................... 41

6
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

List of Tables
Table 1: Sudan’s Key Economic Indicators and Projections ........................................................................................ 21
Table 2: Current Account Balance ................................................................................................................................................. 27

List of Boxes
Box 1: Main Data Sources ................................................................................................................................................................... 18
Box 2: An Overview of the Central Bank of Sudan’s Banknote Replacement Operation ................... 25
Box 3: Delivering Humanitarian Aid and Food ..................................................................................................................... 29

7
SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Photo: Sudan Somoud – Enhancing Community Resilience Project, World Bank.

 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Executive Summary
The “Sudan Economic Update: The Economic and Social Consequences of the Conflict:
Charting a Path to Recovery” outlines the country’s macroeconomic developments and
challenges, as well as a range of policy recommendations to support post-conflict
recovery efforts. The special focus of the update is on the potential of agriculture to
bring long-term economic stability.

Almost two years into the conflict that Figure ES 1: Economic Growth
erupted in April 2023, Sudan remains trapped
in a deepening crisis with widespread social
and economic consequences. The conflict has
claimed more than 61,000 lives in Khartoum
state alone between April 2023 and June
2024, and has also caused the world’s largest
displacement, with 12.9 million people forcibly
displaced, including 8.9 million internally and 3.8
million seeking refuge in neighboring countries.
Sudan has the fourth highest prevalence of
global acute malnutrition, estimated at 13.6
percent, and is facing a public health crisis with
multiple disease outbreaks. Efforts to bring the
warring factions to the negotiation table have so
The exchange rate remained relatively stable
far made little progress.
until early 2023, supported by reforms that
unified the official and parallel market rates.
Real GDP is estimated to have contracted
However, since the onset of the latest conflict,
by approximately 29.4 percent in 2023,
a gap between the official exchange rate and
followed by an estimated 13.5 percent in
the parallel market rate has emerged. As
2024, underscoring the severe disruptions
of December 2024, the official exchange rate
to economic activity due to the conflict
depreciated by 233 percent compared to April
(Figure ES 1). Even if the conflict is resolved in
2023, reaching SDG 1,994/USD, while the parallel
the coming months and significant structural
exchange rate depreciated by 355 percent over
reforms are implemented, Sudan’s economy is
the same period, reaching SDG 2,550/USD.
unlikely to return to its pre-conflict GDP level
As of March 2025, the official exchange rate
before 2031.
stabilized around SDG 2,019 USD, compared to
a parallel market rate of around SDG 2,679/
USD following the reopening of key trade routes,
which facilitated the flow of goods and services
to local markets.

9
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Inflation soared to 170 percent (year-on-year) Sudan’s fiscal challenges have deepened,
in 2024 from 66 percent in 2023 (Figure ES 2). with government revenues as a share of GDP
This increase is primarily driven by the cost of declining from 10 percent in 2022 to below
housing, transportation, and food and beverages 5 percent in 2023. Public debt remains high,
amid sharp declines in production. leaving the country with essentially no capacity
to issue new debt. Sudan’s external position
deteriorated in 2023, driven by a conflict-
Figure ES 2: Inflation related decline in the trade balance. However, it
is projected to improve in the medium term, as
export capacity increases.

Poverty remains alarmingly high with the

proportion of the population living on less
than US$2.15 per day estimated to have
nearly doubled from 33 percent in 2022 to 71
percent in 2024 (Figure ES 4). Poverty levels
vary significantly across regions, with notably
higher incidences in the Red Sea, Kordofan, and
Darfur states. This regional disparity highlights
the uneven distribution of resources.

Figure ES 4: Poverty

The unemployment rate surged from 32 percent 71%

in 2022 to 47 percent in 2024 (Figure ES 3).
This increase is driven by widespread business 59%
closures, economic uncertainty, and a sharp POVERTY 33%
decline in stable job opportunities due to the
severe impact of the conflict on the labor market.
entrenched
2022 2023 2024
Figure ES 3: Unemployment

The weak institutions and lack of investment

in social services pose an ongoing challenge.
Sudan’s policy and institutional performance
indicators are below the Sub-Saharan African
average and have been declining. Institutional
weaknesses and inefficiencies in public sector
management continue to hinder progress.
Sudan’s education and healthcare systems are
in urgent need of support.

10
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

The presence of landmines poses severe risks of the labor force, the sector has experienced a
to civilian safety, humanitarian operations, decline in productivity due to disrupted trade
and economic recovery. Decades of civil war have routes, farmer displacement, destruction of
left large areas contaminated with landmines. agricultural infrastructure, lack of access to
Renewed instability and ongoing conflicts have financing, and climate change. Agriculture is
exacerbated the issue, with reports of new mine vital for the livelihood and food security of the
deployments in conflict-affected areas. Sudanese population and should be a central
pillar of post-conflict recovery for the country.
Meanwhile, the agriculture sector, which forms
the backbone of the economy, faces persistent
challenges. Contributing approximately 35
percent of GDP and employing over 40 percent

Recommendations: The path to recovery

Macroeconomic policies

The resumption of the Heavily Indebted Poor Countries (HIPC) initiative1 would provide Sudan with
essential debt relief, creating fiscal space to invest in productive sectors. Key HIPC triggers include
improving efficiency in the electricity sector, rationalizing the foreign trade regime, and developing an
effective public financial management framework which would enhance fiscal transparency and long-
term economic resilience. As Sudan successfully reached the HIPC Decision Point prior to the conflict,
the completion of the agreed HIPC triggers remains the key to unlocking needed debt relief.

Preventing excessive commodity subsidies is essential for Sudan’s post-conflict economic recovery
and long-term fiscal stability. A structured roadmap for cost recovery in the electricity sector is vital
for macroeconomic stability while allowing savings to be redirected toward infrastructure and social
services, ensuring that electricity remains affordable for the vulnerable population.

A unified exchange rate is crucial for enhancing economic stability and facilitating foreign trade recovery.
This reform reduces economic distortions, promotes transparency, and enhances foreign investor
confidence, encouraging financial flows through formal channels.

Structural reforms

Unlocking the agriculture sector’s potential is essential for economic recovery in post-conflict Sudan.
Policies that support the sector’s transition to commercialization and strengthen value addition can
boost farmers’ incomes, uplift rural communities, and contribute to long-term economic stability. This
includes the renewed enforcement of a unified economic space for the movement of goods, prioritization
of reconstructing key roads and infrastructure to expand agricultural markets, and strategic targeted
public programs for investment and support to farmers.

_______________________________________________
1
Sudan’s progress towards accessing this international debt relief initiative was interrupted by the 2021 military intervention.

11
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Prioritizing the reconstruction of critical infrastructure damaged by the conflict would help to
restore essential services and facilitate the return of the displaced population. This reconstruction
effort, particularly for key roads, buildings, and parts of the electricity grid, would also create a more
stable and conducive environment for investment, attracting both domestic and foreign investors to key
sectors that drive economic growth and sustainable development.

Shifting toward demilitarizing Sudan’s economy is essential for unlocking growth potential by
reallocating essential resources to social and productive sectors post-conflict. Additionally, enhanced
transparency and reduced military involvement would promote economic stability and foster a more
favorable environment for foreign investment.

Eliminating barriers to domestic and foreign trade is essential for economic recovery. Addressing
infrastructure damage to connectivity and reducing high import tariffs, including those resulting from a
manipulated customs exchange rate, will facilitate trade and attract investment. Honoring commitments
to the African Continental Free Trade Area and advancing tariff liberalization with member states will
further benefit the country.

Social and humanitarian policies

National reconciliation and inclusive governance are essential for rebuilding trust among Sudanese
communities. Truth and reconciliation commissions, inter community dialogues, and reintegration
programs should be prioritized to heal divisions.

Strengthening governance and institutions is critical for post-conflict recovery. Sudan should
prioritize building institutional capacity, upholding the rule of law, and ensuring inclusive decision-making
to foster a stable environment conducive to recovery. This includes both critical reforms for the central
government and building upon a needed peace agreement to develop an effective structure for state
and local administrations.

Investing in social services, particularly education and healthcare, is essential for rebuilding human
capital in Sudan. Efforts should focus on rebuilding schools and healthcare facilities, training educators
and medical professionals, and expanding access to essential services.

Addressing landmine issues is critical to restoring safe access to land and resources. This requires
systematic mapping and clearance of affected areas, strengthened partnerships with international
organizations, expanded mine risk education, as well as supporting survivors with rehabilitation programs.

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SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

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SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Photo: Sudan Somoud – Enhancing Community Resilience Project, World Bank.

 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Introduction
1. Almost two years into the conflict that began in April 2023, Sudan remains in a deepening crisis
with widespread social and economic consequences. The country is facing a severe humanitarian
crisis with the ongoing conflict claiming more than 61,000 lives in Khartoum state alone between April
2023 and June 2024.2 The conflict has led to the world’s largest displacement, with 12.9 million forcibly
displaced, including 8.9 million internally and 3.8 million in neighboring countries including Chad, Egypt
and South Sudan.3 Military operations have caused extensive damage to residential housing across
Sudan, particularly in Khartoum, and forced 31 percent of urban households to relocate to other states.4

2. Sudan is grappling with an escalating humanitarian crisis including worsening food insecurity
and heightened risks of widespread famine and malnutrition. Famine was first confirmed in August
2024 in Zamzam camp in North Darfur, Sudan’s largest camp for internally displaced persons, according
to the Integrated Food Security Phase Classification (IPC) system,5 and has since spread 10 areas.6
Sudan is now among the top four countries in the world with the highest prevalence of global acute
malnutrition, estimated at 13.6 percent of the population.7

3. At the same time, a public health crisis is unfolding with multiple disease outbreaks severely
impacting the most vulnerable populations. The health system has been severely affected by the
conflict. Cholera, dengue fever, and malaria are spreading rapidly, with an estimated 3.4 million children
under the age of five at high risk of epidemic diseases as of mid-September 2024.8 This crisis is primarily
driven by a significant decline in vaccination rates and the destruction of essential infrastructure,
including health, water, sanitation, and hygiene services due to the ongoing conflict. It is estimated
that 70 to 80 percent of health facilities in the areas hardest hit by the conflict – such as Al Jazirah,
Kordofan, Darfur, and Khartoum – are either barely operational or completely shut down.9

4. The economy has plunged into a Figure 1: Change in Nighttime Lights, Post-War versus Pre-war
crisis due to the conflict. Economic
activity contracted by an estimated
29.4 percent in 2023 and is estimated
to have declined by another 13.5
percent in 2024, after an estimated
1 percent decline in 2022. Extensive
damage to the services sector –
including healthcare, education,
telecommunications, and trade –
caused a significant supply shock, since
services activities are concentrated in
Khartoum, the area most affected by
conflict.

Source: Sudan Welfare Monitoring System, Findings from Survey Round One on
Displacement, Food Security, and Mental Health, The World Bank, 2024.

_______________________________________________
2
Relief Web (2024); The accurate estimation of total fatalities remains challenging due to limitations in reporting of deaths, disruptions in
communication channels, and limitations of methodological techniques.
3
UNHCR (2024a).
4
The International Food Policy Research Institute and the United Nations Development Program (2024).
5
IPC (2024).
6
https://www.wfp.org/emergencies/sudan-emergency
7
UNOCHA (2024).
8
https://www.unicef.org/sudan/press-releases/over-three-million-children-heighted-risk-cholera-and-other-deadly-diseases-sudan
9
WHO (2024). 15
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

This impact is evident in Khartoum’s night-time lights which dropped significantly, by nearly 64 percent in
April to December 2023, compared to the pre-conflict period of January to March 2023, highlighting the
severe disruption to infrastructure and economic activity.10 Furthermore, a significant reduction in private
and government consumption and investment due to the ongoing conflict has depressed economic activity.

5. The conflict has profoundly impacted the labor market, further exacerbating the persistently
high unemployment rate. The unemployment rate surged dramatically, rising from 32 percent in 2022
to 46 percent in 2023 and 47 percent in 2024.11 The most significant labor market shift has been the
collapse of full-time wage employment, which has plummeted from 33 percent before the conflict to
just 16 percent, reflecting widespread business closures, economic uncertainty, and a sharp decline
in stable job opportunities.12 The destruction of infrastructure, supply chain disruptions, and capital
flight have further constrained employment prospects, pushing many into informal or precarious work,
deepening economic hardship for millions across the country.

6. Based on the Sudan Economic Sentiment Survey13 conducted in September 2024 across three
northern and eastern states, employment conditions have deteriorated significantly since the
onset of the conflict. Nearly 68 percent of the respondents reported worsening job conditions compared
to the pre-war period, highlighting the sustained impact of the conflict on labor markets. Additionally,
almost 80 percent of the respondents described the current economic situation as worse than before
the war, citing rising prices and declining incomes.

7. The conflict afflicted agriculture, the country’s key employer and engine of growth, causing a sharp
decline in production, soaring food prices, and deteriorating food security. As the conflict spreads,
farmers were forced to abandon their lands, while widespread looting of food stocks and agricultural
equipment in Al Jazirah and Kordofan has further crippled the sector. Although agriculture had shown
greater resilience to the April 2023 conflict compared to other sectors, critical shortages of essential
supplies like seeds, fertilizers, and fuel – coupled with disrupted trade routes – have made it increasingly
difficult to produce and distribute food. Cereal production in 2023 is estimated to have been approximately
40 percent below the average of the previous five years, having declined by 46 percent compared to 2022.14

8. The presence of landmines remains a critical challenge in the post-conflict landscape, posing
severe risks to civilian safety, humanitarian operations, and economic recovery.15 Decades of civil
war, particularly in Kassala, South Kordofan, and Darfur states, have left large areas contaminated
with mines. Renewed instability and ongoing conflicts have exacerbated the issue, with reports of new
mine deployments by both warring parties. Key areas of Khartoum, including strategic sites like the Al-
Jaili refinery and military communication facilities, have been heavily mined, transforming these areas
into hazardous zones. This widespread contamination not only endangers civilians but also hinders
humanitarian efforts, delays the return of displaced communities, and obstructs the rebuilding of critical
infrastructure and livelihoods.16

_______________________________________________
10
World Bank, Sudan Welfare Monitoring System, Findings from Survey Round One on Displacement, Food Security, and Mental Health, 2024.
11
The International Monetary Fund, World Economic Outlook Database. Accessed on March 2025.
12
The International Food Policy Research Institute and the United Nations Development Program (2024).
13
The Sudan Sentiment Economic Survey was funded by STARS trust fund.
14
FAO (2024).
15
https://www.un.org/en/observances/mine-awareness-day/messages
16
https://www.unmas.org/en/programmes/sudan

16
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

9. The country was already facing significant challenges prior to the conflict in 2023 that have
greatly exacerbated the situation. Sudan’s policy and institutional performance indicators are
underperforming averages of Sub-Saharan Africa International Development Association countries
and have been declining, according to the World Bank’s Country Policy and Institutional Assessment.17
There are particular weaknesses in institutions and economic and public sector management. These
persistent challenges have historically undermined efforts to implement structural reforms, exacerbated
macroeconomic vulnerabilities, and deepened the country’s fragility. Key sectors essential for sustainable
development, such as agriculture, education, and health, had been poorly managed, hindering Sudan’s
path toward economic recovery and stability. Key sectors essential for sustainable development, such as
agriculture, education, and health, had been poorly managed, hindering Sudan’s path toward economic
recovery and stability.

10. Efforts to achieve peace by bringing the warring factions to the negotiation table have yet
to bear fruit, with hostilities and violence escalating in different areas of the country. High-level
peace talks held in Geneva in August 2024, co-hosted by Saudia Arabia and the United States, yielded
no tangible results. A previous attempt in Jeddah in May 2023 secured a ceasefire, but it was short lived,
highlighting the challenges of achieving sustainable peace.

11. The conflict poses considerable risks to regional stability, given the scale of displacement. The
growing number of refugees is placing significant humanitarian and economic strains on host countries,
increasing the risk of further destabilization in the region. Over 3 million people are already seeking
refuge in neighboring countries, prompting the United Nations High Commissioner for Refugees (UNHCR)
to warn that Sudan’s crisis is likely to escalate.18

12. Despite these enormous challenges, Sudan remains positioned to benefit greatly from a
resolution of the conflict and re-engagement with the international community. Prior to the 2021
military takeover and 2023 conflict, Sudan had been making progress toward receiving debt relief and
renewed access to international finance under the HIPC initiative on the basis of policy commitments
toward achieving sustained growth and poverty reduction. Much of the initial post-conflict growth
could come from agriculture, which has immediate implications for poverty reduction, and where Sudan
appears to already have some important comparative advantages. Economic reforms and policies
that are key to a successful recovery and subsequent growth include more transparent and effective
governance, preventing a revival of excessive commodity subsidies, maintaining a unified exchange rate,
and alleviating substantial barriers to both domestic and foreign trade.

13. The “Sudan Economic Update: The Economic and Social Consequences of the Conflict: Charting
a Path to Recovery” report is structured as follows: Part I covers the recent macroeconomic
developments; Part II focuses on the agriculture sector as a main vehicle for alleviating the impact of
the conflict and supporting recovery; and Part III concludes by discussing the way forward and offering
policy options to support post-conflict recovery efforts. Box 1 below summarizes how the enormous
current data challenges were managed for the SEU.

_______________________________________________
17
World Bank (2024b).
18
UNHCR (2024b).

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Box 1: Main Data Sources

The ongoing conflict has severely limited access to reliable and timely data, necessitating the incorporation
of diverse and unconventional sources in the macroeconomic analysis. This approach includes leveraging
historical trends, night-time lights analysis, satellite imagery, and regional comparators to supplement official
data sources. However, due to the inherent difficulties in accurately capturing economic and social dynamics in
conflict-affected environments, these data should be interpreted with caution. The following points outline the
primary data sources utilized in this SEU.

Monetary and exchange rate data are primarily sourced from the Central Bank of Sudan and the banking
sector, while inflation data is provided by the Central Bureau of Statistics. Fiscal data, including historical
data on government revenues and expenditures, comes from the Ministry of Finance and Economic Planning, while
public announcements by ministry officials are used to inform more recent fiscal estimates. Trade flow estimates
are informed by satellite-based data from the IMF Port-Watch.

Sector-specific insights are derived from organizations such as the Food and Agriculture Organization (FAO)
and the International Food Policy Research Institute (IFPRI), which provide agricultural production statistics.
Migration, displacement, and refugee data are sourced from the International Organization for Migration, while
various UN agencies, including UNHCR, WHO, and UNICEF, contribute data on food insecurity, malnutrition,
damages to hospitals and health facilities, and the impact of disease outbreaks on children.

18
SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

19
SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Sudan’s MultiDonor Trust Fund in action. Scene from Al Obaied Crop Market, North Kordofan Workers sorting Gum Arabic lots. Photo by Salahaldeen Nadir, World Bank.
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Part 1: Recent Economic

Developments and Medium-
Term Outlook
14. The economic, social, and humanitarian fallout from the ongoing conflict has been severe. The
economy contracted sharply, about 8.8 million people were internally displaced, and malnutrition and
risk of famine continued to rise. The conflict erupted in Khartoum – the financial and industrial center
of the country – before quickly spreading to other areas, and was characterized by widespread looting,
damage, and occupation of private residences and public institutions. The conflict caused the collapse of
local markets and damaged essential infrastructure, worsening what was already an extremely difficult
economic situation (Table 1).

Table 1: Sudan’s Key Economic Indicators and Projections. (Annual percent change unless indicated otherwise)

Key Economic Indicators 2022 2023 2024 2025 2026 2027

Real GDP Growth -1,0 -29,4 -13,5 5,0 9,3 4,1

Agriculture 1,0 -14,9 -7,6 4,7 8,5 4,4

Industry -0,7 -25,8 -13,1 2,0 7,5 3,7

Service -3,0 -43,2 -22,0 8,9 12,4 4,2

Inflation (Consumer Price Index) 164,2 65,8 170,0 89,4 33,1 20,0

Trade Balance (% of GDP) -2,2 -11,2 -9,0 -2,6 0,1 3,2

Current Account Balance (% of GDP) -6,0 -6,2 -12,0 -4,8 -1,5 3,6

Fiscal Balance (% of GDP) -1,7 -3,8 -4,1 -3,7 -3,7 -3,4

Revenues and Grants (% of GDP) 10,0 4,8 4,7 5,6 6,2 6,8

Expenditures (% of GDP) 11,7 8,6 8,8 9,3 9,9 10,2

Debt (% of GDP) 183,6 167,3 147,4 142,7 124,2 106,4

Source: Ministry of Finance and Economic Planning, Central Bank of Sudan, Central Bureau of Statistics, and World Bank Staff estimates.

21
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

1.1 The conflict caused a collapse in economic activity

If growth rates remain within the same subdued range as those observed in the pre-
conflict period, the recovery to pre-conflict real GDP will be prolonged, underscoring the
need for broad-based reforms to accelerate economic revival.

15. The conflict has significantly affected the economy, impacting all its sectors. As a result, real
GDP is estimated to have contracted by approximately 29 percent in 2023, with a further contraction of
13.5 percent in 2024 (Annex 1). On the supply side, this decline reflects major damage to infrastructure.
The contribution of the services sector to GDP is estimated to have contracted by 15.8 percent in 2023
and by 6.5 percent in 2024. The sector is
comprised primarily of health, education, Figure 2: Contribution to GDP Growth (Percent)
telecommunications, finance, and retail/
wholesale services that were concentrated
in Khartoum. The manufacturing sector has
also been severely impacted by infrastructure
damage, including destruction to factories
and disruptions to supply chains. Similarly,
in the oil sector, damage to pipelines and oil
facilities disrupted production and foreign
trade. Consequently, the contribution of
the industrial sector to GDP is estimated
to have contracted by 7.3 percent in 2023
and 3.9 percent in 2024 (Figure 2). On the
demand side, the loss of income and massive
Agriculture Industry Services Real GDP
displacement of population have led to a
substantial drop in private consumption and
Source: Central Bureau of Statistics and World Bank staff estimates.
investment.

16. Assuming a peaceful resolution to the conflict within 2025, growth is expected to turn positive
initially due to the positive economic benefits of the peace and the restoration of stability.
Specifically, economic growth of 5 percent is projected in 2025, followed by a stronger rebound to
9 percent in 2026, as the economic benefits of the peace are fully realized throughout the year. On
the demand side, economic growth will be driven by a rebound in private consumption and renewed
investment, following the resumption of business operations. A gradual recovery in exports is also
expected. Additionally, an increase in government spending is projected to further stimulate demand,
reinforcing the overall growth trajectory. On the production side, growth is projected to be driven by
a rebound in the services and agriculture sectors. The gradual recovery in the industrial sector is also
expected to contribute to growth, though at a slower pace given the severe infrastructure damage to the
sector. However, without reforms, growth is likely to revert to the pre-conflict subdued trajectory, limiting
the economy’s potential to achieve sustained and inclusive development. Part III lays out key features of
alternative long-term development scenarios building on this medium-term outlook.

22
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

1.2 Inflation shot up due to severe disruptions in key sectors

Sudan’s inflationary crisis intensified in 2024, with living costs skyrocketing due to
severe disruptions in key sectors of the economy.

17. A few years before the conflict, inflation was primarily driven by the Central Bank’s monetization
of the fiscal deficit that ultimately destabilized the economy and fueled high inflation rates. The
Central Bank printed money to finance government expenditures, most notably commodity subsidies
on and off budget. Supply shortages and trade disruptions caused by the COVID-19 pandemic added to
the inflationary pressures.

18. Inflation soared to 170 percent (year-on-year) in 2024 from 66 percent in 2023,19 primarily
driven by the rising costs of housing, transportation, and food and beverages according to the
Central Bureau of Statistics (Figure 3). The ongoing conflict has severely disrupted distribution
channels, restricting the transportation of
agricultural products and food to markets,
Figure 3: Inflation and Exchange Rate (Percent, year-on-year)
causing significant supply shortages. At the
same time, a sharp decline in production 400 600
due to insecurity, displacement, and lack 350
500
Exchange Rate,
of access to essential inputs has further 300
RHS
400
250
strained supply. As a result, the availability
200 300
of food, fuel, and other essential goods has
150
200
drastically decreased, driving prices higher, 100
making them increasingly unaffordable 50
100

for a growing number of households. In 0 0

2018 2019 2020 2021 2022 2023e 2024e
response to resource shortages following
the outbreak of conflict in April 2023, Source: Central Bureau of Statistics and World Bank staff estimates.
the authorities resorted to increasing
money supply, potentially due to deficit
monetization, thereby contributing to the
inflationary pressures.

19. Inflation is expected to remain in double digits. Although inflation is projected to decline in the next
few years – along with an end to the conflict, a decline in housing rents, and an alleviation of constraints
to transport – it is expected to remain in double digits due to monetization of persistent government
budget deficits. Inflation is projected to decline significantly from 89 percent in 2025 to 33 percent
in 2026. In the medium-term, beyond the projection period, restoring supply capacity and phasing out
monetization will support a disinflationary path. Maintaining excess liquidity in the struggling financial
sector will likely be another source of continuing pressure on money supply and inflation.

_______________________________________________
19
Central Bureau of Statistics (2025).

23
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

1.3 Recent monetary and exchange rate reforms came

under strain
The premium between the official and parallel market exchange rates widened following
the outbreak of the conflict.

20. Since the outbreak of the conflict in April 2023, the Central Bank has allowed to widen the gap
between the official exchange rate and the parallel market rate (Figure 4). As of December 2024,
the official exchange rate depreciated by 233 percent compared to April 2023, reaching SDG 1,994/USD,
while the parallel exchange rate depreciated by 355 percent over the same period reaching SDG 2,550/
USD. The sharp deterioration in both official and parallel market rates was driven primarily by increased
demand for foreign currency
in an increasingly unregulated Figure 4: Exchange Rate Developments: Official vs. Parallel Rates
exchange market, exacerbated (SDG vis-à-vis USD)

by foreign-currency shortages.
Demand for foreign exchange
rose significantly due to the
partial re-opening of Sudan’s
airspace in 2023, enabling the
resumption of commercial
flights from Port Sudan
airport, and the increased need
to import essential goods,
such as medicine, agricultural
inputs, and fuel, amid severe Source: The Central Bank of Sudan and World Bank staff estimates.
domestic shortages caused
by the conflict expansion. In
2024, the conflict spread to new regions, further intensifying pressures on the currency. As of March
2025, the official exchange rate stabilized around SDG 2,019/USD, compared to the parallel market rate
of SDG 2,679/USD, following the reopening of key trade routes, which facilitated the flow of goods and
services to local markets.

21. The administered customs exchange rate, a key tool for revenue mobilization employed by
the Ministry of Finance and Economic Planning, has been raised multiple times since the onset
of the conflict in April 2023. Sudan employs a separate exchange rate for the evaluation of foreign
trade transactions that functions entirely as an implicit tariff. As of December 2024, the custom rate
was increased by 161 percent compared to December 2023, reaching SDG 1,700/USD, while the official
exchange rate stood at SDG 1,994/USD. Import tariffs in Sudan, both explicit and implicit through the
customs exchange rate, remain among the highest in the region.

22. On monetary policy, the Central Bank reduced the legal reserve requirement in 2024 to 15
percent of the total amount of eligible deposits that banks hold in local and foreign currency –
down from 20 percent in 2023. It also capped daily cash withdrawals from commercial banks to SDG
3 million20 while increasing daily transfer limits through mobile banking applications to SDG 15 million 21
after restoring electronic systems to alleviate pressure on cash transactions in May 2024.

_______________________________________________
20
SDG 3 million is equivalent to US$1,480, calculated using an exchange rate of 2027.57 SDG per USD as of March 2025.
21
SDG 15 million is equivalent to US$7,398, calculated using an exchange rate of SDG 2027.57 per US$ as per March 2025.

24
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

23. Additionally, in July 2024, the Central Bank launched a joint financing portfolio, in collaboration
with commercial banks, with foreign exchange resources amounting to US$1 billion. Operating
under the direct supervision and oversight of the Central Bank, this mechanism aims to provide foreign
currency for importing strategic and essential goods identified by the Ministry of Trade and Supply, such
as petroleum products, in response to domestic production shortfalls and foreign exchange shortages.
Furthermore, the Central Bank announced that it will continue coordinating with regional and international
financial institutions to expand foreign exchange resources. This mechanism remains in operation, ensuring
a stable supply of foreign currencies to support the ongoing import of essential goods.

24. In November 2024, the Central Bank announced a comprehensive banknote replacement initiative
that involves introducing new 500 and 1,000 Sudanese pound denominations into circulation (Box 2).
As part of this process, individuals without existing bank accounts will have the opportunity to open
new accounts to facilitate the deposit of the old denominations. The governor of the Central Bank
stated that this process aims to address the adverse impacts of theft and looting that have affected
the banking sector since the onset of the conflict, which has led to the circulation of large amounts of
counterfeit currency.

Box 2: An Overview of the Central Bank of Sudan’s Banknote Replacement Operation

The Central Bank’s comprehensive banknote replacement initiative was implemented in late December 2024.
Initially it included seven states under the control of the Sudanese Armed Forces, including Red Sea, Kassala, Al
Qadarif, River Nile, Northern State, Blue Nile, and White Nile (Annex 3). This initiative excluded states that were
partially or fully controlled by the Rapid Support Forces. Sinnar State was later included after the Sudanese
Armed Forces regained control over the state. In an effort to promote cashless transactions, the Central Bank
directed the commercial banks to develop and activate their mobile banking applications, ensuring integration
with available interconnection payment gateways – such as a new electronic clearing service for banks which was
launched in December 2024 – to enable seamless transfers between customer accounts across different banks.
However, the replacement process was also combined with placing daily limits on cash withdrawals on both
individuals and corporates.

The daily limits on cash withdrawals, imposed alongside the replacement operation, have restricted the
amount of physical currency available to individuals and businesses, creating imbalances between the
demand for cash and supply by the Central Bank. As a result, these limits have caused cash shortages, affecting
access to basic services, and forced some individuals and businesses to exchange money in bank accounts for cash
at high commission rates. The cash shortage has also put pressure on households, businesses, and humanitarian
agencies, disrupting daily operations and aid delivery. These challenges not only hamper aid distribution and
economic activity but could also undermine public confidence in the financial system.

This shortage of cash is likely to have a temporary impact on inflation through demand suppression and
cash supply disruptions. In the short term, reduced cash availability could suppress demand, especially in cash-
reliant informal sectors, creating disinflationary pressures. However, potential disruptions to supply chains may
also lead to inflation in certain areas. Lessons from India’s 2016 demonetization experience suggest that these
effects are short-lived and depend on the effectiveness of digital infrastructure and liquidity management.22 In
the medium to long term, transitioning to digital payments and broader financial inclusion, a key policy objective
of Sudan’s currency replacement, can help stabilize inflation and promote macroeconomic stability.

_______________________________________________
22
Chodorow-Reich, et al. (2019).

25
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

1.4 Revenue collection collapsed

Sudan’s fiscal challenges have deepened due to a collapse in revenue collection as a
result of the conflict, with government revenues in 2024 dropping to 4.7 percent of
GDP compared to 10 percent in 2022.

25. The size of government finance has contracted sharply since 2023 due to an erosion of the tax
base and reduced government capacity to collect tax and non-tax revenues. Government revenues as
a share of GDP are estimated
to have fallen from 10 percent Figure 5: Fiscal Performance of the Central Government (Percent of GDP)
in 2022 to 4.8 percent in 2023,
and further to 4.7 percent
in 2024 (Figure 5). Business
shutdowns, the collapse of
government institutions,
challenges to enforcement,
and the massive displacement
of the population has reduced
the tax base – causing a sharp
decline in revenues. Most of the
revenue shortage is reflected
in much lower government Source: Ministry of Finance and Economic Planning and World Bank staff estimates.
spending, including substantial
cuts to salaries and current
transfers, although the fiscal deficit is still estimated to have increased from 1.7 percent of GDP in 2022
to 3.8 percent and 4.1 percent in 2023 and 2024 (Figure 5).

26. Public debt remains high, leaving the country with no capacity to issue new debt. Prior to
the October 2021 military coup, Sudan had been making progress toward receiving debt relief and
renewed access to international finance under the HIPC initiative, which was interrupted by the 2021
military intervention. Currently, the government is essentially unable to issue new public debt, leaving
monetization as the only option for financing deficits. Public debt is expected to remain high, with a rise
in expenditures to 9.9 percent of GDP, despite a projected uptick in revenues to 6.2 percent of GDP in
2026 due to ongoing fiscal challenges and the absence of debt relief under the HIPC initiative.

26
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

1.5 Imports and exports have contracted sharply

The conflict has led to a decline in production and disrupted the supply chain, reducing
export capacity, while the sharp drop in domestic demand lowered imports.

27. Sudan’s external position deteriorated in 2023, with exports declining to 9.4 percent of GDP
and imports rising to 20 percent, driven by a lower GDP and increased reliance on imports amid
disrupted domestic production, resulting in a trade deficit of 11.2 percent of GDP. Remittance
inflows helped narrow the overall current account deficit to 6.2 percent. However, in 2024, the current
account deficit is estimated to have widened to 12.0 percent of GDP due to a sharp drop in official
remittances, reflecting the growing divergence between official and parallel exchange rates.23 This was
partially offset by a recovery in exports, as the government regained control over mining areas, while
imports declined to 19.2 percent amid subdued domestic demand (Table 2).24

Table 2: Current Account Balance (Percent of GDP)

2022 2023 2024 2025 2026 2027

Current Account Balance -6,0 -6,2 -12,0 -4,8 -1,5 3,6

Trade Balance -2,2 -11,2 -9,0 -2,6 0,1 3,2

Exports 12,8 9,4 10,2 10,7 13,4 17,7

Imports 15,0 20,6 19,2 13,2 13,4 14,5

Primary and Secondary Incomes -3,8 5,0 -3,0 -2,2 -1,6 0,4

Source: Central Bank of Sudan, Central Bureau of Statistics, and World Bank Staff estimates.

28. The current account Figure 6: External Sector Performance (Percent of GDP)
deficit is projected to
narrow in the medium term,
primarily driven by a steady
recovery in exports and a
decline in imports. The trade
balance is projected to improve
as export capacity gradually
recovers, leading to higher
export earnings. By 2027,
the current account deficit is
projected to improve to 3.6
% of GDP, reflecting these
positive trends (Figure 6). Source: Ministry of Finance and Economic Planning, Central Bank of Sudan, and World Bank
staff estimates.

_______________________________________________
23
A higher inflow of informal remittances would not be visible in the current account data shown in Table 2 and would show up as positive “errors
and omissions” in the country’s balance of payments if the latter could be properly measured. In the current Sudanese context, the full balance of
payments picture is unclear as changes in foreign reserves in Sudan are not publicly available.
24
Primary incomes in the balance of payments represent cross-border income flows and are key to understanding international economic relations.
They include compensation of employees, investment income, and other primary income sources such as taxes on production, subsidies, and
rents on natural resources not classified elsewhere. Secondary incomes in the balance of payments reflect the redistribution of income without a
corresponding exchange of goods, services, or financial assets, and play a significant role in economic relationships between countries. They include
current transfers such as personal and government transfers, as well as other types of transfers like insurance premiums and claims, and various
miscellaneous transfers. 27
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

1.6 Poverty has reached alarmingly high levels

Extreme poverty – the share of the population living on less than US$2.15 per day – is
estimated to have nearly doubled from 33 percent in 2022 to 71 percent in 2024.25

29. This stark increase in poverty rates reflects the devastating effects of the conflict on
livelihoods, with widespread displacement, loss of income, and disrupted access to basic services
further entrenching poverty. Simultaneously, GDP per capita experienced a steep decline during the
same period, underscoring the broader
collapse (Figure 7). These trends reveal the Figure 7: Poverty Rates and GDP per Capita
deepening economic vulnerabilities and
hardship faced by Sudan’s population in
the face of the ongoing conflict-induced
instability (Annex 2).

30. Even prior to the conflict, households

faced severe shocks from the COVID-19
pandemic and the 2021 military takeover
which significantly reduced employment
and labor income, disproportionately
affecting women and rural communities.
Additionally, droughts, erratic rainfall,
and soaring prices have further strained
Sudanese households, forcing them to Source: Central Bureau of Statistics and World Bank staff estimates.

adopt detrimental coping strategies such

as reducing consumption and shifting from farming to nonfarm or wage-earning activities. Before the
current conflict, only 1 percent of households reported receiving social assistance, with international
organizations and Non-Governmental Organizations (NGOs) serving as the primary providers for
support.26 These programs were largely funded by external resources, which were later suspended,
significantly reducing their reach. As a result, social assistance – already limited before the conflict – has
become even scarcer, if not nonexistent, with major programs halted (Box 3).

_______________________________________________
25
World Bank (2024a).
26
World Bank (2023a).

28
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Box 3: Delivering Humanitarian Aid and Food

The United Nations and its affiliated organizations have encountered significant challenges in delivering food
assistance to Sudan’s conflict-affected regions since the eruption of the conflict in 2023. Ongoing violence
and military operations in these areas have severely limited access, creating substantial risks for aid workers
and disrupting logistical operations. Additionally, impassable roads brought on by the rainy season from June to
September, and the remote locations of many communities, further hinder the effective transportation of food
and humanitarian aid.

However, as of November 2024, the World Food Program (WFP) successfully delivered aid to Zamzam camp in
North Darfur state, where famine has already been confirmed since last August, for the first time following
months of restricted access. Additionally, WFP announced a surge in its operations across Sudan to provide
critical assistance to thousands of displaced people. This achievement followed the Sudanese Government’s
decision to designate six airports and seven land crossings to facilitate the delivery of humanitarian aid to
conflict-affected areas.27

In December, WFP’s efforts to reach populations in need were significantly delayed due to the challenging
operational environment, including liquidity shortages and sporadic Humanitarian Aid Commission approvals,
resulting in WFP reaching 2.1 million people. In 2024, WFP provided food assistance to 4 million people, cash-based
transfers to 2 million, and nutrition rations to another 2 million.28

Collaboration between local authorities and international organizations is crucial to overcoming the
challenges posed by the conflict and logistical obstacles, to ensure that aid and assistance reaches affected
populations. By working together, local governments can facilitate critical permissions and access routes, while
international organizations bring technical expertise, operational capacity, and global resources to address urgent
needs. Strengthened partnerships are essential not only for immediate relief efforts but also for building resilient
systems that can sustain long-term recovery and mitigate the impact of future crises.

_______________________________________________
27
https://www.wfp.org/news/wfp-announces-major-surge-food-aid-sudans-hard-reach-areas
28
WFP (2024).

29
SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Photo: Sudan Somoud – Enhancing Community Resilience Project, World Bank.

 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Part 2:
The Vital Role of Agriculture
for Livelihoods and Food
Security

32. Agriculture is the backbone of the economy, serving as a primary source of income for most of
the rural population, and contributing approximately 35 percent of GDP and 40 percent to total
employment in 2023.29 The sector is the main supplier of food and raw materials to the industrial
sector, playing a crucial role in generating foreign exchange, achieving food security, supporting livelihoods,
and reducing poverty, especially in rural areas. The share of agriculture increased from 9 to 31 percent
of Sudanese exports between
2012 and 2022, thus moving to Figure 8: Growth in Employment in Agriculture Sector in Sudan
comprise the majority of exports
from the country other than gold
(40 percent of all exports as of
2022). Approximately 88 percent
of cultivated land is allocated to
dryland farming, which accounts
for 75 percent of the country’s food
grain production and represents
the primary economic activity for
a considerable segment of the Source: WDI and World Bank staff estimates
population.30

33. Following the secession of South Sudan in 2011, Sudan experienced a sharp decline in
agricultural employment, largely driven by the repatriation of South Sudanese workers previously
employed in the sector. However, the sector witnessed a recovery in the following years, primarily
driven by labor adjustments and improved security and stability in certain states (Figure 8). Particularly,
the return of displaced households to their homes in Darfur stimulated agricultural activity, creating
additional employment opportunities and contributing to the sector’s overall growth.31

_______________________________________________
29
World Bank Development Indicators and World Bank staff estimates.
30
Siddig, et al. (2024)
31
FAO (2019).

31
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

34. Seasonal labor demand, driven by rainfall-dependent farming cycles, contributes to fluctuating
labor productivity in agriculture sector. Limited access to modern farming techniques, inadequate
infrastructure, and supply chain
disruptions further hinders consistent Figure 9: Labor Productivity in the Agriculture Sector in Sudan
labor productivity growth. Conflicts and
insecurity in key agriculture states such
as Darfur, and recently in Al Jazirah,
had led to frequent displacement of
the rural population, reduced workforce
availability, and instability in farming
cycles, all of which contribute to labor
productivity volatility (Figure 9). This
volatility poses significant risks, including
reduced food security, lower rural
incomes, and heightened vulnerability to
Note: Agricultural products include wheat, millet, sorghum, peanut, and cotton. Labor productivity
external shocks such as droughts and is calculated as the total production divided by employment in the agriculture sector.
economic downturns. Source: US Department of Agriculture, WDI, and World Bank staff estimates.

35. The diversity and market power of the agriculture sector can drive post-conflict recovery. The
agriculture sector is notably diverse compared to regional peers like Uganda, Zambia, and Zimbabwe
according to the latest data for the Herfindahl-Hirschman Index (2018). While some of these countries
rely more on specific crops, Sudan benefits from a broad mix of agricultural products, including gum
arabic, sesame, sorghum, cotton, and a well-integrated livestock sector. This diversity – coupled with
Sudan’s strong market power as a global price setter in gum arabic and sesame seeds, as well as
Sudan’s dominant position in regional trade for sheep and sheep meat – will enhance its economic
resilience once the conflict finishes. A recent analysis suggests that Sudan likely possesses genuine
comparative advantage for the export of several agricultural products, including seeds, nuts, gum arabic,
leather, and livestock.32 This combination of agricultural diversity and market influence provides a strong
foundation for post-conflict economic and social recovery, supporting employment, trade stability, and
sustainable growth. The key components of the sector include:

• Crop production: Sudan boasts a highly diversified crop portfolio, including essential and commercial
crops (e.g., sorghum, millet, wheat, rice, and maize) and oilseeds (e.g., sesame, groundnuts, and
sunflower). Commercial crops include cotton and sugarcane along with a variety of horticultural
crops including okra, onions, tomatoes, and citrus fruits.

• Livestock farming: Sudan has one of Africa’s largest livestock populations, including cattle, sheep,
goats, and camels. Livestock is raised in almost all parts of the country and animals are owned
primarily by nomadic tribes. The livestock subsector contributes about 12 percent of total GDP and
33 percent of agriculture GDP, serving as a critical livelihood component for the population.33

• Forestry: Sudan is notable for the production of several key products, including gum arabic, with
the country being one of the world’s largest producers and exporters of this valuable commodity.34

• Fisheries: Smaller in scale compared to other components of the agriculture sector, Sudan’s fisheries
contribute largely to local diets and livelihoods.35

_______________________________________________
32
World Bank (2020b).
33
International Food Policy Research Institute (2023).
34
World Bank (2020b).
35
ibid.

32
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

36. Agriculture has reemerged as a central pillar of the economy. The performance of the agriculture
sector began to decline following the large-scale production of oil in 1992. However, following South
Sudan’s secession in 2011 – which
resulted in the loss of three-quarters
Figure 10: The Share of Agriculture Sector in GDP in Sudan
of Sudan’s oil output and two-thirds
of its foreign exchange earnings –
the share of the agriculture sector
in GDP gradually increased over time
(Figure 10). The sector’s increasing
contribution to Sudan’s GDP in recent
years underscores a significant shift
in the country’s economic landscape,
highlighting both its resilience and
the growing fragility in the face of
persistent challenges. Part of the
growth in the relative importance
of agriculture reflects an increase
in land under cultivation, which
expanded by an estimated 220,000 Source: Central Bureau of Statistics and World Bank staff estimates.
square hectors between 1992–2020.

37. Despite its crucial role in the economy, the agriculture sector continues to underperform
relative to its potential, with productivity remaining highly volatile and subject to significant
fluctuations over the years. The
sector has followed a cyclical pattern Figure 11: Agriculture Sector and Yields in Sudan (Tons)
of growth and contraction, driven
by economic, environmental, and
policy-related challenges (Figure 11).
However, Sudan holds substantial
growth opportunities in agriculture,
supported by both underutilized
arable land and the potential for
improving yields. Currently, less than
23 percent of the country’s arable
land is cultivated, leaving vast areas
of fertile land untapped, highlighting Note: Agricultural products include wheat, millet, sorghum, peanut, and cotton.
Yield is calculated as the total production divided by cultivated area.
the need for strategic interventions
Source: US Department of Agriculture.
to unlock the sector’s full capacity.

38. Agricultural output fell significantly in 2023, with crop yields remaining below their historical
peak levels. National cereal production fell 46 percent below the previous year’s output and approximately
40 percent below the average of the preceding five years. Additionally, the average sorghum yield in
2023 is estimated to have declined by 30 percent compared to 2022 and is 17 percent lower than the
five years average (2018–2023). Similarly, the average millet yield has decreased by 54 percent from
2022 and 53 percent below the five-year average (2018–2022).36 This significant decrease in the crop
production was mainly due to the impact of the ongoing conflict on agriculture operations as well as the
limited availability and high prices of agriculture inputs. The erratic spatial and temporal distribution of
seasonal rains with prolonged dry spells contributed to the reduction in crops.37

_______________________________________________
36
FAO (2024).
37
ibid.
33
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

39. Sudan has recorded lower yields for sorghum and millet over the past decade compared to
its African counterparts, despite being among the world’s leading producers of both crops. These
trends indicate significant opportunities to enhance agricultural productivity by adopting successful
policies implemented in neighboring countries (Figure 12) and (Figure 13).

Figure 12: Millet Yields in Top Producing African Figure 13: Sorghum Yields in Top Producing
Countries African Countries

3000 3000

2500 2500
Yield, KG per Hectare

Yield, KG per Hectare

2000 2000

1500 1500

1000 1000

500 500

0 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Ethopia Nigeria Sudan Ethopia Nigeria Sudan

Source: FAOSTAT 2025. Source: FAOSTAT 2025.

2.1 The agriculture sector continues to face significant

challenges
While the agriculture sector holds considerable economic potential, persistent challenges
have constrained its growth, resulting in reduced sector productivity.

40. The agriculture sector has long faced a range of challenges as follows:

(i) Conflict and political instability: Historically, conflicts have displaced farmers and
significantly reduced productivity. In Darfur state, heightened ethnic tensions and intensified
competition for land between farmers and herders, often results in crop damage, blocked routes,
and violence that further disrupts agriculture production.38 The Al-Fashaga region, situated along
the border between Sudan and Ethiopia, has remained a contentious area despite multiple trade
and economic cooperation agreements between the two countries. Renowned for its production
of high-value white sesame, this territory serves as a vital economic resource for both countries.
However, violent conflicts in the region have severely disrupted the trade of essential commodities,
displaced thousands from productive farmlands, and resulted in the militarization of critical trade
routes further constraining productivity.39

_______________________________________________
38
OXFAM (2014).
39
Chatham House (2024).

34
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

In December 2023, conflict erupted in Al Jazirah state, which has historically been a cornerstone
of agricultural production due to its fertile lands and being home to one of the largest irrigation
schemes in the world.40 The outbreak of the violence forced farmers to flee their lands, abandoning
fields that had been cultivated by their families for generations. This displacement not only
shattered livelihoods but also undermined the state’s contribution to national food security. Cereal
production in 2023 was nearly halved, with the most severe declines observed in conflict affected
areas, including Kordofan and Darfur states where production fell to an estimated 80 percent
below average. Livestock production in these states has also been disrupted due to the intensified
Rapid Support Forces offensive.41

(ii) Barriers to the distribution of agricultural products and market access: Poor road
networks, limited transportation services, and deteriorating storage facilities significantly hinder
the efficient movement of agriculture goods from production areas to markets. In many rural
areas, seasonal flooding and unpaved roads further restrict farmers’ ability to transport their
produce, leading to high post-harvest losses. Additionally, internal conflicts exacerbate the
formidable infrastructural challenges in transporting agricultural products by disrupting trade
routes and destroying essential agriculture infrastructure – including irrigation systems, storage
facilities, and transportation networks – further limiting market access.42

(iii) Limited agriculture spending and lack of access to finance: The sector faces significant
funding constraints due to limited available resources, a situation further exacerbated by the
economic sanctions imposed on Sudan between 1997 and 2017, which had restricted foreign direct
investment, limiting access to international development finance.43 Moreover, the government has
historically accorded high priority to agriculture-related infrastructure, allocating more than 80
percent of total agriculture expenditure to this area. The remaining funds are largely absorbed by
irrigated agriculture, leaving other important sectors – such as rain-fed agriculture which accounts
for more than 80 percent of the sector – and research and agriculture sector support with
meager resources.44

(iv) Frequent climate shocks: Rising temperatures, declining rainfalls, flooding, and desertification
are significantly impacting the agriculture sector. Climate change poses a substantial threat for
rain-fed agriculture, which is predominant across the country, particularly in the western Darfur
and Kordofan states. Crop yields in these areas are especially vulnerable to erratic rainfall, which
reduces productivity. Notably, the 2023 rainy season was marked by erratic spatial and temporal
rainfall patterns. Western regions experienced above-average rainfall, leading to flash floods
between July and September, which caused localized crop losses.45

_______________________________________________
40
FAO (2024).
41
ibid.
42
Diao, et al. (2023)..
43
World Bank (2020b).
44
Ali Siddig and Hassan (2016).
45
FAO (2024).

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

2.2 Agriculture can play a significant role post-conflict

Investing in agriculture and resilience-building has the potential to drive economic
recovery and reduce poverty in the post-conflict period.

41. The agriculture sector has been less impacted by the conflict compared to the industrial and
services sectors. While urban centers like Khartoum – which hosts essential services such as education,
healthcare, and financial services – were heavily disrupted, agriculture, primarily located in rural areas,
was at least somewhat shielded from the immediate effects of the conflict. This relative resilience
stems from the decentralized nature of agriculture, as many farming communities are dispersed across
rural regions that are often far from the epicenters of conflict.

42. Since April 2023, income from agriculture has become increasingly essential for household survival.
With the conflict initially concentrated in Khartoum, economic activity and employment opportunities
in the capital were severely disrupted. In response, many households turned to agriculture as a key
source of income and food security, primarily cultivating subsistence crops to withstand the ongoing
instability in areas less affected by the conflict.

43. Lessons from other countries that have emerged from similar crises highlight the critical role
of agriculture in addressing economic shocks caused by conflicts and driving economic recovery.
Countries such as Mozambique and Rwanda have shown that agriculture can serve as a crucial catalyst
for economic revival, providing immediate livelihood opportunities while laying the groundwork for
sustained economic growth.

44. Rwanda adopted a strategy for post-1994 recovery that placed a high priority on measures
to ignite growth in agriculture. In the wake of the genocide, Rwanda faced widespread poverty, food
insecurity, and deep economic and social fractures. The government prioritized the agriculture sector in
its recovery plan, recognizing it as the backbone of the economy and a means to rebuild rural livelihoods
and national stability. Key initiatives included substantial investment in smallholder farming, as well as
providing access to improved seeds, fertilizers, and modern irrigation systems to increase productivity. This
resulted in a boost to rural incomes and fostered stability by addressing underlying economic grievances.46

45. Mozambique’s agricultural transformation post-civil war is another success story, where
strategic investments in rural development and agriculture infrastructure helped drive economic
progress in a post-conflict setting. After the peace agreement in 1992, the country focused on
rebuilding its rural economy, which had been devastated by years of conflict. Recognizing that agriculture
was the primary livelihood for the majority of the population, the government prioritized policies and
investments to revitalize this sector which helped to accelerate food production, reduce dependency on
imports, create jobs, and improve food security.47

_______________________________________________
46
Aragie, et al. (2022).
47
World Bank (2020a).

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

2.3 Unlocking the sector’s potential is vital for

strengthening communities
Urgent action is needed to address the escalating food insecurity crisis by providing
life-saving food aid and supporting essential agriculture activities to enhance resilience.

46. Cash and voucher assistance is recommended in areas where local markets and supply
chains are operational, enabling vulnerable populations to directly purchase essential goods. This
approach allows families to meet their specific needs while supporting the local economy and reducing
the logistical challenges of large-scale distributions. Life-saving food aid can involve distributing staple
foods and nutritional supplements to prevent malnutrition and starvation. The WFP continues to use
commodity vouchers in areas where traditional food distribution is not feasible due to access challenges,
serving as an alternate modality to reach those in need. This initiative was implemented in the famine-
hit Zamzam camp, and risk-of-famine areas including Abu Shouk camp, Elsalam camp, and Sheikan in
North Kordofan state, reaching nearly 170,000 people in December 2024.48 Simultaneously, agricultural
assistance could include providing seeds, tools, and other inputs to help families resume or maintain food
production, thereby enabling them to rebuild their livelihoods and enhance resilience to future food crises.

47. Supporting the production of essential local staple cereals for the planting seasons is crucial.
This can be achieved by distributing high-quality seeds to farmers in a timely manner. Such measures
will improve crop yields and resilience, particularly under challenging climatic conditions, while promoting
immediate food production and reducing reliance on imported food aid.

48. Focusing strategically on supporting small-scale farmers can significantly boost productivity
and reduce poverty, particularly in rural areas. This support includes access to high-quality seeds
and fertilizers, along with training in sustainable farming practices which enhance both productivity
and production quality, allowing farmers to generate more income, elevating their standard of living
and supporting the wider rural community. Additionally, these efforts encourage displaced farmers to
return, especially with the availability of incentives to support their integration. The Sudan Somoud
Project49 – a key development project financed by the World Bank – is designed to complement the
current humanitarian aid to Sudan by laying the groundwork for medium- and longer-term development
in areas with a high concentration of internally displaced persons. It aims to enhance food security
and resilience by supporting over 16,000 farmers and cooperatives in conflict-affected areas and
revitalizing the private sector as part of a functional market system. This includes improving strategic
crop production, developing agriculture value chains, and strengthening community market points and
kitchens.50 Furthermore, despite the ongoing conflict and related disruptions, local farmers in several
states exemplified the potential of such targeted support by successfully increasing wheat production
during the summer agriculture season in 2024 (typically spanning from July to September) meeting
over one-fifth of the country’s wheat needs. This notable achievement is largely attributed to the
Sudan Emergency Wheat Production Project – a collaborative effort between the WFP and the African
Development Bank (AfDB). The project provided climate resilient seeds and fertilizers to over 170,000
smallholder farmers across five states, including River Nile, Gezira, Kassala, Northern, and White Nile.
In some regions, farmers saw up to a 70 percent increase in wheat yields. Significantly, many of the
participating farmers were newly displaced by the conflict, highlighting the initiative’s critical role in
supporting vulnerable communities during a challenging period.51

_______________________________________________
48
WFP (2024).
49
UNICEF (2024).
50
https://www.worldbank.org/en/news/press-release/2024/04/15/new-afe-world-bank-initiative-sudan
51
https://www.wfp.org/stories/sudans-war-rages-its-farmers-help-fill-hunger-gap

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

49. Restoration of degraded lands can play a transformative role in driving growth in the sector.
Reclaiming previously unusable areas for cultivation would expand the amount of arable land available for farming.
Restoration efforts – including soil amendment and reforestation, enhancing soil fertility, reducing desertification,
and improving water retention – all contribute to increased productivity and sustainable agriculture growth.

50. Rebuilding agriculture infrastructure is crucial for revitalizing agriculture productivity and
ensuring long-term food security. Key infrastructure, including irrigation systems, roads, storage
facilities, and marketplaces that were damaged or destroyed during the conflict, play a vital role in job
creation and fostering rural development – both essential components for recovery.

51. In the medium and longer term, transitioning from subsistence farming, which remains
widespread, to commercial agriculture can drive economic growth and reduce poverty. This shift
requires strengthening of the systems, policies, and institutions that support agriculture development.
Key elements of this approach include:

(i) Promoting access to modern technologies: Providing farmers with advanced technologies
such as mechanized equipment and mobile irrigation systems significantly enhances productivity.
Additionally, the adoption of climate-smart technologies and practices would enable farmers to
better manage climate-related challenges.

(ii) Expanding access to financial services: Financial products such as affordable loans, crop
insurance, and savings accounts enable investment while protecting against market and climate
risks. Access to financial services is vital for funding farm investments, improving post-harvest
practices, smoothing household cash flow, enhancing market access, and managing risks. Such
access also plays a significant role in climate adaptation and increasing agriculture’s resilience to
climate change, contributing to long-term food security.52

(iii) Reforming land holdings: Clear and fair land tenure is essential for promoting sustainable
agriculture. Secure land tenure encourages farmers to invest in sustainable land management
practices, thereby improving agriculture productivity and food security.53 For instance, the traditional
communal land tenure systems applied in the Darfur states, governed by customary laws, have
long been a source of conflict, fueling disputes over land access and usage. Comprehensive land
tenure reforms must prioritize equitable access to land for all stakeholders, including displaced
communities and marginalized groups. This includes formalizing land rights, enhancing legal
frameworks, and strengthening mechanisms for dispute resolution. Such reforms will serve as a
foundation for peacebuilding, economic recovery, and long-term development.54

_______________________________________________
52
Hishigsuren, et al. (2015).
53
FAO (2013).
54
Augustinus, et al. (2020).

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

52. Increasing value-add in agriculture involves enhancing the profitability and marketability of
agricultural products. Key strategies to achieve this include:

(i) Developing agro-processing industries: Establishing facilities for processing crops such as
sorghum, sesame, and ground nuts into products like flour, oil, and packaged foods would add
significant value to locally produced goods, making them more profitable. This shift could stimulate
economic activity in underserved regions and reduce Sudan’s dependence on imported goods.

(ii) Improving quality standards: Ensuring Sudan’s agriculture products meet higher quality
standards could significantly boost their competitiveness in both domestic and international
markets. Certified products not only command higher prices but also enhance the country’s
agriculture reputation globally, creating opportunities for farmers to tap into more lucrative
international trade channels.

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SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Close up of cotton. Abu Asher, Sudan. Photo by Arne Hoel, World Bank.
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Part 3:
A Way Forward
and Policy Options
53. Sudan’s path to recovery from conflict and achieving sustainable development requires
addressing fundamental preconditions, including the deep-rooted economic and social challenges.
Sustainable development and peace can only be achieved through a comprehensive approach that
promotes inclusivity, stability, and economic revitalization.

54. The trajectory of economic recovery will depend on the extent of conflict resolution, governance
and economic reforms, and re-engagement with the international community. Different development
scenarios presented in this section highlight the potential pace and scale of economic revival, driven by
key policy choices and the level of external support.

3.1 Post-conflict growth scenarios: Pathways to

economic recovery
A strategic focus on macroeconomic stabilization, investment in critical sectors, and
structural reforms will be essential for accelerating growth and achieving long-term
economic resilience.

55. The SEU considers a baseline Figure 14: Recovery Scenarios of Real GDP in Sudan (Billion SDG)
scenario along with a reform
scenario, both of which assume that
conflict resolution will be achieved
within 2025. The magnitude of
conflict-related displacement and
destruction is likely to result in
economic scarring, prolonging the
path to full recovery. These scenarios
project higher growth rates in the
initial years of 2025 and 2026,
reflecting the resumption of economic
activities made possible by the
conflict resolution (Figure 14). Each
scenario has a different assumption
on the completion date of the HIPC
process, which corresponds to the Source: World Bank Staff estimates.
implementation of key policy triggers.

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

• Baseline Scenario (limited reforms and moderate growth): Economic recovery is primarily driven
by natural post-conflict stabilization rather than proactive policy changes and reforms, which
constrains both the speed and sustainability of growth. Progress towards HIPC completion is
slow due to challenges in meeting debt relief requirements. Persistent structural challenges hinder
significant transformation, leading to a projected recovery to pre-conflict levels by 2038.

• Reform Scenario (comprehensive reforms and accelerated growth): In this scenario, the
country commits to a transformative economic agenda, ensuring the rapid and comprehensive
implementation of broad and deep reforms. The pace of international re-engagement is accelerated,
unlocking greater financial support and investment inflows. This momentum enables the country to
achieve HIPC completion and regain pre-conflict GDP levels more quickly by 2031.

3.2 Key policy options for sustainable recovery and

economic stability
Restoring Sudan’s economy in the post-conflict period requires a comprehensive policy
framework that promotes stability, resilience, and sustainable development. This would
be based on a specific recovery plan, and would be financed by domestic revenue
mobilization as well as assistance from development partners and informed by a
comprehensive assessment of physical damages, economic losses, recovery needs, and
corresponding priorities for the allocation of resources. Successful recovery will also
depend on effective governance, strong institutions, and coordinated engagement with
domestic and international stakeholders. This section presents key reforms and policy
options necessary for accelerating growth and ensuring long-term resilience.

3.2.1 Macroeconomic policies

56. The resumption of the HIPC initiative holds significant potential for post-conflict economic
recovery by providing critical debt relief and creating fiscal space for development-focused
investments. The initiative has proven successful in other post-conflict countries such as Liberia and
the Democratic Republic of Congo,55 and more recently in Somalia, which reached HIPC completion point
in December 2023, resulting in reducing debt from 64 percent of GDP in 2018 to under 6 percent by
the end of 2023.56 This substantial reduction allows Somalia to access additional financial resources
to invest in poverty reduction, job creation, and economic stability and provides a foundation for the
country to attract external financing to drive inclusive growth and resilience. Sudan faces a high debt
burden, with over US$60 billion in foreign obligations currently in arrears, that constrains its ability
to invest in essential sectors like infrastructure, healthcare, and education. By completing the HIPC
process, the country can move toward comprehensive debt relief, which will reduce annual debt servicing
costs and redirect funds towards social and economic rebuilding efforts. The initiative can help stabilize
the economy and lay a foundation for sustainable growth by restoring creditor confidence and enabling
a more resilient fiscal policy. In addition, the HIPC completion triggers, which were already agreed with
Sudan in June 2021, represent key reforms and policies that can provide a foundation for sustainable
growth and poverty reduction.

_______________________________________________
55
https://www.imf.org/en/News/Articles/2015/09/14/01/49/pr10274
56
https://www.imf.org/en/News/Articles/2023/12/13/pr23438-imf-and-world-bank-announce-us-4-5-billion-in-debt-relief-for-somalia

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

57. One critical HIPC completion trigger involves measures to increase cost recovery in the
electricity sector. A few years before the conflict, energy subsidies (both on and off budget) became so
massive, amounting to well over 100 percent of budgetary revenues, that macroeconomic stabilization
became impossible. Almost all other public expenditures were crowded out. When thermal electricity
supply is revived in the post-conflict period, macroeconomic stabilization, and consequently economic
growth, will depend critically on constraining the size of commodity subsidies. Savings generated from
reducing energy subsidies will facilitate the consolidation of public finances – both on and off budget
– thereby reducing the need for the Central Bank monetization and contributing to macroeconomic
stabilization. This implies progress on a steady course toward cost recovery in the electricity sector,
consistent with the HIPC trigger, and maintaining the discipline not to revive other commodity subsides.

58. Other HIPC triggers that would improve the investment climate for small business activity
include providing a “one stop shop” for regulation and tax issues and facilitating the expansion of
secured lending to entrepreneurs through the strengthening of creditor rights. Reforms to reduce
tariffs, particularly for key investment-related imports, and to rationalize the foreign trade regime,
also have strong growth enhancing potential. Another key trigger is the creation of an effective and
comprehensive framework for public financial management in the country, including the governance of
state-owned enterprises.

59. Preventing the resurgence of excessive commodity subsidies is critical to ensuring sustainable
economic recovery and long-term post-conflict fiscal sustainability. A successful post-conflict
recovery hinges on maintaining control over commodity subsidies that had previously destabilized
the economy and adopting a more sustainable approach to public spending. The implementation of a
structured roadmap toward cost recovery in the electricity sector is vital for ensuring fiscal sustainability
and macroeconomic stability while redirecting savings from reduced subsidies toward public investment
in infrastructure, social services, and other growth-enhancing sectors. This process, which serves as
a trigger for debt relief under the HIPC initiative, involves gradually reducing subsidies while ensuring
that electricity remains affordable for vulnerable populations through targeted support mechanisms.
The reduction/elimination of fuel subsidies also helps moderate consumption and promotes alternative
clean sources of energy that have long-lasting beneficial effects on the climate and the environment.57

60. A single unified market exchange rate can enhance economic stability and help facilitate a foreign
trade recovery. Sudan has made use of multiple exchange rates that, in essence, implement implicit taxes
and subsidies in areas such as gold, imports, and foreign inflows, including remittances. To the degree that
these taxes or subsidies are maintained, they can be implemented in a more efficient and transparent
manner than through a non-market exchange rate. Sudan’s reform to unify the exchange rate was a
significant step forward for improving the context for foreign trade, and this progress should be sustained.

_______________________________________________
57
The World Bank, HIPC Initiative, the Republic of Sudan, March 2021.

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

3.2.2 Structural reforms

61. Unlocking agricultural potential is crucial for driving post-conflict economic recovery. Policies that
enhance the sector’s productivity and support its transition to a commercialized industry will foster growth
and reduce poverty. Strengthening value addition in agriculture by improving the profitability of Sudanese
agricultural products can further boost farmers’ incomes and uplift rural communities. Additionally, these
efforts will enhance social resilience and contribute to long-term economic stability. The joint WFP and
AfDB initiative,58 which provided targeted support for farmers in five states in 2024, underscores the
transformative impact of well-designed agricultural policies and strategic partnerships. This initiative
reinforces agriculture’s critical role as a catalyst for post-conflict recovery and long-term resilience.

62. A coordinated approach, focused on mobilizing multi-donor and domestic resources, is crucial to
rebuilding Sudan’s economy and infrastructure. Sudan had effectively engaged with the international
community prior to the conflict, which will give the country a head start for rapid re-engagement.
Success stories from post-conflict countries like Liberia and Sierra Leone highlight the effectiveness
of utilizing multi-donor trust funds to support economic recovery. In both cases, these funds pooled
resources from international partners to finance critical projects in transportation, electricity, education,
and healthcare – addressing urgent needs while supporting long-term development goals. This model
demonstrates the importance of coordinated international support in fostering sustainable recovery and
growth in post-conflict settings.

63. A multi- donor trust fund could play a crucial role in addressing urgent post-conflict needs and
laying the foundation for long-term development. The STARS Trust Fund, established in April 2020,
was able to galvanize about US$500 million in funding from 14 donors. STARS TF served as the primary
financing vehicle for a large social impact mitigation program in support of the critical macro-economic
reforms which paved the way to Sudan’s arrears clearance to International Development Association
and the reaching of the HIPIC Initiative decision point in June 2021. The military Coup of October 2021
has led to a pause in World Bank support to the Government of Sudan, including support of STARS TF.59
Going forward, STARS TF remains a tool for partner dialogue, collaboration, and a financing vehicle for
Sudan’s emergent needs and priorities.

64. Shifting toward the demilitarization of the economy could unlock significant growth potential
by reallocating resources to social and productive sectors post-conflict. The 2019 revolution marked
a critical turning point, with the government aiming to transition from a militarized to a more civilian-led
economy. However, challenges persist as military institutions continue to wield considerable economic and
political influence. This includes control of key state-owned enterprises and shadow budgets generated
from various sources that are separate from the national budget. Redirecting resources to social and
productive sectors lays the foundation for economic stability and poverty reduction. Additionally, increased
transparency and reduced military involvement would create a more favorable environment for foreign
investment. These reforms are crucial for supporting Sudan’s recovery and restoring public trust.

_______________________________________________
58
https://www.wfp.org/stories/sudans-war-rages-its-farmers-help-fill-hunger-gap
59
World Bank (2023b).

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

65. Eliminating barriers to domestic and foreign trade is essential for economic recovery.
Infrastructure damage has created new trade obstacles that will take time to address, requiring
prioritization based on cost and impact on markets, and on the livelihoods of citizens. Maintaining a
unified economic space in Sudan necessitates addressing the growing trend of local governments and
groups to impose tolls or security fees on the transportation of goods. Additionally, imports tariffs –
both explicit and implicit through a manipulated customs exchange rate – remain among the highest
in the region. Honoring commitments to the African Continental Free Trade Area and advancing tariff
liberalization with other member states will benefit the country. A broader reform to rationalize and
enhance tariff transparency is also necessary, alongside simplifying and streamlining customs processes.

66. Post-conflict recovery can be strengthened through regional cooperation and integration.
Sudan should strengthen ties with neighboring countries, drawing lessons from nations like Ethiopia
and Kenya that have benefited from regional trade agreements and partnerships. This could involve
establishing trade agreements, promoting cross-border investments, and collaborating on infrastructure
projects that improve connectivity. Such efforts would support economic recovery by expanding markets
and resources, ultimately benefiting the entire region.

3.2.3 Social and humanitarian policies

67. The severe humanitarian crisis highlights the urgent need to restore security and stability
to mitigate the conflict’s devastating impacts on the economy and population. Recovery efforts
should prioritize rebuilding infrastructure to attract foreign investment in high-potential sectors where
the employment of low-income workers and entrepreneurs is concentrated, like agriculture and mining,
while creating job opportunities that empower local communities and protecting the most vulnerable
through social programs. Ensuring equitable resource distribution and accountability will be crucial for
addressing regional disparities and fostering economic growth. These measures will help improve living
standards and build long-term resilience for the future.

68. Investing in social services, particularly education and healthcare, is essential for rebuilding
human capital in post-conflict settings. Countries like Liberia and Sierra Leone have demonstrated
that prioritizing education and health can lead to significant social improvements and economic
recovery. In Sudan, efforts should focus on rebuilding schools and healthcare facilities, training educators
and healthcare workers, and providing access to essential services. These investments not only address
immediate needs but also lay the groundwork for a skilled workforce that can contribute to long-term
economic growth and development. The World Bank-financed Somoud project supports communities
amid the ongoing conflict and challenges.60 The project focuses on improving access to essential services
such as healthcare and education while enhancing food security. Implemented in collaboration with
UNICEF and the WFP, the project has been implemented in the more stable areas such as Northern,
River Nile, Al Qadarif, and Kassala states.61 The initiative addresses immediate needs by delivering health,
education, water, sanitation, and hygiene services to vulnerable communities, while also prioritizing both
immediate relief and long-term recovery. Expanding the geographical coverage of Somoud project to
other areas considered safe in the future could improve opportunities and extend support to other
communities.

_______________________________________________
60
https://www.worldbank.org/en/news/press-release/2024/04/15/new-afe-world-bank-initiative-sudan
61
UNICEF (2024).

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 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

69. National reconciliation and public participation are vital in rebuilding trust among Sudanese
communities. Truth and reconciliation commissions, inter-community dialogues, and reintegration
programs for displaced persons and ex-combatants can help heal divisions and prevent future violence. A
strong civil society and free media are essential for holding the government accountable and promoting
civic engagement. By prioritizing inclusive governance, Sudan can lay the foundation for a more peaceful,
democratic, and sustainable future.

70. Strengthening governance and institutions is critical for post-conflict recovery. Establishing
transparent and accountable systems can help rebuild public trust, attract investment, and ensure the
effective implementation of recovery efforts. Post-conflict experiences in countries like Rwanda, where
governance reforms and anti-corruption measures were prioritized, can offer valuable insights.62 Sudan
should focus on enhancing the capacity of local institutions, promoting the rule of law, and ensuring
inclusivity in decision-making processes to foster a stable environment conducive to recovery.

71. Addressing landmine contamination in post-conflict Sudan is critical to restoring safe access
to land and resources, thereby facilitating socio-economic development in affected regions.
Previously, Sudan has made significant progress in demining efforts, notably through collaboration with
international organizations such as the United Nations Mine Action Service (UNMAS). These partnerships
have provided crucial technical and operational support, concentrating on areas heavily impacted by
landmines and explosive remnants of war. Since 2015, Sudan has successfully declared large portions of
the eastern states free of landmines, including Red Sea and Al Qadarif.63 Effectively tackling landmine
contamination post-conflict requires a multifaceted approach that includes systematic mapping and
clearance of affected areas as well as medical care and rehabilitation programs for survivors. Equally
important is mine risk education, which informs and educates communities about the dangers of
landmines and explosive remnants of war, promoting safe practices that reduce the risk of injury.
This educational outreach is particularly vital for protecting vulnerable groups, such as children, and
preventing accidents in high-risk areas.

_______________________________________________
62
Office of the Ombudsman (2012).
63
https://ihl-in-action.icrc.org/case-study/sudan-neutralisation-and-removal-landmines

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SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

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SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

Sudan’s MultiDonor Trust Fund in action. Scene on the Asphalt road between Gadami and Hamashkoreeb.
Waterpoint where people and their animals can access clean drinking water as they move in search of pasture.
Photo by Salahaldeen Nadir, World Bank.
 SUDAN ECONOMIC UPDATE 2025 - The Economic and Social Consequences of the Conflict: Charting a Path to Recovery

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Photo: Sudan Somoud – Enhancing Community Resilience Project, World Bank.

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Annexes
Annex 1: GDP projections in Sudan

GDP growth rates are projected using an expenditure-based approach that combines historical trends,
economic theory, and forecasting techniques. This methodology, which is based on the World Bank’s
Macro-Fiscal Model, integrates theoretically grounded model equations to estimate private consumption,
government consumption, gross fixed investment, and trade flows. These components are subsequently
aggregated to calculate overall GDP, while also informing sectoral growth forecasts.

Private consumption and gross fixed investment: Private consumption is projected by factoring
in changes in disposable income, inflation, exchange rates movements, fiscal performance, and past
consumption trends. The model accounts for how households adjust their spending in response to
economic changes. Gross fixed investment is estimated based on past GDP growth, assumed capital
stock utilization, and fiscal performance, reflecting the relationship between economic activity and fixed
capital formation.

Trade flows and government consumption: Trade flow estimates utilize satellite-based data from the
IMF Port-Watch to track export and import activity. Additionally, export projections are influenced by
global demand factors, price competitiveness, and historical trends, while imports are driven by domestic
demand, fiscal spending, and import costs. Government consumption projections rely on fiscal measures
frequently announced by the Ministry of Finance and Economic Planning and other government officials
in the absence of formal government budgets during the ongoing conflict. Moreover, trends in wages,
social assistance, and other expenditure priorities are also incorporated. This dynamic approach ensures
that projections reflect both current fiscal policies and broader macroeconomic conditions, providing a
robust view of Sudan’s economic growth trajectory.

Annex 2: Estimating poverty rates in Sudan

Poverty rates in Sudan have been estimated based on projections from the last available household
poverty survey conducted in 2014. This methodology adjusts the baseline data using GDP per capita
growth rates and applies a pass-through rate to estimate how changes in the economy affect household
welfare. Historically, a low pass-through rate of 0.7 was used, assuming “distribution neutrality,” where
all households are scaled equally based on economic growth trends. Estimates are further standardized
using the 2017 purchasing power parity framework to ensure comparability across regions.
Given the worsening economic and humanitarian conditions, the low pass-through rate has proven
inadequate. For example, the IPC estimates indicated that 57 percent of the population faced acute
food insecurity in mid-2024. To better reflect these realities, a medium pass-through rate was adopted,
producing poverty projections more aligned with the severity of the current crisis. This shift highlights the
urgent need for updated and nationally representative data to provide more accurate poverty estimates
and inform targeted policy interventions.

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Annex 3: Map of Sudan

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