Sudan at the Heart of an Economic Storm: Sharp Contraction and an Uncertain Future

Sudan Media Forum

Khartoum, March 28, 2026 (Al-Jareeda) — In a scene reflecting the depth of Sudan’s economic crisis, major cities—foremost among them Khartoum—appear to have lost a significant portion of their commercial and productive vitality, amid declining economic activity and growing difficulties in daily living conditions.

Since the outbreak of war in April 2023, Sudan’s economy has entered a critical phase marked by widespread contraction and declining performance across most sectors. This comes amid a complex landscape shaped by overlapping internal and external factors, the near-total shutdown of more than 80% of the industrial and manufacturing sector, and the suspension of agricultural projects and state institutions. As the war drags on, pressing questions arise about Sudan’s economic future: Will Sudan recover? And what might the reconstruction phase look like if the war ends?

Unprecedented Economic Contraction

Financial institutions and economic experts estimate that Sudan’s GDP contracted by between 40% and 50% during the period from 2023 to 2025—one of the steepest declines recorded in Africa in recent decades. Sudanese economist Dr. Ahmed Al-Tijani notes that:

“The Sudanese economy has moved from fragility to deep contraction, losing a significant portion of its productive capacity in a short period.”

Severe Decline in Productive Sectors

Al-Tijani further explains that the industrial sector has been heavily impacted, with estimates indicating that between 70% and 80% of industrial facilities have either halted operations or suffered damage due to disrupted supply chains and operational challenges.

The agricultural sector—one of the main pillars of the economy—has also experienced a decline in output ranging from 30% to 50%, according to agricultural experts. This is attributed to a lack of financing, rising input costs, and logistical challenges. Experts warn that:

“If these trends continue, Sudan may become increasingly dependent on food imports despite its vast agricultural resources.”

Challenges Facing the Banking Sector

Reports indicate that the Sudanese pound has sharply depreciated, losing more than 80% of its value over the past two years, while inflation has exceeded 300% during certain periods. This has led to a dramatic rise in the prices of basic goods, particularly food.

Financial expert Mohamed Al-Amin states that “High inflation and currency depreciation have eroded incomes, significantly shrinking the middle class and expanding poverty.”

The banking sector has also experienced major disruptions, including reduced services and interruptions in money transfers in some areas. This has forced large segments of the population to rely on cash transactions. Banking sources indicate a growing expansion of informal economic activity, including reliance on the parallel market, due to declining trust in the financial system.

Decline in Foreign Trade

Sudan’s exports—particularly gold and agricultural products—have declined significantly due to reduced production and logistical challenges. Meanwhile, the cost of imports has risen sharply as a result of currency depreciation, making it increasingly difficult to secure essential goods.

Analysts believe that this imbalance in the trade balance is placing additional pressure on the macroeconomy and limiting prospects for stability.

Recent estimates also point to a widening trade deficit over the past two years, driven by the growing gap between exports and imports. Non-oil export revenues have declined significantly, while the import bill has surged due to increased reliance on external sources for essential goods such as wheat, fuel, and medicine.

Experts stress that this situation is putting pressure on foreign currency reserves and increasing exchange rate volatility, directly impacting market stability and limiting the government’s ability to implement effective economic policies amid constrained resources.

Massive Infrastructure Losses

Preliminary estimates suggest that damage to infrastructure—including roads, electricity, water systems, bridges, and airports—ranges between 50 billion and 100 billion, highlighting the scale of the challenge facing future reconstruction efforts.

Labor Market and Brain Drain

Economic conditions have resulted in widespread job losses, with estimates suggesting that unemployment rates may exceed 60%. The country has also witnessed a wave of skilled labor migration, which could negatively affect recovery prospects in the medium term.

Labor expert Abdelrahman Youssef warns that:

“Brain drain represents a double loss—it reduces current productivity and weakens future reconstruction capacity.”

Decline in Foreign Investment

Sudan has experienced a significant decline in foreign investment inflows due to the ongoing war. Economist Dr. Mohamed Othman explains that many regional and international companies have suspended or withdrawn their investments, and strategic projects in key sectors such as energy, agriculture, and infrastructure have been frozen due to uncertainty surrounding the security and economic situation.

This withdrawal not only results in the loss of funding but also affects technology transfer and job creation, further complicating economic recovery efforts. Sudan now faces the challenge of restoring investor confidence by improving the business environment and strengthening institutional stability in the coming phase.

In summary, Sudan’s economy is undergoing a severe contraction. Millions have lost their income sources and livelihoods, becoming heavily dependent on remittances from abroad. One of the most critical challenges is the shortage of cash liquidity, with many markets now relying on digital money transfer applications for daily transactions.

Towards a Recovery Phase

Experts believe that while Sudan’s economy is experiencing severe contraction and institutional fragmentation, it still retains important recovery potential—particularly in agriculture and natural resources.

They emphasize that:

“Reconstruction will require political stability, deep economic reforms, and coordinated regional and international support.”

Given these conditions, the coming phase appears decisive. The challenge is not only to halt the economic decline but also to rebuild a sustainable economy. While current indicators are alarming, opportunities remain if a conducive environment for reform and investment can be established.

• The Sudan Media Forum and its member institutions publish this material, prepared by (Al-Jareeda), to reflect the overall economic conditions in Sudan amid the ongoing war between the Sudanese Armed Forces and the Rapid Support Forces.
  The report highlights key indicators, including a GDP contraction of 40–50%, significant damage to the industrial sector—with 70–80% of facilities affected—as well as the sharp depreciation of the Sudanese pound by more than 80% and inflation exceeding 300%.
  It also draws attention to the widening trade deficit due to declining non-oil exports and rising imports, alongside infrastructure damage estimated between 50 billion and 100 billion.