Sudan

Stabilisation of front lines with no prospect of a resolution to the conflict

The war between the Sudanese Armed Forces (SAF), led by General Abdel Fattah al-Burhan, and the Rapid Support Forces (RSF) commanded by General Mohamed Hamdan Dagalo ("Hemedti"), which has been ongoing since 15 April 2023, expanded further in 2025 and 2026. The capture of El Fasher, the SAF's last stronghold in North Darfur, by the RSF in October 2025 engendered large-scale atrocities – some sources reported up to 60,000 civilian deaths – demarcated the front lines. The southern half of the country, where most of the population is concentrated, is now divided between the RSF in the west (Darfur and West Kordofan) and the SAF in the east (the Nile basin, including Khartoum, and the Red Sea coast). The RSF and its allies also control the Libyan and Chadian borders. This corridor, which is critical for the importation of weapons, fuel and mercenaries, could come under threat from a possible SAF offensive in North Darfur in the coming year. The conflict is now concentrated in two main theatres. In Kordofan, the RSF has besieged El Obeid since January 2026, a strategic crossroads city controlling the route to Khartoum. In the Blue Nile region, bordering South Sudan and Ethiopia, the RSF and its allies in the Sudan People's Liberation Movement-North (SPLM-N) led by Abdelaziz al-Hilu, a major armed group based in the Nuba Mountains, suffered significant territorial and personnel losses in early 2026. Overall, the SAF regained the initiative in 2025-26 and now controls most of Sudan's key economic resources, notably its gold-producing and agricultural areas, as well as access to the Red Sea and the country's main state institutions. The loss of revenue from central Sudan has weakened RSF cohesion, which is increasingly affected by internal rivalries and the defection of senior commanders. The use of drones has become widespread. Long-range strikes, often conducted well beyond the front lines, are now frequent and account for roughly half of all civilian and military casualties. Both sides rely on local or tribal militias whose allegiances fluctuate. Islamist militias linked to former President Omar al-Bashir's ruling party, particularly the Al-Baraa bin Malik Brigade, have also played a key role in the SAF's resurgence, while the presence of Colombian mercenaries within RSF ranks has been documented. Both camps are engaged in a process of administrative consolidation. This led to the creation, in early 2025, of a political structure known as the Coalition for the Foundation of Sudan (Ta'sis) that brought together the various components of the RSF camp. Nominally civilian transitional governments have been appointed in both Khartoum under Kamil Idris, and Nyala, the RSF's de facto capital, under Hassan al-Taishi. The institutionalisation of the two rival camps, together with the deployment of competing civilian administrations, has entrenched the country's division even further, although the integration of armed groups within both coalitions is still incomplete. Although the demarcation of front lines is likely to ease the intensity of fighting, a decisive military victory or a lasting peace agreement can be ruled out in the short term.

Each side in the conflict relies on foreign backers. The United Arab Emirates (UAE), the RSF's principal financial and logistical supporter despite official denials, has facilitated agreements with several countries in the region, including Chad, Ethiopia, the Central African Republic, Kenya, South Sudan, Uganda and Somalia's autonomous Puntland region, as well as, most importantly, Field Marshal Haftar's forces in eastern Libya. In exchange for Emirati investments, these countries have to varying degrees hosted training facilities and provided supply hubs for RSF forces. Cross-border routes are used both to transport military equipment financed by Abu Dhabi and to export gold from territories controlled by the paramilitaries. However, these regional support networks are fragile, particularly in Chad and Libya. In 2026, the UAE appears to have increasingly shifted its supply routes towards other partners, notably the Central African Republic and Ethiopia. Relations between the SAF and Ethiopia were consequently severed in May 2026. Addis Ababa was accused of hosting RSF troops, while the Blue Nile border region emerged as one of the conflict's main theatres of operation. In response, the SAF strengthened ties with Eritrea and the Tigray People's Liberation Front (TPLF), thus heightening the risk of a regional spillover. The SAF's main external sponsors are Egypt, Iran and Turkey. Saudi Arabia has also become increasingly supportive of the SAF on back of its rivalry with the UAE and its desire to contain Iran’s influence. Riyadh nevertheless remains wary of the growing influence of Islamist factions within the armed forces. By contrast, Qatar, which seeks to position itself as a platform for mediation, is the main supporter of pro-SAF Islamist groups. Beyond political rivalries and competition over gold resources, Gulf states' involvement is also driven by food security concerns. The UAE, Saudi Arabia and Qatar respectively hold agricultural land and livestock assets in Sudan worth approximately USD 10 billion, USD 1 billion and USD 500 million. Qatar Mining also holds copper concessions valued at around USD 800 million. Last, the US, which leads a mediation quartet comprising Saudi Arabia, Egypt and the UAE, has imposed sanctions on several officials and companies affiliated with both sides of the conflict.

Fragile economic respite amid a humanitarian catastrophe

Following the crisis triggered by the outbreak of war in 2023 and 2024, economic conditions deteriorated further in 2025 as a dual result of the intensity of fighting and a poor cereal harvest (-22%). Nevertheless, after eight consecutive years of contraction, economic activity is expected to return to growth in 2026, supported by a modest improvement in the security situation and the army's recapture of Khartoum. The founding of governing institutions by both camps should facilitate the return of some internally displaced populations. Central Sudan appears relatively secure, which sanctions a tentative recovery in household consumption and local trade. Agriculture (25% of GDP and 65% of employment) is severely hampered, however, as the conflict has significantly reduced cultivated areas and damaged irrigation networks, particularly in Gezira and Sennar, which are the country's main agricultural regions. The fragile economic improvement also masks the sharp deterioration in conditions in Kordofan and the Blue Nile, as well as persistent acute food insecurity in Darfur. In 2027, activity should benefit from a gradual normalisation of consumption and higher agricultural and gold production but will remain highly dependent on an easing in the intensity of the conflict. The recovery process is nonetheless likely to be slow. Damage to transport, healthcare and energy infrastructure is extensive, while available resources are extremely limited. The economic policies pursued by the rival authorities are expected to remain focused on financing the war effort and securing control over revenue-generating assets, particularly the largely artisanal gold-mining sector.

Hyperinflation has taken hold since the start of the war, driven by rising food and transport costs. Price growth nevertheless slowed in the first half of 2026, reaching 44.5% year-on-year in May (in army-controlled areas), but could accelerate again owing to poor harvests and higher fertiliser prices. Inflation in the western regions, which are isolated and face food shortages, is probably significantly higher, although difficult to assess in the absence of data. In 2026, the country's political partition may extend to the monetary sphere. Between 2024 and April 2026, the Central Bank of Sudan (CBOS) issued new banknotes that are reserved for bank account holders and intended to replace the old notes circulating in RSF strongholds, some of which were looted from CBOS reserves in 2025. At the same time, access to Bankak, the Bank of Khartoum's digital platform and the country's dominant payment system, was restricted in western Sudan, while RSF accounts were targeted. In response, Ta'sis established a parallel central bank in Nyala in May 2026 to compete with the CBOS. The RSF also announced the creation of a private bank and a separate digital payment application. The new banknotes are not accepted in areas under their control. The RSF banking system will remain a local network. Without institutional recognition, it has no access to international payment systems (SWIFT, IBAN) and imposes substantial withdrawal fees (15% officially, up to 40% in practice). This monetary partition, the loss of fungibility of the Sudanese pound and the use of foreign currencies (the Chadian CFA franc, the Libyan dinar and the US dollar) severely limit the effectiveness of monetary policy, despite a high banking penetration rate. The use of payment applications is encouraged by cash shortages in some regions, resulting from hyperinflation and the systematic looting of banks by the warring parties.

Informal trade flows, fiscal fragmentation and sovereign default

Sudan’s current account deficit is significant, although difficult to assess given the scale of unrecorded flows. It should nevertheless narrow in 2026 as gold exports recover. The trade balance has been structurally in deficit since the loss of South Sudan's oil fields in 2011, and the war has further widened the imbalance. Gold, of which Sudan is Africa's leading producer (generating 70 tonnes per year), is by far the country's main export. Official gold exports amounted to USD 370 million in Q1 2026, representing 53% of recorded exports, even though around 70% of gold exports are estimated to be informal. Other export products include livestock, particularly sheep (18%), and sesame (12%). Oil exports have contracted sharply since the outbreak of the war, with output now below 25,000 barrels per day. Egypt, Saudi Arabia and Oman have become Sudan's main export destinations since exports to the UAE collapsed on back of the Emirati embargo on Port Sudan in August 2025 in response to the severing of diplomatic relations by the Sudanese government. Trade flows with the UAE have nevertheless continued, either through Oman, which has become a transshipment hub, or via RSF-controlled areas and neighbouring countries. The current account deficit is financed primarily by international aid, largely provided in the form of in-kind humanitarian assistance (USD 1.2 billion, equivalent to 2% of GDP). Foreign investment, by contrast, has been close to zero since 2023. Foreign exchange reserves remain extremely low, while the parallel exchange rate weakened from SDG 2,000 per US dollar in 2024 to SDG 3,100 in May 2026, or seven times the official exchange rate (SDG 445).

The war has caused both public revenue and public expenditure to collapse, with each now well below 10% of GDP. A large share of the economy lies outside the formal tax system due to informality, corruption and the loss of state authority over parts of the country. Non-tax revenues account for the bulk of government income. In 2026, the fiscal deficit is expected to narrow despite higher fuel prices, supported by increased taxes on gold and the resumption of South Sudan's transit fee payments for oil exports. The deficit should stabilise in 2027 as agricultural production improves and tax revenues recover in line with the gradual restoration of public administration. The war effort and the humanitarian emergency will continue to absorb the bulk of public spending. The fiscal deficit will be financed primarily through monetary financing. In the west, the RSF does not operate under a unified budget.

Sudan has been in default of payment and accumulating arrears since 1984. These arrears now account for the majority of the country's external public debt. Although a major debt relief initiative was envisaged in 2021 under IMF auspices following a series of reforms, Abdel Fattah al-Burhan's coup indefinitely postponed the process. According to the most recent official data dating from 2022, external debt (92% of total public debt) was held primarily by Kuwait (22%), the Saudi Central Bank (8%), China (8%) and commercial banks (8%). Paris Club members collectively held 16%, while 7% was owed to multilateral creditors. Since 2022, Sudan has made no significant debt repayments (only USD 34 million was repaid in 2024, exclusively to the IDA) and new concessional borrowing has been negligible. In June 2026, China cancelled USD 50 million of bilateral debt. Despite the persistent fiscal deficit and negative real GDP growth, the debt-to-GDP ratio has tended to decline since 2020, with the exception of 2023, when the war began, as a result of hyperinflation.

Last updated: July 2026