Sudan’s war is an economic disaster: here’s how bad it could get

SINCE April 2023, Sudan has been engulfed in a devastating war between the Sudanese Armed Forces and the Rapid Support Forces. What began as a struggle for power has turned into a national catastrophe.

- KHALID SIDDIG

More than 14 million people have been displaced. Health and education systems have collapsed and food insecurity threatens over half the population of about 50 million.

The war has disrupted key sectors, triggering severe economic contractions, and worsening poverty and unemployment levels.

Sudan's finance minister reported in November 2023 that the war had resulted in economic losses exceeding $26billion (R466.5bn) — or more than half the value of the country’s economy a year earlier. The industrial sector, which includes manufacturing and oil refining, has lost over 50% of its value. Employment has fallen by 4.6 million jobs over the period of the conflict. More than 7 million more people have been pushed into poverty. The agrifood system alone has shrunk by 33.6%. These estimates exclude informal economy losses.

My research applies economy-wide models to understand how conflict affects national development. In a recent study, my colleagues and I used this approach to answer the question: What will happen to Sudan’s economy and poverty levels if the war continues through 2025?

To assess the economic impact of the conflict, we used a Social Accounting Matrix multiplier model. This is a tool that captures how shocks affect different sectors and other agents of the economy, such as firms, government and households.

Based on our modelling, the answer is devastating: the conflict could shrink the size of Sudan’s economy by over 40% from 2022 levels, plunging millions more into poverty.

We modelled two scenarios to capture the potential trajectories of Sudan’s economy.

The extreme scenario assumes a sharp initial collapse, with a 29.5% contraction in the size of the economy in 2023 and 12.2% in 2024, followed by a 7% decline in 2025, reflecting some stabilisation over time.