The outbreak of fighting between the Sudanese army and the Rapid Support Forces (RSF) has led to unprecedented destruction in the Sudanese capital, Khartoum, and other parts of the country.
In addition to the human cost, which included hundreds of civilian deaths, thousands of injuries, and millions displaced among the internally displaced and refugees, there were survivors of violations, including rape, physical assaults, torture, and detention under harsh and degrading conditions.
Sudan has become one of the world’s largest countries in terms of the number of refugees and displaced persons, exceeding 7 million Sudanese. Of these, more than 5 million have been displaced since the outbreak of the war in mid-April.
One of the major negative impacts caused by the war, with long-lasting repercussions, is the economic damage inflicted on the country. In addition to the direct material losses resulting from the destruction of infrastructure, buildings, commercial, industrial, and residential facilities, there is also damage to the national economy.
Economic recovery interrupted by coup
There were hopes that the economy would continue its challenging recovery journey after the October 25, 2021 coup, but it was completely devastated by the outbreak of the war in 2023.
On October 25, 2021, before the coup against Prime Minister Abdullah Hamdok’s government, the coup derailed the country’s path to debt relief that had burdened it for decades through the Heavily Indebted Poor Countries (HIPC) program.
The transitional civilian government had embarked on a bold reform program aimed at economic stability by unifying the exchange rate, reducing the budget deficit through the removal of commodity subsidies to mitigate inflation, implementing a social support program for poor families affected by the reforms, and increasing efforts to support agricultural seasons for increased production.
Late payments of Sudan’s debt totalling $1.4 billion to the International Monetary Fund (IMF) were settled on June 29, 2021, with the assistance of bridge financing from the French government. Paris Club creditors cancelled $14.1 billion of their debts to Sudan out of a total of $23 billion (about 60 percent).
Negotiations by the transitional government, supported by the international community, began in August 2021 to settle $20 billion in debts owed to creditors outside the Paris Club. Unfortunately, the debt relief process, along with other economic reforms, was disrupted due to the coup by the generals on October 25, 2021.
War exacerbating the economic crisis
International relief agencies estimated the essential supplies needed to aid Sudanese in the midst of this humanitarian disaster at around $2.6 billion since the start of the war, but only $841 million has been made available so far.
The value of the Sudanese pound sharply plummeted since the outbreak of the war, reaching a market value today of over 830 pounds against USD. The average household income in urban and rural areas has dropped by 40% compared to pre-war levels, and state employees’ salaries have been delayed for over four months.
More than 66% of food companies and factories in the country have ceased operations. 50.3% of Sudanese workers lost their jobs, 20.4% of agricultural workers lost their jobs, 81.3% of industrial workers lost their livelihood, and 47.9% of service workers lost their jobs.
The Gross Domestic Product (GDP) is expected to decrease by 48%. The losses are projected to be 21% in the agricultural sector, 70% in the industrial sector, and 49% in the services sector.
The impact on the gold mining sector, which contributes 15% to the GDP, is expected to be significant, with an anticipated loss of $1 billion this year.
Estimates indicate that the economic cost of the war in Sudan since its outbreak until now has reached $10 billion.
Several experts estimate the direct and indirect costs of the current Sudanese war at around $100 million per day.