Sudan’s Gold Exports Between Monopoly and the Threat of Smuggling: Which Path Forward?
By: Abu Obaida Ahmed Saeed
Gold at the Heart of Sudan’s Economy
Since the decline of oil and agricultural exports, gold has emerged as Sudan’s primary source of foreign currency. In the first quarter of 2025, Sudan’s exports reached USD 704.1 million, of which gold alone accounted for USD 449.5 million — representing 63.8% of total exports. By contrast, other exports, such as live animals, sesame, and gum arabic, brought in just USD 254.6 million.
Yet imports stood at USD 1.312 billion, leaving a trade deficit of more than USD 608 million. More concerning is that 88% of Sudan’s gold exports went to the United Arab Emirates, which recently suspended imports from Sudan — placing Khartoum in a difficult position as it scrambles to find alternative markets.
Monopoly Through the Central Bank: A Controversial Decision
Prime Minister Kamal Idris directed that all gold exports be handled exclusively by the Central Bank of Sudan. At face value, the move appears aimed at ensuring that export revenues enter official channels. However, in practice, it carries several risks:
1. Lack of commercial flexibility: The central bank is a monetary authority, not a trading entity accustomed to global market negotiations and price fluctuations.
2. Rising smuggling: If producers and traders cannot secure competitive prices through official channels, they are likely to turn to smuggling, especially given Sudan’s porous borders.
3. Eroding investor confidence: Export monopolies deter both local and foreign investment in the mining sector.
Lessons from Africa
Ghana: Established a specialized mining authority while allowing multiple firms to export under strict regulation, attracting investment and curbing smuggling.
Ethiopia: Tried a central bank monopoly, but it led to declining output and higher smuggling, forcing the government to reopen the market to licensed firms.
Tanzania: Launched a domestic gold and precious metals exchange, ensuring price transparency and direct links between producers and global buyers.
These cases show that monopolies rarely succeed; the answer lies in regulation and transparency, not exclusion.
Does Monopoly Fuel Smuggling?
The short answer is yes. Smuggling has long been entrenched in Sudan due to uncompetitive official prices and restrictive policies. The greater the gap between global and local prices, the more smuggling networks thrive across borders.
What Are Sudan’s Best Options?
To minimize risks and maximize benefits, Sudan needs a more flexible and transparent strategy:
1. Liberalize exports under state oversight: Allow licensed firms to export, while mandating that revenues flow through the banking system.
2. Activate the Sudan Gold Exchange: Recently established, it can enhance transparency, competitiveness, and integration with global markets.
3. Diversify markets: Move beyond reliance on the UAE, targeting India, Turkey, China, and selected European markets.
4. Support local producers: Offer fair pricing, targeted tax exemptions, and better logistics for transport, storage, and insurance.
5. Strengthen border controls: Alongside monetary reforms to reduce price gaps between official and parallel markets.
Conclusion
Gold is currently the backbone of Sudan’s economy — but it is a double-edged sword. Managed transparently and flexibly, it could lift the economy; monopolized by a single entity without commercial expertise, it risks fueling smuggling. African experiences show that structured openness, not monopoly, is the way forward. For Sudan, activating its gold exchange, diversifying export destinations, and engaging the private sector remain the most viable paths to safeguard the economy and curb illicit trade.
