Expert Warns of Consequences of Continued Gold Exports to the UAE
By: Sudan Events – Rehab Abdullah
Following the Sudanese government’s decision to sever ties with the UAE, questions have arisen regarding the future of gold exports, especially given that over 80% of Sudan’s gold is exported to Dubai.
The pressing question now is whether continuing to export gold—a precious metal—to a single market without considering other immediate global markets might lead Sudan into an economic catastrophe.
In this context, minerals expert and CEO of Al-Futtaim Group of Companies, and member of the Mining Companies Union and CEO of the Businessmen and Businesswomen Club, Mohamed Yahya Othman, advised the government to implement internal reforms to organize the gold buying and selling market. He also called for adopting sound foreign and economic policies with countries and official entities that maintain good relations with Sudan and are currently engaged or entering into partnerships through the Sudanese private sector. This would help curb the outflow of export revenues beyond official channels and reduce the pressure of selling gold exclusively to one country—the UAE.
Speaking to Al-Ahdath, he outlined several recommendations, including opening new markets for gold and agricultural and livestock products, and seeking alternatives to the Dubai Gold Exchange. He noted that Dubai’s exchange deals in derivatives rather than actual physical gold trading. In contrast, several other exchanges—such as those in London, Turkey, Shanghai, and Switzerland—support and regulate spot gold trading. He added that the state and its institutions should adopt the best global models that rely on spot gold exchanges and the OTC (Over-The-Counter) market, while incorporating digital technology and integrating with commercial banks and the central bank.
Mohamed Yahya stressed that the informal market must be organized and monitored to reflect the real activity of this vital sector. He cited examples such as the “Gold Tower” in Khartoum and Atbara, where institutions, gold traders, and companies use local currency to purchase gold and then export it to obtain foreign currency. This practice, he said, has severe economic implications according to many experts. While it might appear to be an effective way of securing foreign currency for imports, it actually exacerbates inflation and further devalues the Sudanese pound. He warned of a potentially catastrophic impact within the next three years.
He further explained that economic theories indicate that any country’s reliance on a single export source—particularly a natural resource—can lead to the decline of other economic and productive sectors. In Sudan’s case, gold revenue increases demand for the Sudanese pound to purchase gold domestically, but this is not matched by an increase in productivity or non-mineral exports, resulting in excessive inflation and a continuous decline in currency value.
Additionally, he pointed out that despite increased gold production and exports in 2021, 2022, and 2023—which improved Sudan’s trade balance—there was no corresponding growth in other productive sectors. In fact, real GDP contracted by -1.9% in 2021 and -29.4% in 2023, showing the economy’s inability to recover despite gold export growth.
Yahya noted that other countries’ experiences show how overdependence on gold for foreign currency often leads to economic imbalances. For example, Venezuela’s focus on oil exports led to the collapse of other productive sectors, making the economy vulnerable to shocks when oil prices fell. Similarly, in the 20th century, South Africa’s heavy reliance on gold exports caused severe currency fluctuations and repeated inflation crises.
He predicted that Sudan’s economic crisis will worsen over the next three years if the country continues along the current path. He expects inflation to remain high due to an increasing money supply unsupported by real economic production, leading to further devaluation of the Sudanese pound. Moreover, continued dependence on gold will make the economy fragile and vulnerable to global price drops, which could create a serious fiscal gap if revenues suddenly decline.
To avoid these outcomes, Mohamed Yahya proposed several solutions. First, a portion of the state’s gold share could be used as a reserve asset to support the Sudanese pound, similar to what Russia and China have done in recent years, where central banks retained gold instead of selling it to reduce currency volatility. Second, Sudan should shift from exporting raw gold to building local refineries to reduce reliance on UAE-based facilities and establish jewelry manufacturing to avoid exporting gold in its raw form—along with other valuable minerals—benefiting that small state (the UAE) instead. This would add value to the final product and create job opportunities.
Third, Sudan could issue gold-backed bonds and sukuk to attract investment without directly selling the metal—an approach Ghana has successfully adopted to enhance economic stability.
In the long term, Yahya emphasized the need to diversify Sudan’s sources of income by rehabilitating productive sectors like agriculture and manufacturing. This would reduce reliance on gold exports. He also recommended investing gold revenues into large agricultural and industrial projects that achieve self-sufficiency and reduce the need for imports—especially food imports—thus easing pressure on the exchange rate and helping stabilize the Sudanese pound.
Finally, Mohamed Yahya stressed the necessity for the government to adopt reforms in economic, monetary, and fiscal policies, and to offer incentives and facilities to attract investors. Without these reforms, Sudan risks facing a highly precarious economic future, with continued inflation and currency depreciation leading to further economic and social crises. However, if serious steps are taken to manage resources—such as establishing a sovereign wealth fund to lead and organize national assets—gold could be transformed from a source of crises into a driver of economic stability and sustainable development.
