Will Sudan’s Recent Economic Policies Stabilize the Pound?

By Dr. Adel Abdel Aziz Al-Faki

The value of the Sudanese pound has plummeted largely due to speculative trading. The newly adopted policies, however, are likely to succeed because they target Sudan’s most important source of foreign currency: gold.

Coordination and information sharing between the Central Bank of Sudan and other relevant ministries, institutions, and economic bodies is the foundation of success.

Since the beginning of this year, the pound has continued to deteriorate, hitting historic lows against foreign currencies, particularly the US dollar.

A valuable study by Professor Ibrahim Onour, an economics lecturer at the University of Khartoum, showed that currency speculation accounted for 55% of the pound’s depreciation after the outbreak of war, compared to just 16% before the conflict.

The economic measures recently announced by the Emergency Economic Committee, chaired by Professor Kamal Al-Tayeb Idris, head of the Sovereign Council, are expected to succeed because they focus on controlling gold production and trade—currently Sudan’s most vital foreign exchange resource.

It is well known that around 80% of gold production is owned by artisanal miners, while 20% comes from concession companies. The government collects substantial royalties from gold and obliges exporters to pay the dollar value of gold exports in advance before shipment. Despite the fact that an estimated 50% of Sudan’s gold is smuggled out of the country, gold still contributed 48% of export revenues, exceeding $2 billion.

The committee’s recent decisions centered on gold, including a directive assigning all trade and exports to a single government entity. The Gold Exporters’ Chamber harshly criticized the move, warning it could be an economic disaster by increasing smuggling and corruption, as well as concentrating gold trade in the hands of a select few. They pointed out that similar experiments had failed in the past.

This time, however, the situation is different. Sudan now has a unified government with a single will, capable of enforcing its decisions—unlike in previous years, when the country was ruled by a fragmented administration in which key economic institutions were dominated by the Rapid Support Forces (RSF), who entrenched themselves in state institutions to protect their interests.

In earlier experiences, the government-backed Sebika company operated on behalf of the Ministry of Finance and the Central Bank, while the RSF-controlled Al-Junaid company engaged in widespread corruption. In the new model, it is vital to appoint competent and trustworthy individuals to the government entity tasked with managing gold.

Regarding smuggling, about 80% of Sudan’s gold is currently produced in three states—Red Sea, Nile River, and Northern—making it possible to curb smuggling with reasonable security measures. More importantly, economic policies can play a decisive role: producers must be guaranteed fair payments for their gold, based on international prices and the parallel market exchange rate. If producers and traders receive competitive rates at official collection points, smuggling will no longer be worthwhile.

The decision requiring all gold shipments between states to be accompanied by official documentation is a necessary step to combat smuggling. It also serves a crucial strategic purpose: proving that the United Arab Emirates has been dealing in illicit gold when such shipments are smuggled through Chad and exported onward to the UAE.

Under international anti–money laundering and counter-terrorism financing regulations, which the UAE has signed, the source of imported gold must be verifiable. International gold trade bodies are well aware of Chad’s limited gold production capacity. Any significant increase beyond that capacity signals smuggled gold from Sudan.

We therefore call for the immediate implementation of the Emergency Economic Committee’s decisions. For gold trade and export, we recommend establishing a public joint-stock company initially owned by the Ministry of Finance, the Central Bank, and the Ministry of Minerals, later open to private investors—while ensuring the government maintains a majority stake of 51% or more. The company should be run according to the highest standards of transparency, governance, and international best practices.

We also urge the activation of a digital information-sharing platform connecting the company with the Ministry of Finance, the Central Bank, the Ministry of Trade and Industry, the Standards Authority, economic security agencies, and commercial banks. This would ensure a complete system for allocating foreign currency resources to licensed importers, with approvals from relevant authorities—such as the Ministry of Petroleum in the case of fuel imports.

A key question readers may ask is: if the government entity handling gold trade and exports pays producers at the parallel (black market) dollar rate, how will it be able to control the exchange market, given that the black market will not simply disappear?

The answer is that initially, the government will indeed buy gold at the parallel market rate. But once the Central Bank accumulates sufficient reserves through these purchases, it will be able to intervene and gradually adjust the exchange rate downward to reflect genuine supply and demand for foreign currency—rather than speculative pressures. This would pave the way for stabilization of the Sudanese pound.

It is also worth noting that Sudan is set to receive a sizable dollar deposit from a friendly country in the coming days, which will help activate and enforce the government’s monopoly over gold trade swiftly and effectively.

—God willing, success will follow.