Military win economically unviable for either side in Sudan war

The economics of a delusional military solution in Sudan

Prof. Mekki El Shibly
Executive Director – Mamoun Behairy Center, Khartoum

As Sudan’s conflict enters its third year, with both warring parties clinging to a military solution, it has become critical to unpack the economic dimensions of such a path for each side, and to understand its implications for peace prospects and the future of the civilian movement and political actors. Evidence suggests that both the projected Port Sudan government (aligned with al-Burhan) and the Nairobi-based government-in-waiting (aligned with Hemedti) face suffocating economic outcomes, should either manage to achieve a military victory, however elusive.

This is because the anticipated outcome of the conflict involves more than just military triumph; it encompasses the loss of legitimacy, the imposition of international sanctions, revenue shortfalls, and the collapse of productive sectors.

The economic consequences of an illusory SAF victory scenario

Should the Sudanese Armed Forces (SAF) achieve a military victory, the resulting government would depend on a collapsed public budget, fueled only by scant official revenues, primarily port duties, limited taxation, and military-owned enterprises. Gold production is inefficient and rife with corruption due to weak oversight and natural resource governance. Moreover, the physical destruction caused by a military campaign to reclaim Khartoum would cripple key economic hubs and eliminate a significant portion of the state’s tax base.

Military victory would also come at a tremendous financial cost—funding for troops, militia mobilization, weapons imports, and military logistics, placing immense strain on already scarce resources. These pressures might lead to foreign obligations that could undermine national sovereignty. On top of this, the military would face an acute crisis in delivering basic services like electricity, water, healthcare, and infrastructure, which are vital to any form of economic activity.

Internationally, the Port Sudan government, which is backing the SAF, lacks recognition from financial institutions, barring it from loans and foreign investment. Western sanctions further restrict access to Sudanese state assets frozen abroad. In terms of trade, the military path would devastate both domestic and foreign markets due to insecurity and war-related disruptions. Declines in agricultural and industrial output would reduce exports and raise commodity prices, with fuel shortages and soaring transport costs stifling commerce.

The economic repercussions of a precarious RSF triumph scenario

In the case of a Rapid Support Forces (RSF) victory, their economic model would rely heavily on shadow economies—gold mining, looting, extortion, and possibly external unofficial backing through regional smuggling networks. Their decentralized structure of RSF, however, allows many units to self-finance using resources from their territories of control, somewhat mitigating the pressure on the strained budget..

Nonetheless, the RSF would face severe challenges. The lack of international recognition means it would be excluded from credible international financing or investment. Sanctions have already targeted its financial networks, complicating external transactions. With limited experience in governance, the RSF would struggle to provide services nationwide due to scarce resources, weak infrastructure, and insufficient administrative capacity, making logistics costly and inefficient. Additionally, securing the local economy would prove difficult amid widespread insecurity and the collapse of state institutions, effectively stifling organized economic activity.

Shared SAF and RSF economic challenges of a military solution

Both SAF and RSF would face monumental challenges in the aftermath of an elusive military resolution:

• Currency Collapse: The Sudanese pound has lost over 350% of its value, fueling hyperinflation and public discontent.
• Macroeconomic Decline: After two years of war, inflation exceeds 400%, unemployment has hit 45%, GDP has shrunk by approximately 41%, and public revenue has dropped by 75%. The tax effort (tax-to-GDP ratio) now stands at a mere 2%, down from only 5% before the war.
• Production Halt: Insecurity and widespread arms have deterred investment and wrecked production sectors, especially agriculture, already ravaged by displacement and violence, deepening food insecurity.
• Banking Collapse: Looting and destruction of banks have forced financial transactions into the black market, crippling trade and investment.
• Trade Isolation: Sudan’s trade partners would hesitate to engage with any victorious party given the political and economic volatility.
• Public Trust Erosion: Any victorious party would suffer from a severe crisis of legitimacy, as its pursuit of power overshadows economic reform efforts.
• Infrastructure Destruction: Electricity grids, water systems, roads, schools, hospitals, and state institutions have all collapsed, posing serious barriers to service delivery.
• Foreign Debt: Sudan’s external debt exceeds $62 billion, mostly arrears, posing a major hurdle to reconstruction and requiring sustained global engagement.
• Humanitarian Catastrophe: A military victory would leave behind an unprecedented humanitarian crisis—mass displacement, shortages of food, water, and medicine, and collapsing health systems—all demanding vast resources unavailable to any current warring party.
• International Isolation: A military regime would face global isolation, continued sanctions, and denial of critical financial aid, grants, or debt relief, further impeding recovery and deepening mistrust at home and abroad.
• Political Instability: Ultimately, the winning side may find it nearly impossible to govern a fractured and volatile country.

Conclusion

The bleak economic outcomes of a delusional military victory for either side point to an unavoidable truth: a negotiated settlement is not only less costly but also the only economically viable option. The logic of “breaking the adversary” is bankrupt in a context where every party stands to lose more through war than it can gain. The decision to pursue peace must go beyond narrow military calculations and be rooted in sound economic reasoning. Both the SAF and the RSF must understand the political economy and the dimensions of the consequences of war, and the risks it entails, before rushing lustfully toward an elusive, mischievous military solution that would have disastrous consequences for both of them.