Sudan: Gold, War, and the Making of a Shadow State
By Victoria Sainz | 16 November 2025
Summary
Sudan has been engulfed in a devastating civil war since April 2023 between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF), a conflict driven by the struggle between military elites for control over state revenue, which is significantly sustained by the illicit, multi-billion-dollar trade of artisanal gold.
The conflict has solidified militia governance, foreign intervention, and illicit financial networks, transforming Sudan into a fragmented shadow state where sovereignty and formal institutions are undermined by predatory economic systems.
Without coordinated international intervention or transparency in gold trade regulation, Sudan is likely to remain locked in a war economy, deepening regional instability and prolonging humanitarian collapse.
Context
Sudan has been mired in conflict between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF) since April 2023, following the collapse of the transitional government. The confrontation stems from a power struggle between military elites for control over the state’s financial base, primarily gold revenues. Gold has replaced oil as Sudan’s main export, with artisanal mining sites in Darfur, South Kordofan, and the Nile Valley serving as key sources of income for both factions. Most of the gold is smuggled abroad, mainly to the United Arab Emirates (UAE), which absorbs almost all of Sudan’s official gold exports and serves as a financial hub for both the SAF and RSF.
Port Sudan, now the seat of the SAF-aligned administration under General Abdel Fattah al-Burhan, has become a strategic hub due to its Red Sea location and access to global shipping routes. In February 2025, Sudan signed a 25-year agreement granting Russia a naval base in Port Sudan. The conflict has displaced nearly 12 million people, caused widespread famine, confirmed ethnic cleansing in Darfur, and crippled public services. Meanwhile, illicit trade networks continue to flourish, financing armed groups and reinforcing Sudan’s transformation into a shadow state sustained by external patronage.
Implications
Sudan’s conflict has established a political economy defined by fragmentation, predation, and foreign patronage. Politically, the war undermines the notion of a unified Sudanese state, replacing sovereignty with fragmented authority divided between opposing military elites. This state of chronic weakness serves the interests of external powers who benefit from Sudan's division, allowing for easier access to resources and influence. The continued takeover of state institutions by security actors perpetuates a system of militia governance, where public resources (especially gold revenues) are redirected for private gain. The presence of multiple foreign sponsors, including the UAE, Egypt, and Russia, complicates political negotiations and increases the likelihood of prolonged instability. Russia’s naval base agreement further internationalises the conflict, entangling Sudan’s domestic struggles in broader geopolitical disputes.
Operationally, the destruction of essential services and infrastructure has severely weakened state capability. Over 70% of health-care institutions are inoperable, while power outages and damaged logistics systems have disrupted basic services. Despite its strategic importance, Port Sudan suffers from considerable operational inefficiencies, jeopardising trade flows between Sudan and neighbouring landlocked states.
From a security perspective, the militarisation of the Red Sea corridor, as seen by Russia’s naval presence and the entry of weapons from foreign suppliers, risks escalating an arms race and further destabilising the Horn of Africa. Continued atrocities, including ethnic cleansing and systematic sexual violence in Darfur, demonstrate the growing impunity of both the Sudanese Armed Forces (SAF) and Rapid Support Forces (RSF). At the same time, cross-border criminal activity, such as human trafficking and smuggling, broadens the conflict’s reach and threatens regional stability.
Lastly, from an economic standpoint, Sudan’s reliance on conflict gold and external financial hubs perpetuates a predatory war economy. Gold’s liquidity allows both factions to bypass sanctions and sustain their combat operations. State revenues have collapsed by an estimated 80%, pushing communities into deeper poverty under the burden of militia taxation and looting. Consequently, dependence on Emirati financial systems strengthens Sudan’s external vulnerability, allowing foreign patrons to shape internal dynamics for their own strategic and commercial gain.
Forecast
Short-term (Now - 3 months)
Hostilities between the SAF and the RSF are likely to intensify around strategic corridors, including Darfur and Port Sudan. Humanitarian access is highly likely to remain restricted, with famine and displacement almost certain to worsen in consequence. External actors such as the UAE and Egypt are likely to continue indirect support to opposing sides, sustaining the conflict economy.
Medium-term (3-12 months)
Sudan’s state institutions are likely to erode further as militia governance becomes more entrenched. Russia’s naval base construction in Port Sudan is expected to proceed, reinforcing the militarisation of the Red Sea. Sudan's economy is likely to remain dependent on transnational smuggling networks, as the illicit gold trade is highly likely to continue as the primary source of revenue. Regional instability is highly likely to worsen as refugee flows burden Chad, South Sudan, and Egypt.
Long-term (>1 year)
Without external regulatory intervention or a coordinated peace initiative, Sudan risks solidifying into a permanently fragmented shadow state. The country’s economic survival and military presence is likely to create a scenario in which Sudan turns into a strategic arena for rival powers along the Red Sea corridor, deepening regional insecurity.
