October 21 – The Sudanese pound has suffered a steep decline, losing nearly 40% of its value following what traders describe as a de facto flight and shipping embargo from the United Arab Emirates. The disruption has severely impacted Sudan’s gold trade, one of the country’s last remaining economic lifelines amid a protracted civil war.
According to Sudanese officials and market traders, the halt in commercial flights between Port Sudan and the UAE has choked off the flow of gold exports that once provided the Sudanese army with vital hard currency. The UAE had long been Sudan’s primary buyer of gold, serving as a key financial partner even as political and military tensions between the two nations escalated.
Currency in Free Fall
The fallout from the disrupted trade has been swift. The pound, which was trading at around 2,200 per U.S. dollar in July, has now plunged to nearly 3,600 per dollar. Before the outbreak of the civil conflict in April 2023, the exchange rate hovered near 600. This dramatic fall highlights how deeply Sudan’s fragile economy depends on the gold trade, particularly with the UAE, which is one of the world’s largest centers for precious metal transactions.
In early August, the UAE reportedly suspended all commercial flights from Port Sudan, effectively cutting off the primary international trade route for Sudan’s army-controlled territories. The UAE also halted shipping traffic to and from Sudanese ports. These actions, according to aviation and shipping authorities, have caused a drastic reduction in the legal export of gold from areas held by the army, leading to severe foreign currency shortages and further devaluation of the national currency.
The Sudanese government has remained tight-lipped about the issue, while Emirati authorities have previously dismissed accusations from Khartoum that the UAE was supporting the rival Rapid Support Forces (RSF). The strained relationship between the two nations has now evolved into a full-blown economic standoff, with Sudan bearing the heaviest burden.
The Depth of Economic Dependence
Data from Sudan’s central bank indicates that the UAE imported nearly 90% of Sudan’s legal gold exports—amounting to around 8.8 tonnes—during the first half of 2025. These exports generated approximately 840 million U.S. dollars, making gold by far Sudan’s largest source of foreign income. With these revenues, the army-led government financed essential imports such as wheat, fuel, and other strategic goods. However, since the embargo began, residents in army-controlled areas have reported sharp increases in prices for basic commodities.
Sudan’s dependence on the UAE for trade and banking is a result of decades of international isolation. Beginning in the late 1990s, U.S. sanctions made access to the global banking system nearly impossible, forcing Sudan to turn to Gulf states, particularly the UAE, for financial and trade transactions. Dubai Islamic Bank remains the largest shareholder in the Bank of Khartoum, while the Abu Dhabi branch of El Nilein Bank handles a significant portion of Sudan’s government-related financial operations.
The UAE’s well-developed gold refining industry has also been crucial to Sudan’s trade operations. Gold buyers in Dubai frequently offer advance payments to Sudanese suppliers, providing much-needed liquidity to the local market. With those connections now severed, Sudanese traders are struggling to find stable alternatives.
Smuggling and Shifting Trade Routes
Experts say the current restrictions have fueled a surge in gold smuggling across Sudan’s porous borders. Mubarak Ardol, former head of the Sudan Minerals Corporation, estimated that illicit gold exports are at least four times greater than official ones. Both the Sudanese army and the RSF have been accused of participating in smuggling operations, using the proceeds to sustain their military campaigns.
With direct trade to the UAE suspended, much of Sudan’s smuggled gold is now reportedly flowing into Egypt. Analysts, including Suliman Baldo of the Sudan Transparency and Policy Tracker, note that Egypt has emerged as one of the main beneficiaries of the embargo. The gold entering Egypt is often refined or re-exported to the UAE through indirect channels, allowing Egyptian traders to profit from price differences and processing margins.
Attempts to divert trade to other Gulf countries have seen limited success. Sudanese traders have explored markets in Qatar, Oman, and Saudi Arabia, but logistical challenges and limited refining capacity have made those routes unsustainable. While small shipments have reportedly reached Qatar and Oman, most of the gold ultimately finds its way back to Dubai through intermediary buyers.
Mounting Economic Pressure
The Sudanese pound’s freefall underscores the country’s vulnerability to external shocks and its overreliance on a single export commodity. The current crisis has added another layer of hardship for millions already displaced by the civil war and facing acute shortages of food, fuel, and medical supplies. Inflation, already in triple digits, continues to climb as import costs soar.
Economic analysts warn that without a resolution to the trade impasse, Sudan could face a deeper financial collapse. With foreign reserves depleted and limited access to international credit markets, the army-led government has few tools left to stabilize the currency or ensure a steady flow of essential goods.