Where Is the Dollar Headed? Urgent Proposals to Rescue the Sudanese Economy

Dr Marwa Fouad Qabbani
The rising dollar exchange rate in Sudan is no longer a passing economic news story or a daily fluctuation in the foreign exchange market. It has become an indicator of the depth of the crisis facing the Sudanese economy and the widening gap between the formal and parallel economies.
Whenever the dollar rises, the purchasing power of the Sudanese pound declines, the prices of goods and services increase, savings are eroded, and the cost of production and imports rises. The country is thus drawn into a vicious cycle: declining production, a shortage of foreign currency, a rising dollar, higher prices, declining purchasing power, and then further demand for dollars.
But the real question is not: where will the dollar end up?
The more important question is: what must we do to prevent the dollar from becoming the principal determinant of the Sudanese economy’s future?
The Post-War Economy Needs a Different Prescription
The Sudanese economy today is not a normal economy facing a temporary exchange-rate crisis. It is an economy emerging from a war that has inflicted extensive damage on productive, banking and service infrastructure, while disrupting trade, transport, energy and supply chains. For this reason, traditional tools alone will not be sufficient.
Sudan needs an urgent economic rescue programme that moves the country from crisis management to recovery management, and from treating symptoms to addressing the root causes of the problem. The foremost of these causes is weak production.
An exchange rate cannot stabilise in an economy that relies more heavily on imports than on production, and the pound cannot regain its strength unless sustainable sources of foreign currency become available.
The Pound Does Not Need Defending; It Needs an Economy to Support It
We need to reconsider how we manage the exchange rate. Administrative measures may calm the market for a short period, but they cannot, on their own, alter the overall trend if the underlying economic causes remain in place.
What is required is management of the foreign exchange market, rather than pursuing the parallel market. This calls for greater transparency in currency prices, narrowing the gap between official banking and parallel-market rates, making foreign currency available to vital sectors, strengthening oversight of speculation and manipulation, and, at the same time, making formal banking channels more attractive to citizens, traders and expatriates. The more efficient the official channel becomes, the less attractive the parallel market will be.
The Dollar Starts with Production
Discussion of agriculture, industry and livestock may appear unrelated to the dollar crisis, but in reality it lies at its very heart. Sudan does not merely need to secure dollars for imports; it needs to generate dollars through exports.
Agriculture, livestock, gold, food processing, manufactured agricultural products and digital services can all become genuine sources of foreign currency. This, however, requires an integrated export policy that begins with the producer and does not end at the port.
Simplifying procedures, providing finance, improving transport and storage, addressing energy problems and facilitating export operations are all measures that can transform Sudan’s resources from untapped potential into genuine sources of foreign currency.
Gold: A Strategic Resource or Fuel for Speculation?
Sudan has significant gold reserves, but the issue is not simply production volume. It is also how much gold enters the formal economic cycle.
Any economic recovery policy should reduce gold smuggling, develop official purchasing channels, encourage producers to operate within the formal system, and improve transparency in production and export data.
Gold can be one of the most important sources of foreign currency. It can also become a source of currency speculation if it operates outside the formal system.
Expatriate Remittances: An Untapped Economic Asset
Sudanese living abroad represent an important economic resource, and their remittances can play a major role in providing foreign currency. However, attracting these remittances cannot be achieved through slogans. Expatriates need a fair exchange rate, fast transfers, low costs, confidence-inspiring assurances, and attractive banking and investment products.
Here, banks and remittance companies can play a pivotal role, particularly by expanding digital services and integrating remittances into electronic payment systems.
Banks at the Heart of the Battle
No economic recovery programme can succeed without a strong banking system. Accordingly, post-war banking sector restructuring must not be limited to increasing capital. It should also extend to asset quality, risk management, governance, liquidity, depositor protection, technological infrastructure and business continuity. What is needed is a banking sector capable of financing the real economy, rather than merely institutions that receive deposits and process transactions.
Restoring confidence in banks is also essential to bringing funds held outside the banking system back into the economic cycle.
Inflation: The Enemy Eating Away at Sudanese Savings
A rising dollar pushes prices up, but inflation, in turn, drives citizens to buy dollars and gold to protect their savings. Thus, a dangerous cycle develops.
For this reason, tackling inflation must be a top economic policy priority. This should be achieved through controlling public expenditure, improving revenues, reducing sources of inflationary financing, increasing production and improving the flow of essential goods.
Banks should also develop savings and investment instruments that help citizens retain their savings within the financial system, rather than converting them into foreign currencies or assets outside the banking sector.
The Digital Economy Is Not a Luxury
Sudan needs to accelerate its transition towards a digital economy that reduces reliance on cash, curbs the parallel economy and improves the efficiency of financial flows.
Expanding electronic payments, connecting banks and payment companies, developing point-of-sale systems and e-commerce, expanding digital wallets and establishing a digital financial identity are all tools that can help increase financial inclusion and improve oversight of financial flows.
The objective is not to eliminate cash overnight, but to build a system in which electronic transactions are easier, faster and more secure than cash transactions.
10 Urgent Recommendations for Economic Recovery
In light of this reality, we should not wait for conditions to improve, but begin implementing practical measures whose results can be monitored and evaluated.
First: Launch an urgent national economic recovery programme
The programme should involve the government, the central bank, commercial banks and the private sector, with clearly defined objectives, transparent performance indicators and regular reviews of results.
Second: Manage the foreign exchange market through a more flexible and transparent mechanism
This should include narrowing the gap between official and parallel-market rates, publishing market data regularly, and strengthening oversight of speculation without resorting to unsustainable administrative solutions.
Third: Make remittances from Sudanese abroad a national priority
Achieve this through competitive exchange rates, low transfer costs, rapid fund delivery, and dedicated savings and investment products for expatriates.
Fourth: Transform gold into a strategic source of foreign currency
This requires combating smuggling, developing official purchasing channels, improving the mining environment, and increasing transparency in production and exports.
Fifth: Launch a national production and export programme
Priority should be given to agriculture, livestock, agro-processing, mining and food industries, alongside facilitating finance and exports and reducing production costs.
Sixth: Rebuild the banking sector on new foundations
This should involve recapitalisation, addressing distressed banks, improving governance and risk management, protecting depositors, and encouraging mergers where economically and prudentially justified.
Seventh: Strengthen public finances and combat inflation
Pursue this through rationalising expenditure, increasing genuine revenues, improving revenue collection, reducing inflationary financing, and aligning government spending with recovery and reconstruction priorities.
Eighth: Accelerate digital transformation and electronic payments
Expand the use of point-of-sale systems, electronic wallets and digital transfers, and connect banking systems in ways that reduce reliance on cash and curb the parallel economy.
Ninth: Protect citizens’ savings and purchasing power
This should be achieved by developing appropriate banking savings and investment instruments, supporting groups most adversely affected by inflation, and raising transparency within the financial sector.
Tenth: Establish an economic recovery operations room
This body should monitor, weekly, indicators covering the exchange rate, inflation, liquidity, exports, remittances, gold, imports, production, and bank financing. It should ensure economic decisions are based on data rather than estimates and impressions.
From a Crisis Economy to a Recovery Economy
Sudan is facing an extremely sensitive economic juncture. Yet major crises can also become turning points if they are managed with a different vision.
What is needed today is not the search for a magic decision that will bring down the dollar exchange rate, but the construction of an economy capable of producing dollars rather than chasing them.
We need to rebuild production, restore exports, attract remittances from Sudanese abroad, regulate the gold sector, reform the banking system, strengthen public finances, expand the digital economy, and restore citizens’ confidence in state institutions and the banking system.
If the economy continues to consume more than it produces, import more than it exports, and rely on the parallel market, the pound crisis will persist, regardless of how decisions change.
But if production, exports and investment become the priority, the economic equation will begin to change.
The dollar is not Sudan’s enemy; rather, it exposes the weaknesses of the Sudanese economy. The question we must ask today is not merely: ‘Where is the dollar headed?’
It is also: ‘When will the Sudanese economy begin to generate the strength that enables the pound to regain its value?’
That is the real battle: the battle for production, confidence and stability.
Strategic Planning and Digital Transformation Consultant

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