Sudan’s Customs Dollar: A Decision Chasing the Dollar or Chasing the Citizen?

Dr Al-Sadiq Ali Haj Al-Sheikh
In Sudan, the dollar is no longer merely a green note used to move goods through ports and markets, nor simply a figure that fluctuates on the screens of banks and bureaux de change. It has become a mirror reflecting the economy’s confusion, citizens’ anxieties, the movement of trade, and the burden of war on a state trying to hold onto the threads of its economy while weathering the storm.
When the customs dollar rises, it does not merely increase as a figure in an accounting ledger. Its effects spread from the customs gate to the importer, from the importer to the trader, and from the trader to market shelves, eventually reaching the consumer, who discovers that the pound in their hand now buys less than it did yesterday.
But behind this economic picture lies a deeper question that should not be lost amid the clamour of rising prices: can increasing the customs dollar bring stability to the currency, or is it merely an attempt to collect revenue from an economy exhausted by war? Where does the state’s legitimate right to manage its resources end, and where do the limits imposed by law begin?
In a stable economy, each financial instrument may have its clearly defined role. In a wartime economy, however, the threads become intertwined: the Ministry of Finance seeks revenue; the central bank seeks currency stability; Customs seeks to collect the state’s dues; the importer wants to keep their business going; and the citizen wants to find goods at prices they can afford.
Amid these interlocking circles stands the Sudanese pound, like a small boat in a turbulent river. It is not enough to watch the water level rise; we must ask where the water is coming from, which way the current is flowing, and whether the boat itself is seaworthy.
The Customs Dollar and the Exchange Rate: Two Different Concepts
First, it is essential to distinguish between the exchange rate and the customs dollar rate. The exchange rate lies at the heart of monetary policy and foreign exchange management, matters that are primarily associated with the responsibilities of the Central Bank of Sudan under the Central Bank of Sudan Act 2002 and its amendments.
The customs dollar, by contrast, is a rate customs authorities use to value imported goods and calculate the duties and taxes payable on them. Accordingly, raising the customs dollar does not, in legal terms, mean that the state has established a new dollar rate in the market. Economically, however, it may produce a similar result, because it increases the value in pounds on which import-related duties and charges are calculated.
This is where the problem begins. If the customs dollar is raised repeatedly while the economy continues to suffer from a foreign-currency shortage and a widening gap between official and parallel-market rates, the decision may shift from a valuation tool to another factor driving up import costs and prices.
The Law: Where Does the State’s Authority Begin and End?
From a legal perspective, the discussion surrounding the decision should not revolve around a single question: does the state need revenue?
The answer is clear: yes, particularly in the face of war and the immense pressure on state resources.
But the more important legal questions are: does the authority that issued the decision have the necessary jurisdiction? What legislative basis supports it? And did it follow the required legal procedures and formalities?
The Central Bank of Sudan Act 2002 and its amendments constitute one of the principal legal frameworks governing currency and monetary policy. The Banking Regulation Act 2004, meanwhile, regulates important aspects of the banking system, banking activities and their supervision.
The customs dimension relates to customs and tax legislation, regulations, and decisions issued by the competent authorities.
Here, a simple but fundamental principle must be emphasised: a decision must not only benefit the public treasury to be legally sound. It must be issued by the competent authority, through the correct legal instrument, for a legitimate purpose, following proper procedures, and without exceeding the effect permitted by law.
This brings us to overlapping jurisdictions.
The Ministry of Finance seeks revenue and budgetary financing; Customs collects the prescribed duties; and the central bank performs functions relating to monetary policy and foreign exchange management.
Consequently, turning the customs dollar into an indirect instrument for managing the exchange rate may raise questions about the decision’s legal and economic characterisation.
Is the Customs Dollar a Disguised Tax?
This point deserves a more candid discussion. When the dollar rate used for customs valuation rises, the value in pounds on which the relevant import duties and taxes are calculated also increases.
If a commodity is imported at the same dollar price but the customs dollar rate rises, the importer pays higher duties in pounds, and the increase is often passed on to the commodity’s price.
The customs dollar can therefore become, in economic terms, a lever for increasing the financial burden on imports, even if the decision is not described as introducing a new tax.
The criterion here should be transparency: how much additional revenue will be generated? What will be the impact on prices? And what potential harm might result for production and essential imports?
Sound public policy measures a decision’s success not only by what it brings into the treasury, but also by what it does to the economy as a whole.
What Does Sudan’s Previous Experience Tell Us?
Sudan has passed through this cycle before.
The economy suffered from multiple exchange rates and a widening gap between official and parallel-market rates. However, the 2018 experience offered an important lesson.
At the time, the Central Bank of Sudan introduced measures to improve the flow of foreign currency through official channels, encourage banks to attract export proceeds, regulate the gold market, and direct foreign currency toward essential goods and production inputs.
The result was a significant narrowing of the gap between official and parallel-market rates.
Then came the 2021 reforms, which moved toward unifying exchange rates closer to the market rate.
The lesson is not that Sudan should reproduce the 2021 model word for word; current circumstances are entirely different because of the war.
The more important lesson is that currency stability is not created by an administrative figure alone. The economy creates it through its ability to generate foreign currency, confidence in the banking system, and the flow of exports and remittances.
Where Does the Problem Lie Today?
The real problem is not the dollar alone. It lies in the relationship between dollar supply and demand.
The war has weakened production, disrupted parts of the agricultural, industrial and commercial sectors, and affected transport routes and supply chains.
At the same time, Sudan needs to import food, medicine, fuel, production inputs and spare parts.
In other words, we face a difficult equation:
High demand for foreign currency + limited supply + damaged production + affected exports + a large informal economy = continuing pressure on the pound.
Under these circumstances, raising import costs does not address the root cause. It may instead aggravate it if it raises prices, reduces the pound’s purchasing power, and increases demand for dollars as people seek to protect themselves against further depreciation.
Can Raising the Customs Dollar Solve the Exchange-Rate Problem?
The direct answer is no, not in itself.
The decision may increase the state’s revenue in pounds, but it does not create a single new dollar.
It does not increase exports, raise gold production, attract remittances from Sudanese abroad, or restore confidence in the banking system.
Using the customs dollar to address the exchange-rate crisis is like treating the effects of an illness without addressing its source.
The decision may be financially beneficial, but it is not a monetary remedy.
The state must therefore place each instrument in its proper role.
A Wartime Economy Does Not Abolish the Rule of Law
Some may argue that Sudan is at war and that the state needs urgent resources; consequently, economic decisions cannot be subjected to the same standards that apply in peacetime.
War creates exceptional circumstances and necessities.
But economic necessity does not abolish legal legitimacy.
Indeed, a wartime economy requires greater legal clarity, because exceptional decisions directly affect citizens’ lives and their financial and commercial interests.
Accordingly, exceptional economic decisions must have a clear legal basis, a defined impact, be publicly announced, remain open to review, and be proportionate to the purpose for which they were issued.
The state needs revenue, but citizens, traders and investors also need legal certainty.
Direct Recommendations
If Sudan is managing a wartime economy, it needs not a solitary decision, but a clear, measurable short-term monetary, fiscal, and customs plan.
I propose the following:
Temporarily suspend repeated increases in the customs dollar until a clear, publicly announced mechanism for determining it is established.
Legally and operationally separate the customs dollar from the exchange rate, and refrain from using the former as a concealed instrument for managing the value of the pound.
Publish the legal basis, the competent issuing authority, the effective date and the implications of the decision in terms that leave no room for ambiguity.
Establish a joint mechanism involving the Ministry of Finance, the Central Bank of Sudan and Customs to assess the impact of any proposed adjustment on inflation, the exchange rate and commodity prices before it is introduced.
Protect food, medicine and production inputs from customs burdens that increase the cost of living and production.
Provide exporters with genuine incentives to channel export proceeds through the official banking system rather than driving them towards the parallel market.
Regulate gold exports and combat smuggling while providing incentives that make official channels more attractive.
Attract remittances from Sudanese abroad through a flexible banking system, a realistic exchange rate and straightforward procedures.
Manage imports by priority rather than through arbitrary restrictions, giving precedence to food, medicine, fuel, and production inputs.
Gradually narrow the gap between official and parallel-market rates, as this gap encourages speculation and smuggling.
Control budget-deficit financing so uncontrolled monetary expansion does not put further pressure on the pound.
Subject economic decisions with significant financial implications to prior legal review to ensure that the issuing authority, legal basis, form, purpose and proportionality are sound.
Set time limits for exceptional decisions and review them periodically, so that a temporary wartime measure does not become a permanent policy.
Publish clear performance indicators covering the gap between exchange rates, export proceeds, official remittances, inflation and the financing of essential imports.
Five Urgent Priorities
If all of this is to be condensed into five steps, the priorities should be:
First: Halt repeated adjustments to the customs dollar and establish a publicly announced rule for determining it.
Second: Gradually narrow the gap between official and parallel-market rates.
Third: Increase the supply of dollars through exports, gold and remittances, rather than focusing solely on reducing demand.
Fourth: Protect food, medicine and production inputs.
Fifth: Subject exceptional economic decisions to prior legal and economic review, with their objectives, duration and success indicators clearly defined.
Conclusion
Ultimately, the dollar in Sudan is more than an exchange rate, and the pound is more than a monetary unit. Both have become symbols of an economy struggling to remain standing amid the winds of war.
There is nothing wrong with the state seeking to secure its revenues when the treasury is bleeding, nor with the Ministry of Finance trying to balance revenue and expenditure. But the danger begins when increasing burdens becomes the easiest course of action, while the avenues for production, exports and foreign currency grow narrower by the day.
Customs can collect money, but it cannot create dollars. An administrative decision can change a figure on paper, but it cannot, on its own, change market rules. The law can grant the state authority, but it also sets boundaries for that authority, preventing necessity from becoming the rule and exception from becoming a permanent practice.
Sudan’s previous experiences have shown that the currency’s rhythm can calm when export proceeds flow through official channels, when the gap between the two markets narrows, and when those with money feel the banking system is safer and more worthwhile than the parallel market.
The real battle, therefore, is not against the dollar itself, but against the factors that make dollars scarce, the pound weak, and the parallel market stronger than the official one.
If a wartime economy requires the state to make difficult decisions, wisdom dictates that those decisions should resemble precise surgery: treating the site of the disease without increasing the body’s bleeding.
Sudan does not need to chase the dollar from street to street, nor to pursue its price every morning with a new decision. Rather, it needs to restore the dollar’s natural path into the state’s coffers, return some of the confidence the pound has lost, and make the law a protective umbrella for necessity, rather than something absent from it.
When production returns to the fields and factories, when exports find their way abroad, when gold proceeds and remittances return to the banking system, and when the law is clear and decisions are predictable, only then can the pound begin to regain some of its health, and the wartime economy move from mere survival towards the beginning of recovery.
The currency’s rhythm cannot be brought into balance by a single decision; it can only be restored by putting the entire system in order.

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