Resource Partnership, Not Power-Sharing: The Institutional Engineering of Productive Federalism

Dr Al-Haytham Al-Kindi Yousif

Sudan’s prolonged crises and civil wars have long been tied to a structural imbalance: the dominance of financial centralisation in Khartoum, met by the regions’ persistent struggle to secure a share of power. Although several attempts were made to address this imbalance, the flawed diagnosis of the problem confined reform to political settlements, the distribution of ministerial portfolios, and the governance of regions through local elites or armed movements. The result was merely the reproduction of the “rentier state” at the regional level, with state capitals turning into miniature versions of Khartoum, where resources were spent on political spectacle and constitutional appointments rather than on development.
The transition towards a “state of value” requires a radical shift in concepts — moving from political federalism, built on the distribution of positions, to economic federalism, built on resource governance and cross-regional value chains.
It has become increasingly evident that Sudan’s unity cannot be protected by fragile agreements, but rather by mutual material interests that make secession an act of economic suicide for any region. To understand this, we must examine how economic integration across Sudan’s diverse regions can be structured to reinforce national unity. We must also propose the institutions responsible for managing resources and explain how all of this can be linked to a genuine form of economic federalism.
We propose that the institutional framework of the “state of value” should primarily consist of three pillars: a Sovereign Wealth Governance Commission, Regional Investment Funds, and a Compensation and Development Balance Fund. The aim is to protect regional resources from both central encroachment and the ambitions of armed movements and regional elites. Our proposal seeks to institutionalise governance through mechanisms subject to strict oversight and clear laws.
1. Sovereign Wealth Governance Commission
This would be a technically independent body, not directly subordinate to either the Council of Ministers or the Sovereignty Council, but rather accountable to a general assembly composed of experts and regional representatives, selected by regional parliaments according to defined criteria.
Its mandate would include cataloguing all strategic resources — including gold and minerals, ports, land and agricultural products, and livestock — while determining the share of deductions allocated to the central government for sovereign services such as defence, foreign affairs, and the central bank. This central share should not exceed 25%, while 70% of revenues should remain in the producing region through investment channels rather than consumption spending. The remaining 5% would be allocated to the Development Balance Fund.
2. Citizen-Owned Regional Investment Funds
The practical model here goes beyond traditional state-owned enterprises and investments towards publicly owned shareholding companies. A sovereign fund would be established for each region — for example, a River Nile and Northern State Gold Fund, a Kordofan Gum Arabic Fund, a Darfur Livestock Fund, an Eastern Sudan Ports and Logistics Fund, and a Central Sudan Agriculture and Agro-Industrial Fund.
These funds would convert 40% of ownership in resource projects — such as gold mines, irrigation and agricultural schemes, industrial ventures, and electricity generation projects — into shares directly offered to the region’s citizens, ensuring that every household benefits.
The practical impact of this approach would be transformative: citizens would move from merely demanding development to becoming shareholders awaiting annual dividends in their bank accounts. Such a model would deprive armed movement leaders and regional governors alike of the ability to monopolise resources, because attacking the resource would become equivalent to attacking the citizen’s own financial interests.
3. Compensation and Development Balance Fund
Some regions or states may lack major strategic natural resources such as gold, oil, or extensive agricultural wealth, while still carrying significant demographic weight or providing sovereign services. If gold- and agriculture-rich regions retain 70% of revenues, severe developmental disparities could emerge between extremely wealthy and impoverished regions, threatening social stability.
To ensure the success of this model of economic federalism, there must therefore be a Compensation and Development Balance Fund to reduce economic disparities between regions. We propose allocating 5% of national resource revenues to this purpose.
We have previously argued that the immune system of the “rentier state” is bureaucracy and committees. The solution is not merely replacing corrupt officials with honest ones, but rather removing the human element from areas of direct financial contact.
Accordingly, we propose the creation of a Unified Digital Governance Platform through which all transactions — including mining contracts, export and import licences, allocation of investment land, customs collection, and taxation — are converted into fully digital contracts. This would eliminate the discretionary power of officials and ministers to grant customs exemptions or investment privileges, which historically have served as gateways to corruption and patronage. Investors would submit applications digitally, which would then be matched through predefined algorithms, while payments would be transferred directly to regional funds or the central bank without human intermediaries.
Naturally, such technological transformation would require substantial institutional and legal reforms, as well as the development of the necessary infrastructure.
Gold Governance and Transparent Supply Chains
With regard to gold, we propose linking production to a transparent digital tracking system that monitors supply chains from extraction to export. This would reduce smuggling, which currently fuels warlords and entrenched elites. Furthermore, building strategic gold reserves would strengthen the national currency and contribute to price stability, particularly if producers are offered fair prices that remove the incentive to smuggle.
More importantly, the gold sector itself must be reorganised. Mining companies should operate as public shareholding enterprises jointly owned by the state and ordinary citizens, while allowing foreign investors to participate. Informal artisanal mining should gradually be transformed by organising miners into local production cooperatives holding shares in regional funds.
Land ownership and traditional hawakir systems must also be addressed through careful legal regulation that preserves community rights while supporting the broader vision of resource-driven regional development. This issue is sufficiently important to merit a separate discussion.
Cross-Regional Productive Integration
A complete vision also requires the creation of what may be termed a “Cross-Regional Productive Integration Matrix” — essentially a model of interconnected value chains. If economic unity is to become the guarantor of security and prosperity, Sudan’s geography must be linked through mutual economic interests such that dismantling the state becomes economically disastrous for all parties.
A practical example could be the livestock and meat-processing value chain:
Darfur and Kordofan cannot maximise the value of livestock by exporting live animals, any more than Eastern Sudan can survive solely on port fees. Real integration would operate as follows:
Production and livestock rearing (Western Sudan): scientific livestock breeding and fattening financed through the Western Regional Investment Fund.
Industrial processing (Central Sudan – Gazira, White Nile, and Sennar): establishment of large-scale modern slaughterhouses, meat canning facilities, and advanced leather-processing industries. This would create thousands of jobs while adding substantial value to raw materials from the west.
Transport and logistics (Eastern Sudan): refrigerated transport networks and dedicated railways linking production zones to modern export and cold-storage facilities in Port Sudan and Suakin.
Financial services, research, development, and international marketing (Khartoum): leveraging central state institutions for diplomacy, foreign investment attraction, technology transfer, trade promotion, exhibitions, market access, training, and research.
Under such a model, if Western Sudan sought separation, it would lose its industrial infrastructure, export markets, and maritime outlets. Likewise, if Eastern Sudan closed the ports, it would disrupt the financial lifeline generated by exports from the west and centre. This is what I describe as “interdependent economic federalism”.
Economic Reintegration Instead of Militarised Settlements
One of the greatest flaws of previous security arrangements involving armed movements was the superficial military integration of fighters into ranks and positions within the army, while their leaders continued seeking financial influence through control over border crossings and strategic assets.
The alternative approach should focus on “economic disarmament and reintegration”. This could be achieved through public security shareholding companies tasked with protecting strategic infrastructure such as pipelines, railways, and mining areas, under state supervision and staffed by demobilised former fighters after the surrender of heavy weapons.
At the same time, portions of regional investment funds should be allocated to financing collective agricultural and industrial ventures for former combatants, ensuring that their personal financial interests become tied to regional stability and economic growth rather than to continued insecurity.
When a former fighter realises that the stability of a mine or railway line secures him a decent salary and provides shares for his family in the regional fund, his loyalty to warlords who thrive on chaos will naturally fade.
Sudan does not need yet another constitutional document drafted behind closed doors merely to redistribute positions. What it truly needs is a productive national compact that clearly declares power to be a servant of production rather than a spoils system to be divided.
A path grounded in digital institutional governance, popular investment funds, and interconnected value chains is the only route capable of transforming Sudan’s diversity from a security burden into an economic engine — and this is the essential first step towards building a genuine “state of value”.

Shortlink: https://sudanhorizon.com/?p=14023