The Central Bank of Sudan’s Monopoly on Gold Exports: A Risk-Laden Attempt at Revival

By Muhannad Awad Mahmoud

On 15 September 2025, the Central Bank of Sudan issued a decision banning the private sector from purchasing and exporting gold, reserving the process exclusively to itself or its appointees. Today, 25 September 2025, ten days have passed since the decision. Despite hopes that the step would ease pressure on the foreign exchange market, the Sudanese pound has continued to decline, with the US dollar reaching around SDG 3,600 and the dirham about SDG 975 on the parallel market.

The Bank announced that gold purchases from artisanal miners would be made only in Sudanese pounds. This raises a critical question: will the local price offered by the Bank be attractive enough to persuade producers to deliver officially? Or will the gap with global prices keep the door to smuggling wide open?

The decision ostensibly aims to curb smuggling and boost foreign exchange earnings through direct exports; however, it faces obvious practical challenges. The traditional market that absorbed most Sudanese gold is no longer as easily accessible, prompting the pressing question: what alternative markets could take in Sudan’s exports in the coming phase? Asia? Turkey? Or secondary markets within Africa?

Globally, central banks do not operate as gold traders. Their primary function is to hold gold as a reserve asset to bolster confidence in national currencies and provide backing for foreign exchange transactions. Their sales or purchases are usually limited, tied to reserve management or restructuring, and conducted through other central banks or major financial institutions in declared and transparent deals. Entering into the commercial and regular export of raw gold is not a typical practice for central banks—where it has occurred in some African states under pressure, it has failed to produce sustainable success.

African experiences offer important lessons. In Zimbabwe, the central Bank monopolised gold trade through its arm, Fidelity Printers and Refiners. However, by purchasing at prices below the global rate, miners smuggled production to Mozambique and South Africa, causing official output to fall and smuggling to rise until the government was forced to license the private sector. In Ghana, the state-owned Precious Minerals Marketing Company (PMMC) had exclusive responsibility for purchasing artisanal gold; however, its reliance on below-market pricing and delays in payment led to significant leakage. Reports suggest over 30% of artisanal gold bypassed official channels, flowing instead to Togo and Benin. In the Democratic Republic of Congo, marketing was restricted to state-controlled channels in the mining sector, but opaque contracts and pricing pushed companies and miners to rely on regional intermediaries, resulting in heavy losses to state revenues.

These experiences show that monopoly alone cannot curb smuggling or raise revenues; rather, it may incentivise production flight if fair pricing and transparency are absent. Without those two conditions, the outcome is declining official output and rising smuggling.

In Sudan’s case, the lack of implementation details adds to doubts. Regulations explaining the pricing mechanism, the criteria for selecting buyers, or the disclosure plan for collected and exported quantities and their returns have not been published. The private sector, which previously formed the backbone of the artisanal mining and export value chain, has been excluded entirely: miners are now obliged to deliver to the Bank at prices it sets, exporters have lost their roles in financing, transport, and insurance, and the Bank has yet to prove its capacity to manage this complex system efficiently.

After ten days, the exchange rate has not improved, partly because the export cycle—from purchase to proceeds—is lengthy, and partly because the parallel market still doubts the policy’s ability to yield tangible returns. Everything now hinges on the Bank offering a sufficiently attractive purchase price in local currency; without it, it will fail to collect enough gold to export in the first place.
The unavoidable critical questions remain: when will the first actual export shipment take place? What is the targeted volume? What is the expected dollar return? Will the local price offered by the Bank be sufficient to convince miners to deliver? And which alternative markets will open their doors to Sudanese gold?

In conclusion, the decision may be seen as a bold move to control the country’s most vital source of foreign currency, but it is fraught with risks. Its success depends on two essential conditions: a rewarding local pricing system that ensures miners’ loyalty, and the securing of alternative foreign markets capable of absorbing Sudanese raw gold. Absent these conditions, monopoly will turn from a rescue tool into a new burden, one that strengthens rather than weakens the parallel market.

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