The conflict in Sudan has already made its mark globally. The US, UK and several EU states have scrambled to evacuate their citizens from the country. Egypt, Ethiopia, South Sudan and Chad are already contending with an influx of refugees fleeing the violence.
With neither the Sudan Armed Forces (SAF) – led by president General Abdel Fattah al-Burhan – or the Rapid Support Forces (RSF) – led by vice-president General Mohamed Hamdan Dagalo (Hemedti) – showing any sign of backing down, a protracted civil war appears increasingly likely.
As the wider ramifications of the conflict begin to tally up, we’ve used data from our suite of political risk indices to look at the countries at risk of being pulled into the war, and what this could mean for regional stability.
In the event of an extended war, the RSF is likely to target oil infrastructure linking South Sudan with Khartoum, as well as the export terminal at Port Sudan. This would deprive the SAF of the revenue it draws from pipeline transit fees, but also disrupt the oil exports of Malaysian, Chinese and Indian operators in South Sudan that are 100% dependent on accessing the global market via Sudan.
This would be bad news for Juba, which bases 90% of its economy on oil exports. Any disruption risks further destabilising South Sudan, which is already the third highest risk African country on our Government Stability Index. An RSF attack on oil infrastructure would therefore likely draw President Salva Kiir’s regime into the conflict on the side of the SAF.
Figure 1: Conflict in Sudan could increase regional political instability
In the event of a prolonged conflict, we expect Chad to take the side of the SAF amid reported tensions between the Chadian government and the RSF. While physical risks to the country’s oil sector will remain low as it is largely located in the west, a potential conflict with the RSF will intensify the country’s downward trajectory on our Resource Nationalism Index (RNI).
President Mahamat Idriss Déby Itno’s desire to expand his executive influence over the oil sector saw him nationalise Western-owned assets in March 2023, and external threats to his regime will incentivise further centralisation of control. Chad is currently categorised as medium risk on the RNI, but we expect it to fall into the high risk category in 2023-Q3.
The conflict is likely to prevent a resolution to Egypt and Ethiopia’s dispute over the Grand Ethiopian Renaissance Dam (GERD). Ethiopia hopes to use the dam to expand electrification, but Egypt views any disruption to the flow of the Nile as an existential threat. Data from the verbal conflict indicator of our Interstate Tensions Index shows that bilateral tensions between the two countries have escalated in recent months, with the pair’s risk rating dropping to medium risk in March, down from low risk as recently as December.
Both sides are already aligned on opposite sides of the Sudan conflict: Egypt is a staunch backer of the SAF and has reportedly deployed airstrikes against RSF positions. Hemedti on the other hand has cultivated a close relationship with Addis Ababa. However, Ethiopian Prime Minister Abiy Ahmed is unlikely to provide the RSF with direct support, as this risks sparking a proxy conflict with Egypt.
Hemedti’s partnership with Russia’s Wagner Group in Sudan’s gold sector is translating into military support for the RSF, which has already received ammunition transfers from Wagner planes operating out of Libya.
This relationship is likely to deepen over the coming six months and will further entrench Wagner’s growing role in the Sahel, where it has deployed mercenaries and become a player in the extractives sector. Closer ties with Wagner, potentially involving the deployment of Russian mercenaries alongside the RSF, risks Sudan’s conflict becoming tied up in competition between the West and Russia.
Conflict to put regional stability to the test
The limited penetration into Sudan’s economy by foreign firms due to years of sanctions imposed by the US on the previous regime led by Omar al-Bashir will reduce the immediate disruption to business caused by the war.
But the war’s wider ramifications, including the destabilisation of neighbouring states, rising resource nationalism and heightened interstate tensions, will have a tangible impact on the business environment for global companies operating in the region.