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U.S. Fiscal Transparency Report on Sudan: a Critical Look

On June 25, the U.S. State Department issued the 2021 Fiscal Transparency Report, which “assessed the fiscal transparency” of 140 world governments during 2020. The assessment of Sudan government covered the first full fiscal year since Sudan’s new civilian-led transitional government assumed power.

On June 25, the U.S. State Department issued the 2021 Fiscal Transparency Report, which “assessed the fiscal transparency” of 140 world governments during 2020. The assessment of Sudan government covered the first full fiscal year since Sudan’s new civilian-led transitional government assumed power.

The main criticism directed to the Sudanese government in the report is the under-reporting and opaque nature of military expenditures and absence of information on revenue generated by military-owned enterprises, which remains off-budget. While military investments are a pivotal concern to national and international actors interested in democratic transition in Sudan, the highlighting of the issue by the State Department calls necessary attention to certain aspects of policy towards Sudan and the nature of its contribution to the country’s ongoing transition.

The current government in Sudan assumed power in August 2019 following the revolution that ousted the dictatorship that ruled the country for 30 years. The change in government was forced by six months of relentless popular protests that climaxed with 58 days of peaceful sit-ins at the doors of the military headquarters. In fourteen Sudanese cities, including the capital Khartoum, the sit-ins raised the slogans “freedom, peace and justice”—these protests were ended brutally with a massacre committed by the state’s security apparatus under the control of the Transitional Military Council (TMC). To quash the sit-in, the junta ended up killing over a 100 protesters in one day. 

Since the TMC assumed power, it has reflected the interests of the regional powers that pushed for it. Regional support by the UAE and Saudi Arabia for the TMC came in the form of three billion dollars in aid immediately after the fall of the previous regime.

U.S. foreign policy towards Sudan during the revolution was best summarized by a top official in Khartoum who stated in August 2019 that “the United States should share the values of Saudi Arabia, Egypt, and the United Arab Emirates” when it came to Sudan, as reported by Foreign policy in August of 2019.

Two years into the life of the transitional government, support by the UAE, Saudi Arabia, and Egypt with Sudan’s junta remains intact, taking the form of financial support from the UAE’s financial support for the “peace” process led by generals who frequently visit Abu Dhabi, Riyad and Cairo.

The power of the TMC is rooted in three elements: 1) its control over state tools of violence—the army, the Rapid Support Forces (RSF), the police, the security apparatus and the national intelligence, 2) regional support with backing by the United States, and 3) profitable enterprises that are owned by the army, RSF, and security forces. The size of these investments is vast:

“Today, the military and security apparatus has shares in, or owns, companies involved in the production and export of gold, oil, gum Arabic, sesame, and weapons; the import of fuel, wheat, and cars; telecommunications; banking; water distribution; contracting; construction; real estate development; aviation; trucking; limousine services; and the management of tourist parks and events venues. Defence companies manufacture air conditioners, water pipes, pharmaceuticals, cleaning products, and textiles. They operate marble quarries, leather tanneries, and slaughterhouses. Even the firm that produces Sudan’s banknotes is under the control of the security sector.”

The economic power of the TMC has grown in significance since assuming control of the country. The balance of power, from civilian vantage point, has been worsening with the precipitous deterioration of the overall economic situation in Sudan. This growing asymmetry of power underscores the importance of ensuring civilian, democratic control and oversight over “military investments” if a democratic and peaceful transition is ever to take place in Sudan.

While the highlighting of military investments by the U.S. Fiscal Transparency report indicates that American interests intersect with those of the Sudanese people in imposing civilian control over the country’s resources, overall U.S. foreign policy towards Sudan paints a very different picture. U.S. contribution to the geopolitical reality in the region continues to strengthen regimes of UAE, Saudi Arabia, Egypt and their TMC allies in Sudan—all which works against this stated goal. The UAE and Saudi Arabia continues to finance the RSF and the Sudanese army in return for soldiers participating in their war in Yemen. The RSF is also specifically empowered by the UAE via its purchases of the militia’s gold outside the regulated Sudanese banking system. This has naturally constrained the capacity of the civilian component of the government to take any meaningful actions in economic reforms, or transitional and criminal justice, especially if they are perceived to threaten the interests of the TMC. If one believes official rhetoric from Washington, there is an interest in ensuring the country does not fall back into military rule. Serious efforts towards stabilizing civilian rule in Sudan must take into consideration the increasing power of the TMC, enabled by allies it shares with American in the region. 

Achieving fiscal transparency is a rather technical process, with political requirements and impact on the balance of power in the country and must be addressed accordingly. This fact is understood by the employees in the National Audit Chamber (NAC) of Sudan who announced their strike on June 14, demanding the body’s independence and investigations into its links with the previous regime. These demands portray a very different reality from that in the U.S. report, which maintains that the NAC “meets international standards of independence…” This very limited and technical understanding of the requirements of real transparency fails to take country’s political context into consideration and fails to address the issue of political and legal capacity of the NAC required to realize its technical functions, the issue prioritized by the demands of NAC employees.

The approach adopted by the NAC employees is one the U.S. administration ought to learn from if it is to make a positive contribution to the democratic transition in Sudan. Just like the country’s NAC, a civilian government in the current setup must be supported to build the political capacity necessary for it to proceed with its technical functions.

The political reality of the Sudanese government and the interests of the regional powers, in alliance with the U.S., clearly display how the current American strategy towards the region undercuts any democratic transition, the capacity of civilian government, or its fiscal transparency requirements. Within this reality, fiscal transparency as well as all other aspects of good governance can only be achieved when the overall political power dynamic is in favor of the parties interested in realizing them. International actors— the U.S. included—who often voice calls for good governance practices in Sudan must reflect that in their relations with national and regional powers involved, especially those with direct interest in undermining the independence of regulatory tools in Sudan. 

Muzan Alneel is a former Nonresident Fellow at TIMEP focusing on people-centric approach to economy, industry, and environment in Sudan.


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