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 Tamanieb on 27 March, and had destroyed Osman Digna's villages, he was directed to leave a garrison in Suakin and withdraw the rest of the troops. Graham was very sore at the decision, and always regretted that he had not taken the responsibility upon himself instead of asking permission to send troops to Berber. He returned to England at the end of April. His despatches on this campaign are to be found in the 'London Gazette' of 27 March, 3, 11, and 29 April, and 6 May 1884. For his services he was again thanked by both houses of parliament, received two clasps to his Egyptian medal, the grand cordon of the Turkish Medjidie, and was promoted to be lieutenant-general for distinguished service in the field, which promotion he chose in preference to a baronetcy offered to him. He met with a warm reception both in London and the provinces, and was presented with a sword of honour by the 1st Newcastle and Durham volunteer engineers, whose inspecting officer he had been for some years.

On the failure of Lord Wolseley's Nile expedition to relieve Khartoum the government determined in February 1885 to destroy the Mahdi. Lord Wolseley was directed to hold the Nile from Merawi to Dongola and Hanneck cataract during the summer and prepare for an autumn campaign, while Graham was sent to Suakin to protect the flank of the Nile column by crushing Osman Digna, and constructing a railway from Suakin towards Berber. Graham's force was composed of both British and Indian troops numbering altogether, including the Suakin garrison, some thirteen thousand men, besides eleven thousand labourers, camel drivers, and muleteers. A contract was made for the construction of the railway under military direction, and Graham's instructions were to destroy Osman Digna's power and push forward the railway as rapidly as possible before the hot weather set in.

He arrived at Suakin on 12 March, and the railway was at once commenced. Osman Digna was at Tamai with a large force, and the enemy also occupied Hashin, where they threatened the right of any advance on Tamai. With some ten thousand men Graham first attacked the enemy at Hashin, stormed the position and dispersed the enemy on 20 March, constructed a fortified post, which he garrisoned, and returned to Suakin.

He next operated against Osman Digna at Tamai, constructing intermediate posts en route. At the first of these zeribas at Tofrik Sir John McNeill was surprised on 22 March by a sudden and fierce attack of the enemy, which, although repulsed, caused a loss of 150 killed, three hundred wounded and missing, and five hundred camels. More than a thousand, however, of the enemy fell, and among them several chiefs. Sufficient supplies of water and stores having been accumulated at the zeriba, Graham moved his force forward on 2 April, and on the following day advanced on Tamai, pushing back the enemy, who gradually withdrew to the mountains. The wells were found dry ; so, having burned the new villages and destroyed large quantities of ammunition found in them, Graham returned with his force to Suakin. The efficiency of his transport arrangements on this march was shown by the return of all the transport animals (nearly two thousand) except three, one of which was killed in action.

Having destroyed Osman Digna's power Graham pushed forward the railway. He occupied Handoub on 8 April and Otao on the 16th, and made successful reconnaissances in advance and into the neighbouring hills, and the railway was constructed for nineteen miles. But the whole position of affairs was suddenly changed. Complications in the East had Caused the government to abandon the proposed advance in the autumn on Khartoum, and to withdraw the Nile expedition. Lord Wolseley visited Suakin in the beginning of May to advise as to the garrison to be left there, and Graham embarked with the guards' brigade on 16 May to return to England.

For his services in this campaign he for a third time received the thanks of both houses of parliament, was decorated with the grand cross of St. Michael and St. George, and had another clasp added to his Egyptian medal. His despatches are to be found in Parliamentary Papers, Egypt (13) 1884, and in the 'London Gazette' of 23 June and 25 Aug. 1885.

In 1888 he declined an offer of the government of the Bermudas. On 14 June 1890, in accordance with the regulations, he was placed on the retired list. He was decorated with the grand cross of the Bath on 20 May 1896, and appointed a colonel-commandant of the royal engineers in 1899. He died, after a few days' illness, on 17 Dec. 1899, at his residence, Springfield, Bideford, Devonshire, and was buried in the parish churchyard there on 22 Dec. His funeral was attended by the mayor and corporation of Bideford and by representatives of the navy, army, and volunteers, besides his own corps and relations and friends.

His portrait was painted for the corps of