The Central Bank of Sudan has announced a new five-year strategic plan, spanning from 2026 to 2030, aimed at conducting a comprehensive review to reform and enhance the capacity of the banking sector and financial institutions. The plan, prepared in December and published on the bank's official website, seeks to address the challenges facing the sector, develop banking systems, and improve governance and oversight. This effort is part of the central bank's initiatives to promote financial stability, improve the efficiency of the banking system, and adapt to economic changes.
The strategy faces significant challenges, including the central bank's inability to control the large amount of cash outside the banking system, which accounts for approximately 98% of the total money supply. Additionally, the bank struggles to manage the exchange rate of the Sudanese pound. The ongoing conflict, which began on April 15, 2023, has also impacted the banking sector, leading to a decline in capital and the loss of branches in areas under the control of the Rapid Support Forces.
The strategy not only focuses on restructuring but also includes a shift towards accelerating digital transformation within the Central Bank of Sudan and the banking sector. This aims to improve operational efficiency and create a more favorable environment for innovation in banking services and operations. According to financial expert Omar Siddig Ahmed, the five-year plan represents a necessary step to organize monetary and banking work during the conflict and recovery phase but requires a more flexible and realistic approach.
Ahmed highlighted that the plan includes essential components covering monetary and financial stability, governance, internal and external relations, financial inclusion, digital transformation, and reform of financial institutions. While these components align with Sudan's economic needs, especially during the conflict, the main challenge lies in the plan's potential to become a general document if not linked to specific executive programs, clear budgets, and verifiable indicators.
The expert identified key areas of strength in the plan, including a five-year vision providing a clear reference for the central bank's actions and prioritizing monetary stability. He emphasized the importance of governance and institutional excellence as conditions for improving performance and restoring confidence. Ahmed also suggested including financial inclusion in the plan's objectives to support affected groups and displaced persons.
However, Ahmed pointed out several weaknesses and risks, including the broad scope of the plan's objectives compared to available resources and the unclear prioritization between emergency and long-term recovery and reform goals. He stressed the need for a flexible plan that can be reviewed periodically based on developments in the conflict, economy, and external relations.
As part of an alternative plan, Ahmed proposed a 12-month emergency program focusing on rescuing the banking system, annual executive programs with specific projects, costs, and responsibilities, and quarterly operational plans that can be adjusted. He recommended adopting three possible scenarios and establishing a unit within the central bank to monitor implementation and provide regular reports on progress and challenges.
Key points
- The Central Bank of Sudan's five-year strategy aims to reform and strengthen the banking sector but faces significant challenges, including a large amount of cash outside the banking system and difficulties in managing the sector due to ongoing conflict.
- The strategy includes essential components covering monetary and financial stability, governance, and digital transformation but requires a more flexible and realistic approach to address Sudan's economic needs.
- Financial experts emphasize the importance of prioritizing monetary stability, governance, and financial inclusion in the plan and propose an alternative plan with a 12-month emergency program and quarterly operational plans.
