Local Development Banks in Sudan: Could They Begin Shifting Economic Power from the Centre to the Periphery?

Nouman Yousif Mohamed
At pivotal moments of national transformation, crises are not merely tests of an economy’s ability to endure; they also become opportunities to rethink the very foundations upon which that economy is built.
Sudan today stands before one of those defining moments. The central question is no longer: How do we restore what once existed? Rather, it has become far deeper: How do we build a new economy that is more equitable and better able to generate opportunities within the states themselves, rather than concentrating them solely in the centre?
From this perspective emerges an idea that may appear simple on the surface, yet carries profound structural implications: the establishment of local development banks in every state across Sudan.
For decades, finance in Sudan has remained excessively centralised in the capital, while the states were relegated to the role of passive recipients rather than active economic actors. Despite abundant resources, significant project potential, and immense human capacity, the missing link has consistently been effective local developmental financing.
Sudan’s history, however, was not entirely devoid of such attempts. One of the earliest and most notable examples was the Sudan Savings Bank during its state-based phase, when it operated from Wad Madani and extended its influence across the central region. The bank contributed to financing education, healthcare, agriculture, industry, and trade.
Later, state-level initiatives such as the Gedaref Bank also emerged, alongside the broader expansion of microfinance institutions, which played an important role in reaching small-scale productive groups, despite weak institutional support and the severe challenges that followed the war.
Yet the central question remains: why did these experiences remain isolated rather than evolve into a comprehensive national model?
The answer lies in the absence of an overarching framework capable of transforming local initiatives into an integrated developmental financial system.
The current proposal is not about establishing another conventional commercial bank. Rather, it calls for a complete re-engineering of Sudan’s philosophy of finance itself.
Local development banks are envisioned neither as ordinary commercial banks nor as small lending institutions. Instead, they are intended to function as state-level economic engines whose primary mission would be:
financing production, regardless of scale, rather than consumption;
financing infrastructure instead of speculation;
supporting value chains rather than short-term activities;
transforming local resources into productive economic power.
One of the most significant features of the proposal is its unconventional ownership structure:
State government: 30%
Private sector: 30%
Cooperatives: 15%
Public investors and expatriates: 25%
This is not merely an administrative arrangement. It reflects a philosophical shift towards a partnership economy rather than an economy of concentration and monopoly.
Perhaps the most powerful element in the model is the integration of Sudanese expatriates as direct development investors. Through purchasing shares, financing exports, investing in specific productive projects, and participating in organised developmental investment instruments, remittances would be transformed from scattered individual transfers into structured financial power capable of driving development within the states themselves.
Sudan already possesses a broad network of state-based microfinance institutions stretching from Gezira to Korofan and Darfur, from Kassala to Red Sea, and from Khartoum to White Nile and Blue Nile. Despite numerous difficulties, these institutions have accumulated valuable experience in reaching producers and vulnerable groups.
The issue today is therefore not whether Sudan should start again from scratch, but rather how to integrate this legacy into a larger, more sustainable developmental banking system.
Indeed, the proposal goes further by suggesting the possible transfer of the assets and liabilities of these microfinance institutions into the new state development banks, thereby creating an institutional leap rather than relying on slow incremental evolution.
At its core, this model represents far more than an increase in the number of banks. It is a proposal to alter Sudan’s economic philosophy fundamentally:
from financing cities to financing states;
from an intermediary economy to a productive economy;
from concentration in the centre to empowerment of the peripheries;
from consumption to production.
The urgency of this proposal stems from the reality that Sudan’s current economic moment no longer permits delay.
The questions confronting the country today are not merely technical but existential:
How can jobs be created outside the centre?
How can internal migration pressures be reduced?
How can dormant productive capacities within the states be revived?
How can natural resources be transformed into value-added within Sudan rather than exported in raw form?
In this sense, establishing local development banks is not simply a new banking project. It is a project aimed at redistributing economic power within Sudan.
What may initially appear to be financial reform is, in reality, a broader attempt to redesign the Sudanese state’s economy from the grassroots up.
The question, therefore, is no longer whether such a model can be implemented. The more pressing question is whether Sudan can continue without it.
Economic history is not written in offices, but in those rare moments when nations decide to redefine the tools through which they shape their future.
Local development banks may well represent one of those moments.

Shortlink: https://sudanhorizon.com/?p=14209