Currency Replacement in Sudan: Between Economic Reform and the Complexities of Reality

Dr. Marwa Qabbani

In a step aimed at resetting the monetary landscape, the Central Bank of Sudan launched the third phase (April 2026) of its programme to replace the 1,000- and 500 Sudanese-pound banknotes, to be implemented in three states (Khartoum, Gezira, and White Nile). The goal is to curb inflation, rein in the parallel economy, enhance financial inclusion, and restore confidence in the banking sector.

However, this step, which appears reformist on the surface, has collided with a complex reality imposed by the war, given the vast, sprawling distances between east, west, north, and south, and the country’s open land borders with seven neighbouring countries. This has led to varying results across different regions of the country.

Since the launch of the programme (first phase – November 2024, second phase – February 2025), the currency replacement process has been implemented in a limited number of states due to security conditions, covering approximately 7 out of 18 states, or about 40% of the country. In contrast, the majority of states remain outside the scope of implementation, especially those experiencing conflict or located outside government control, creating an unprecedented state of monetary disparity.

This disparity has produced a dual economic reality, where the new currency circulates in some areas, while the old currency, or even foreign currencies, continue to be used in others. As a result, an active black market for money transfers has emerged, charging high commissions, which has increased the burden on citizens and weakened the efficiency of the financial system.

Although the primary goal of the currency replacement is to bring the money supply into the banking system and enhance transparency, the accompanying restrictions – such as difficulties in cash withdrawals, daily withdrawal limits, weak banking infrastructure, a lack of bank branches in all states, and limited staff in operating branches – will place pressure on existing branches and also lead to a slowdown in economic activity, particularly in vital sectors such as trade and agriculture.

In contrast, electronic payment methods have emerged as a partial alternative, helping to sustain daily transactions, especially in urban areas. However, this transition still faces significant challenges, most notably poor internet and electricity services, as well as limited digital literacy in some rural areas.

In this context, attention turns to the expected role of the Ministry of Digital Transformation and telecommunications companies in supporting this transition. These entities can play a pivotal role by launching a package of digital services targeting various segments of society, including those with the least access to traditional banking services.

Among the most prominent proposed solutions is expanding mobile wallet services linked to phone numbers, enabling financial transfers without the need for complex bank accounts. Telecommunications companies can also offer simplified financial services via USSD text messaging to suit areas with poor internet connectivity.

Similarly, agent banking stands out as a practical solution to connect rural areas to the financial system by enabling small shops to offer deposit and withdrawal services. Alongside this, lightweight applications that operate under poor network connectivity and support local languages can be developed to expand the user base.

Another important solution is strengthening the partnership between the government and telecommunications companies to launch digital awareness campaigns that build trust in electronic payment methods and train citizens to use them safely and effectively. We also recommend unifying electronic payment platforms across banks and telecom companies to facilitate transfers and reduce costs, and offering incentives such as fee waivers or digital cash support to encourage citizens to adopt these methods.

Within the framework of future development, the concept of the digital pound (ESDG) emerges as a strategic solution that could help reshape Sudan’s monetary system. This refers to a digital currency issued by the central bank, equivalent to the paper pound, but traded electronically via phones and applications.

The benefits of the digital pound and electronic money include reducing reliance on paper currency, thereby lowering printing, transport, and security costs. It also helps reduce counterfeiting and corruption, as all transactions become traceable and auditable.

Furthermore, the digital pound enhances the efficiency of monetary policy, enabling the central bank to monitor fund flows in real time and make more precise decisions to control inflation. It can also be used to channel government support directly to citizens without intermediaries, reducing waste and increasing fairness in distribution.

Another important benefit is facilitating daily transactions, especially during crises, as payments and transfers can be made quickly and securely, even without traditional banks. It also supports integrating the informal economy into the formal system, thereby broadening the tax base and increasing state resources.

Despite these advantages, the success of the digital pound remains contingent on robust digital infrastructure, cybersecurity, and building user trust in the new system, particularly in an environment facing complex economic and security challenges.
In conclusion, it can be said that currency replacement in Sudan represents a serious attempt at economic reform, but it remains an incomplete project under current circumstances. However, accelerating digital transformation and adopting solutions such as the digital pound could provide a practical way out to reduce the effects of economic division and open new horizons towards recovery and stability.
Strategic Planning and Digital Transformation Expert

Shortlink: https://sudanhorizon.com/?p=12893