Sudan introduces new banknotes to boost economy

• Published On: 12 January 2025 at 05:06

Sudan's government has issued new banknotes and mandated that the largely unbanked population open bank accounts as part of a strategy to stabilise the country's struggling economy.

The initiative, which was launched in December, aims to nullify funds looted by paramilitary Rapid Support Forces.

Finance Minister Jibril Ibrahim stated that the initiative was successful, but did not provide specific figures for the number of Sudanese pounds deposited.

Sudan has been embroiled in a two-year conflict between the army and the RSF, which has devastated the economy, devalued the currency by three-quarters, and left half of the population starving.

Ibrahim stated that the government's move has significantly increased bank deposits. "This helps the banking sector, and when you help the banking sector, that helps the state to finance projects, including the war effort and productive activities," Ibrahim told Reuters during a recent interview.

To obtain the new 500-pound and 1,000-pound banknotes, Sudanese citizens must deposit their old notes in banks, with daily withdrawal limits in place.

This move aims to bring funds from the large unbanked population into the formal financial system.

Since the conflict began, RSF soldiers have looted several banks and hampered agricultural activities, making it difficult for the army-backed government to pay salaries and provide basic necessities like medicine.

Ibrahim stated that Sudan produced 64 tonnes of gold last year, with roughly half of it officially exported.

He concluded that this indicates that the proportion of looted gold in army-controlled areas has decreased.

Residents of RSF-controlled areas continue to use old currency, electronic transfers, US dollars, and, in some cases, Chadian rials.

In Port Sudan, the army's wartime capital, some residents have protested the new banknotes.

Traders have reported a decrease in sales because many people still lack the identification documents required to open bank accounts and smartphones for online transfers.

"We have deposited all of our capital in the bank. They will not give you cash if you need it later. "You could spend the entire day to get 50,000 pounds ($20) or 100,000 pounds ($40)," said fishmonger Ali Moneeb.