Sudan’s cash crisis threatens El Gedaref corn and millet harvest

A severe cash shortage, exacerbated by government-imposed obligations by Sudanese banks to limit money transfers and a daily limit on withdrawals, is putting millions of hectares of vital corn and millet crops at risk. The SDG200,000 ceiling on withdrawals, imposed in reaction to the ongoing liquidity crisis in war-torn Sudan, has saddled farmers with a 20 to 30 percent increase in production costs, while they warn that crop damage could occur if the harvest is not complete by early April, in advance of the rainy season.

In a statement on Wednesday, the committee representing the El Gedaref farmers called on banks to increase the daily limit on cash withdrawals, as farmers are currently having to resort to complicated constructions, which add to costs. Mubarak El Nour, one of the farmers who spoke at the press conference, told Radio Dabanga that farmers are forced to buy sugar, paying through banking applications, and then sell it on for cash, in order to obtain sufficient cash.

El Nour warned that crops will be damaged if they are not harvested by early April when the rains start. He also expressed fears that crops will be burned by workers if their wages are not paid. “The lives of farmers are in danger due to possible clashes with workers over unpaid wages,” he said. “The daily SDG200,000 cash withdrawal limit is not enough to feed a family for one day.”

The farmers demand that bank applications be linked together quickly, and that transfers are increased SDG15 million pounds per day. El Nour points out that while it is possible transfer the necessary SDG15 million pounds through banking applications over several transactions, with fees imposed on each transaction, it is currently not allowed to transfer it in one batch.

The harvest of three million acres planted with sesame, peanuts, and sunflowers has been completed, while seven million acres planted with corn and millet have not been harvested, El Nour says.

Farmers stressed the need to allow the use of banking applications without internet service. El Nour pointed out that the agricultural areas do not have a telecommunications network or internet. Also, most workers do not have smart phones and some do not even have regular phones.

Farmers stressed the need to address the clearing process, noting that stopping the clearing process leads to the inability to make transfers between different banks. El Nour called for the necessity of obligating banks to expand the opening of branches in agricultural localities. He pointed out that six localities in El Gedaref state are devoid of banks.

They also demand that civil registry teams issue identification documents in production areas. “A number of workers do not have identification documents that allow them to open bank accounts. Many of the workers are from South Sudan and Ethiopia, who entered the country with transit permits from the authorities, and are not allowed to open bank accounts.

One of the farmers pointed out at the press conference that the increase in harvest costs due to the scarcity of liquidity leads to a lack of competitiveness. He called for increasing the cash flow in El Gedaref state in order to benefit from the higher productivity.

Currency Exchange Committee Approval

The Supreme Committee for Currency Exchange and Replacement said that it had listened to complaints from some states regarding the lack of liquidity, indicating that the committee had directed the provision of the necessary liquidity to banks to enable citizens to withdraw the agreed upon amounts.

The Minister of Finance said in a press statement following the committee meeting headed by Assistant Commander-in-Chief Lieutenant General Ibrahim Jaber on Tuesday that the committee directed commercial banks not to deal with some groups that deal in an usurious manner. It stressed on the security authorities to take the necessary measures regarding such transactions.

The Committee commended the efforts of banking institutions, the Ministry of Communications and Digital Transformation, and telecommunications companies for their role in facilitating banking operations since the beginning of the replacement process.

New banknotes

In November 2024, the Central Bank of Sudan (CBoS) announced the issuance of a new banknote of SDG1,000 as part of the bank’s efforts to modernise the currency and improve the security standards used in printing money, which contributes to combating counterfeiting and enhancing confidence in the national currency.

Adding to the complexity, civil administrations aligned with the paramilitary Rapid Support Forces (RSF) have banned the new currency, declaring its possession and circulation a crime punishable by law.

The CBoS confirmed that the old banknotes will remain valid, and the process of replacing them will be carried out gradually according to a timetable that will be announced later, in order to facilitate the transition process without affecting the transactions of individuals and institutions.

Commercial banks have been directed to facilitate, in accordance with the bank’s announcement, the process of opening accounts for people who do not have bank accounts, to enable them to deposit old SDG1,000 banknotes and other banknotes, to benefit from banking services, including electronic payment services.

Exchange deadline

Sudan’s Supreme Committee for Currency Replacement has already extended the deadline for exchanging old banknotes.

Complaints have surfaced in eastern states over inadequate access to banking services in rural areas. In Durdeib, in Red Sea state, protesters blocked a national road demanding banking facilities, earlier this week. Authorities responded by sending a mobile banking team to the area.

In Kassala and El Gedaref, residents reported long queues and account opening delays due to national ID verification requirements. Brokers have taken advantage of the situation, charging commissions of five to 10 per cent for exchanging old currency.

Severe liquidity shortages, with banks capping daily withdrawals at SDG200,000, have added to frustrations, triggering price hikes and market stagnation.

The replacement process is limited to areas controlled by the Sudanese Armed Forces. Reports indicate that the paramilitary Rapid Support Forces have prohibited the new currency in their territories, creating a parallel financial system. Observers warn that this divided approach risks deepening Sudan’s already fragile divisions.

Curbs on foreign currency

The Central Bank of Sudan issued a circular trhis week, amending the controls followed in the feeding and use of free accounts in foreign currency. By virtue of this circular, the Bank of Sudan prohibited replenishing free accounts with foreign currency through cash supply. The Central Bank also prohibited the use of customers’ own resources (foreign exchange free accounts) to import goods.

This comes within the framework of the Bank of Sudan’s policies to contain the continuous deterioration of the Sudanese Pound against foreign currencies by reducing the demand for foreign currencies from the parallel market, as described by a large number of economic experts.