Today marks 600 days of war in Sudan – a war that has generated what the UN calls “a freight train of suffering.” Even as ongoing crises in Ukraine and Gaza draw more international attention, Sudan has become the site of a declared famine and the world’s largest current displacement crisis. While international attention remains focused elsewhere, the crisis in Sudan demands immediate action. Strengthening the financial sector’s capacity to deliver humanitarian aid could play a pivotal role in mitigating hunger and suffering.
In much of the country, food is still available, but people have run out of money to buy what they need. With men harmed or recruited by armed groups, women and girls are left to fight hunger with deteriorating survival strategies. Skipping meals is widespread, and children’s hunger is sometimes treated with water alone.
Sudan’s mutual aid groups use cash transfers to respond first in hard-to-reach famine-affected communities. But scaling up cash transfers relies on a trusted currency and functioning financial institutions. Funders and international actors have a critical role to play in protecting the remaining reservoirs of financial system functionality to curb further suffering and hunger in Sudan.
Funders and international actors have a critical role to play in protecting the remaining reservoirs of financial system functionality to curb further suffering and hunger in Sudan.
What is happening in Sudan today?
The conflict has divided Sudan into clearly demarcated zones held by the Sudanese Armed Forces (SAF), the Rapid Support Forces (RSF), or other armed actors. Civilians in RSF-controlled areas are experiencing the most severe impacts of the conflict. Intense fighting, market disruptions, and weaponization of food aid have contributed to famine in Northern Darfur. People with resources are fleeing these hardest-hit areas, heading to calmer regions, or seeking asylum in countries facing their own challenges, including Chad and South Sudan.
What’s left of Sudan’s financial system?
Even before the war, Sudan’s baseline for financial inclusion was low and uneven: just 15% of Sudanese had access to an account, and places like South Darfur state (roughly the size of Austria and home to over 3 million people), lacked any commercial bank branches. The war created new challenges for Sudan’s financial sector, including depleted foreign exchange reserves as demand for imports has increased, and a Sudanese pound that has declined in value by more than two-thirds against the USD since September 2023. Currency printing has only recently been reinstated and a recent plan to retire old currency notes is raising concerns that those without access to bank accounts or branches will suffer. Lessons from other fragile contexts like Yemen have demonstrated the challenges of currency changes amidst conflict, with negative impacts on food security and livelihoods.
Most of Sudan’s currency is now circulating outside of the banking sector. Banks often require weeks to gather liquidity for emergency cash distributions to support famine response. The Bank of Khartoum’s Bankak app continues to offer a bright spot, facilitating over 50 million transactions since the start of the war. However, this often comes with surcharges of up to 20% collected by agents at withdrawal. The success of Bankak is driving interest in opening accounts even amid the conflict in places like Khartoum.
In RSF-controlled areas in the West, including famine-affected Darfur, delivery channels are largely informal and dominated by smaller actors. Solutions like Bankak that work elsewhere in the country are held back by limited access to power, connectivity, and IDs or ID numbers (a requirement to open an account). Hawala networks and traders continue to provide remittances and extend credit as they have for centuries. They are also helping to deliver humanitarian cash.
The financial sector has an essential role in famine response and needs to be bolstered
Both formal and informal providers are working under difficult circumstances to maintain their provision of financial services. These tools are being used in famine response efforts by facilitating local retail purchases, enabling cross-border remittances, and offering a channel for humanitarian cash transfers. However, all these channels combined offer only a fragment of what Sudan requires to address a growing hunger crisis. Additionally, new currency exchange directives may further constrain coping and response strategies for the unbanked.
While 100 million USD in humanitarian cash assistance is expected to be delivered by the end of the calendar year, its effective delivery depends on leveraging and strengthening Sudan’s financial sector. Here’s what funders and international actors can do to help ensure Sudan’s financial sector is up to the task of supporting famine response:
- Prioritize connectivity in humanitarian access negotiations: Network outages and internet shut-offs are holding back digital financial channels where and when they are needed most. International actors can elevate the need for uninterrupted connectivity as part of larger access negotiations while continuing to promote the restoration of connectivity infrastructure.
- Enabling financial inclusion for the most vulnerable by enabling remote account opening: Today, for the majority of banks, opening a new individual or merchant account often means visiting a bank branch and presenting an official ID (which women are less likely to possess). Sudan’s central bank has taken steps to make remote account opening more accessible through simplified know-your-customer (KYC) requirements (including allowing remote account opening). But banks will need time to execute simplified procedures in a war zone and accounts will still be out of reach for those lacking a national number and other required documents. International actors can help by bringing knowledge and tools from other markets where remote account opening has a longer track record.
- Create an interim roadmap for financial sector recovery: Sudan’s conflict is ongoing, but support for the financial sector is needed today. Out of necessity, humanitarian agencies are diagnosing and finding solutions to systemic financial sector problems on their own. The broader development community can play a role in helping stakeholders to set clear and common financial sector recovery goals that humanitarian, development, and private sector actors can rally around.
Sudan’s financial sector has demonstrated surprising strength and resilience despite almost two years of intense conflict. The sector continues to operate – literally – on the front lines of providing support to mitigate the worst impacts of an expanding famine crisis. But more must be done to help these tools work – and there is no time to waste.
