Sudanese banks face merger or liquidation due to conflict and inflation

The banking sector in Sudan is facing significant challenges due to war and inflation. The Central Bank of Sudan has given the majority of operating banks a deadline to align their conditions by increasing their capital, merging, or undergoing administrative liquidation. These banks, numbering 38, are mostly small and medium-sized with modest capital, suffering from depleting assets and rising non-performing loans, which hinder funding for major projects such as infrastructure and agriculture. Through its plan, the Central Bank aims to reduce the number of banks through mergers to create stronger banking entities capable of withstanding economic shocks, especially amid the worsening economic crisis and liquidity shortages. Negative effects from politicization, weak independence of the bank, and conflicts of interest are also hampering reforms.

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