Changing the Currency in Sudan at This Time: Are There Any Expected Benefits?

If we trace the history of currency changes in Sudan since its independence in 1956 until today, we find that no previous attempt has been as carefully considered or thoroughly supervised as the current one. This time, the process reflects the seriousness of the decision made by the President of the Sovereignty Council, General Abdel Fattah al-Burhan, on Wednesday, November 27. He established a high-level committee to oversee the currency change, led by Sovereignty Council Member, Naval Engineer General Ibrahim Jaber. The committee includes representatives from various regulatory, legal, and security bodies.

For example, the committee includes the Central Bank of Sudan, the Ministry of Finance and Economic Planning, the Attorney General, the Director of the General Intelligence and Security Service, among others. Additionally, specialized courts and prosecution offices have been established to handle cases related to the currency change. It’s worth noting that, in the past, the Central Bank of Sudan handled all technical and logistical arrangements for currency changes independently, coordinating with bank managers and security bodies.

This heightened attention from the state stems from the critical juncture Sudan is currently facing and the severe attack on the national currency at the onset of the current war. The Rapid Support Forces (RSF) and their mercenaries looted bank vaults, shops, and citizens’ homes. Additionally, the national currency plays a crucial role in stabilizing the economy and reflects the sovereignty of the state. However, some may argue that it’s too late to change the currency now, given that looted funds have already been laundered through modern electronic payment methods or converted into foreign currencies, precious metals, or fixed assets.

While these concerns are valid, the Arab proverb “What cannot be fully achieved should not be wholly abandoned” offers perspective. Moreover, no one can deny the unprecedented destruction and damage caused by the war to Sudan’s civil service institutions, particularly the banking system. This devastation has left state institutions paralyzed, which previously prevented the Central Bank of Sudan from undertaking a currency change amid the intense fighting between the Sudanese army and RSF in Khartoum, where the bank is headquartered.

Despite the challenges, changing the currency will undoubtedly bring several economic benefits, including:

1. Curbing Inflation: Financial experts estimate that over 95% of the money supply circulates outside the banking system, contributing to high inflation rates. The currency change will reintegrate these funds into the banking system, helping control inflation.

2. Enhancing Monetary Policy: By regulating the money supply, the Central Bank of Sudan can effectively manage the economy through open market operations, either increasing or decreasing the money in circulation as needed.

3. Tracking Illicit Funds: The currency change will help identify those still holding looted funds. Banks will implement anti-money laundering and counter-terrorism financing measures during the exchange process.

4. Restoring Trust in the National Currency: The change will also eliminate counterfeit currency currently in circulation, especially abroad. Sudanese banking employees possess advanced skills and modern technologies to detect counterfeit notes, ensuring the integrity of the new currency.

In summary, while the process of changing the currency comes with challenges and criticisms, it holds the potential to achieve significant benefits for Sudan’s national economy and stability.