Sudan Banknote Switch Causes Cash Crunch

A Sudanese man pushes a cart with water containers in Omdurman, the Sudanese capital's twin city, during battles between the Sudanese military forces and Rapid Support Forces (RSF), on January 17, 2025. (Photo by AFP)
A Sudanese man pushes a cart with water containers in Omdurman, the Sudanese capital's twin city, during battles between the Sudanese military forces and Rapid Support Forces (RSF), on January 17, 2025. (Photo by AFP)
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Sudan Banknote Switch Causes Cash Crunch

A Sudanese man pushes a cart with water containers in Omdurman, the Sudanese capital's twin city, during battles between the Sudanese military forces and Rapid Support Forces (RSF), on January 17, 2025. (Photo by AFP)
A Sudanese man pushes a cart with water containers in Omdurman, the Sudanese capital's twin city, during battles between the Sudanese military forces and Rapid Support Forces (RSF), on January 17, 2025. (Photo by AFP)

Sudan's army-aligned government has issued new banknotes in areas it controls, causing long queues at banks, disrupting trade and entrenching division.

In a country already grappling with war and famine, the swap replaced 500 and 1,000 Sudanese pound banknotes (worth around $0.25 and $0.50 respectively) with new ones in seven states.

The government justified the move as necessary to "protect the national economy and combat criminal counterfeiters,” AFP reported.

But for many Sudanese it just caused problems.

In Port Sudan, now the de facto capital, frustration boiled over as banks failed to provide enough new notes.

One 37-year-old woman spent days unsuccessfully trying to get the new money.

"I've been going to the bank four or five times a week to get the new currency. But there is none," she told AFP, requesting anonymity for fear of reprisals.

Grocers, rickshaw drivers, petrol stations and small shop owners are refusing to accept the old currency, preventing many transactions in a country reliant on cash.

"We cannot buy small things from street vendors any more or transport around the city because they refuse the old currency," the woman said.

The currency shift comes 21 months into a war that has devastated the northeast African country's economy and infrastructure, caused famine in some areas, uprooted millions of people and seen the Sudanese pound plunge.

From 500 pounds to the US dollar in April 2023, it now oscillates between 2,000 and 2,500.

Finance Minister Gibril Ibrahim defended the switch, saying it aims to "move money into the banking system, ensure the monetary mass enters formal channels as well as prevent counterfeiting and looted funds.”

But analysts say it is less about economics and more about gaining the upper hand in the war between army chief Abdel Fattah al-Burhan and his former deputy Mohamed Hamdan Daglo, who leads the Rapid Support Forces (RSF).

"The army is trying to weaken the RSF by having a more dominant currency," Matthew Sterling Benson at the London School of Economics and Political Science told AFP.

After the RSF looted banks, the army "wants to control the flow of money" and deprive them of resources, he said.

Kholood Khair, founder of think tank Confluence Advisory, believes that this financial squeeze may accelerate RSF plans to establish a rival currency and administration.

"The move has catalyzed the already existing trajectory towards a split," she told AFP.

Sudan is already fragmented: the army holds the north and east and the RSF dominates in the western Darfur region and parts of the south and center.

Greater Khartoum is carved up between them.

For Sudan's population, the move has only compounded their suffering.

Activist Nazik Kabalo, who has coordinated aid in several areas, said supply chains have been severely disrupted.

Farmers, traders and food suppliers rely entirely on cash.

"And if you do not have cash, you cannot buy supplies, needed for aid or for anything else," Kabalo told AFP.

The government has promoted digital banking apps such as Bankak, but many Sudanese cannot access them because of widespread telecommunications outages.



Syria's Economy Reborn after Being Freed from Assad

Under Assad, Syria was under heavy economic sanctions and mired in seemingly endless crisis - AFP
Under Assad, Syria was under heavy economic sanctions and mired in seemingly endless crisis - AFP
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Syria's Economy Reborn after Being Freed from Assad

Under Assad, Syria was under heavy economic sanctions and mired in seemingly endless crisis - AFP
Under Assad, Syria was under heavy economic sanctions and mired in seemingly endless crisis - AFP

When Bashar al-Assad ruled Syria, merchants like Youssef Rajab kept much of their imported stock hidden for fear of arrest for breaking the law.

But after opposition factions toppled Assad in a lightning offensive last month, Rajab put previously banned foreign goods such as chocolate, biscuits and shampoo back on the shelf.

Such products are now openly on sale in Damascus, and foreign currency is once again traded without fear.
Under Assad, Syria was mired in corruption, under heavy economic sanctions, and in seemingly endless crisis.
Foreign currency was in carefully controlled supply, and engaging in its trade or in the sale of banned goods could have meant a stay in one of the country's notorious jails.

"A day after the regime fell, I brought out all the foreign merchandise I'd been hiding and put it for sale, without having to worry," Rajab told AFP.

"It was a strange feeling, but I was happy," added the 23-year-old, speaking beside shelves stacked with imported products.

Previously, the few imported goods that were available were smuggled in from Lebanon by traders who risked arrest, or were acquired by bribing officials as businessmen controlled imports to a country wracked by 13 years of civil war.

"It's true that now we have great freedom to engage in business, but it has also been chaotic," said Rajab.

On every street corner, makeshift money changers now tout for business from passers-by.

"It's a job that was done in secret before," said Amir Halimeh, sitting at a small table on which there were wads of Syrian pounds and US dollars.

"We used to refer to dollars as 'mint' or 'parsley' or something else green" to bypass surveillance, he added.

- Currency market 'freed' -

Assad's government kept a firm grip on foreign currency dealings as a way to control the economy, and any freelance operators faced punishment of seven years in prison and a heavy fine.

"The market has now been completely freed... as has the exchange rate," the moneychanger said.

The pound lost about 90 percent of its value against the US dollar in 2011, the year Syria descended into civil war after a brutal crackdown on democracy protests.

Now it is being traded at between 11,000 and 12,000 to the greenback.

Before Damascus fell to the coalition led by the Hayat Tahrir al-Sham group, the black market rate soared to 30,000 pounds for one dollar.

"The economy in the future Syria will be free and competitive," the interim government's Economy Minister Bassel Abdel Hanan told reporters.

He said the new authorities would implement "policies aimed at protecting domestic output, supporting the industrial sector and protecting agriculture".

They have yet to elaborate on their future economic plans during the three-month interim phase that began in December.

Economics professor Adnan Suleiman of Damascus University said that "the economic model that existed before the fall of the regime... was a market economy", but a "distorted" one.

- Sanctions -

"Supply and demand were not free. Instead of competition there was a monopoly," he said of people close to Assad who controlled different sectors of the economy.

In an effort to turn the page, the interim government has been lobbying for international sanctions to be lifted.

Earlier this month, the US Treasury Department announced it was providing additional sanctions relief on some activities for the next six months to ease access to basic services, including fuel and humanitarian aid.

Asaad al-Shaibani, Syria's top diplomat, told the World Economic Forum in Davos on Wednesday: "Removing economic sanctions is the key for the stability of Syria."

They had been imposed for the benefit of Syrians, but are now "against the Syrian people", he said.

"We inherited a collapsed state from the Assad regime, there is no economic system," Shaibani said, adding that "the economy in the future will be open".

Under Assad, fuel sales were a monopoly and were severely limited.

But now vendors openly sell cans of petrol and fuel oil on the streets of the capital -- where new models of car have also made an appearance.

Previously, the import of vehicles was tightly regulated.

Syria's war took a terrible toll not only on the people, but also on its infrastructure.

Damage to power plants and pipelines has caused power cuts lasting up to 20 hours a day.

"The former regime left a huge legacy," said Suleiman.

"The greatest task facing future governments is to finance development and reconstruction."