Sudan Central Bank: Accelerates New Securities Issuance Plan

• The Sudan Central Bank is accelerating the issuance of new government securities to finance the budget deficit and manage liquidity.
• This move has sparked debate among experts regarding its potential to revitalize financial markets amidst challenging economic conditions.
• Previous government participation certificates, known as 'Shahama', faced significant payment delays and defaults during the war that began in April 2023.
• The Sudan Financial Services Company Limited, 99% owned by the Central Bank, was responsible for the 'Shahama' certificates.
• Experts emphasize that the success of new issuances depends on the government's ability to fulfill obligations, offer attractive returns, and rebuild investor confidence.

For the new issuances to genuinely revitalize financial markets and attract the necessary savings, the Central Bank must not only offer competitive returns but also establish a clear and credible framework for honoring obligations.

On October 11, 2026, the Sudan Central Bank (بنك السودان المركزي) announced an accelerated plan for a new issuance of government securities. This strategic move aims to address the nation's significant budget deficit and enhance liquidity management within the financial system. The decision has reignited extensive economic debate regarding the efficacy of such instruments in revitalizing Sudan's financial markets and attracting domestic savings, particularly given the country's current extraordinary economic challenges.

The initiative to launch a new Sudan Central Bank new securities issuance comes at a time when the nation is grappling with the aftermath of a conflict that began in April 2023. This ongoing instability has severely impacted the economy, creating an environment of uncertainty for investors and financial institutions alike. The Central Bank's push for these new financial tools is seen as an attempt to stabilize the economic landscape by providing alternative funding mechanisms for the government.

Financial and banking experts have weighed in, suggesting that these new issuances could serve as a vital mechanism for absorbing excess liquidity circulating in the economy. They propose that by channeling these funds, the government could direct savings towards financing its budget deficit and supporting crucial development projects. This approach is favored over direct monetary financing, which can exacerbate inflationary pressures.

The backdrop to this new issuance includes a history of challenges with previous government financial instruments. Notably, the Sudan Financial Services Company Limited (شركة السودان للخدمات المالية), a key entity in the issuance of government participation certificates, experienced significant difficulties. This company is predominantly owned by the Sudan Central Bank, holding a 99% stake, with the Ministry of Finance owning the remaining 1%.

During the conflict that erupted in April 2023, investors in the government participation certificates, known as 'Shahama' (شهامة), faced considerable hardship. These investors, many of whom were pensioners and widows, encountered severe Shahama certificates payment delays, impacting their expected profits and the timely redemption of their investments. The Ministry of Finance and the Sudan Central Bank struggled to meet their obligations for these certificates, leading to a loss of trust among the investor base.

According to a recent press release from the Sudan Central Bank, the board of directors for the Sudan Financial Services Company Limited convened on a Saturday, indicating ongoing discussions and strategic planning related to these financial instruments. The historical difficulties with 'Shahama' certificates underscore the critical need for robust guarantees and transparent terms for any new government securities.

The success of the proposed Sudan Central Bank new securities issuance is contingent upon several critical factors, as highlighted by financial experts. Foremost among these is the absolute necessity for the issuing entities, including the Central Bank and the Ministry of Finance, to demonstrate an unwavering capacity to fulfill all their financial commitments. This includes ensuring attractive returns for investors and, crucially, rebuilding and reinforcing confidence in government-backed financial instruments, which has been eroded by past payment failures.

Effective coordination between monetary and fiscal policies is also deemed essential for the success of these new securities in addressing Sudan government budget deficit financing. Without a cohesive strategy, the impact of these issuances could be undermined. The current economic climate, coupled with the previous Shahama certificates payment delays, introduces a heightened element of Sudan sovereign debt risk that potential investors must carefully consider.

For the new issuances to genuinely revitalize financial markets and attract the necessary savings, the Central Bank must not only offer competitive returns but also establish a clear and credible framework for honoring obligations. The memory of past defaults, particularly affecting vulnerable investors, means that future success hinges on a renewed commitment to transparency and reliability, ensuring that the new 'بنك السودان المركزي أوراق مالية' are perceived as secure and trustworthy investments.

Lawyers advising clients on investments in Sudanese government instruments must carefully assess the heightened risk of payment delays and default, given the Central Bank's past failures to honor obligations for instruments like 'Shahama' certificates, and scrutinize the terms and guarantees of any new issuances.

Source: Original reporting via Sudan Tribune