Page 12 - Siaf 2025

Agricultural Finance in Sudan: Challenges and Solutions Amidst War

Agricultural nance is a cornerstone for Financing Distribution by State (2022)
supporting rural development and achieving food State % of Agricultural Finance Remarks
security particularly in Sudan, where a large portion Gezira 28% Largest irrigated agricultural project
of the population depends on agriculture as a prima- Gedaref 15% Rain-fed commercial crop nancing
ry source of income and livelihood. However, for River Nile 12% Wheat and vegetable nancing
years, the agricultural nancing system has faced Northern State 10% Irrigated wheat and fruit farming
structural and institutional challenges, which have Kordofan 12% Traditional farming and seasonal
been exacerbated signi cantly since the outbreak of loans
war in April 2023. e conict has caused wide- Greater Darfur 8% Limited support for traditional
spread paralysis of the banking system and the farming
suspension of many agricultural projects. Sennar & Blue Nile 10% Mixed (rain-fed and irrigat-
First: e State of Agricultural Finance in Sudan ed) farming 5% Marginal and weak nancing
Other states
Before the War
Weak Banking Sector Support: Agricultural nanc- Post-War Financing Status (2024)
ing accounted for no more than 10% of total banking Region Financing Status
credit, even though agriculture contributes over 30% Northern, River Nile Partially active
to the GDP. Gedaref, Kassala Very limited
Dominance of the Agricultural Bank of Sudan: It Sennar, Blue Nile Nearly halted
served as the primary source of agricultural loans, Gezira, Khartoum Completely suspended
but it su‰ers from limited capital, bureaucratic proce- Greater Darfur, Kordofan Completely suspended
dures, and restricted geographic coverage. International estimates indicate a decline of more than 65% in
Lack of Alternative Financing Tools: ere are no agricultural nancing compared to 2022.
active agricultural investment funds, nor e‰ective Fi“h: Proposed Solutions
cooperative or agricultural insurance systems. Reform Financing Policies
Second: Main Challenges in the Financing System Increase agricultural sector credit allocation to at least 20% of
Land Collateral Requirements total bank nancing.
Formal nancing requires property collateral, which Adopt cooperative and decentralized nancing via producer
most small-scale farmers especially those in conict associations.
areas or on unregistered lands cannot provide. Use of Alternative Collateral
High Cost of Financing Accept crops or agricultural equipment as collateral instead of
High interest rates and currency instability have real estate.
made agricultural nancing a burden rather than an Activate group guarantees among farmers in rural communi-
incentive for producers. ties.
Delayed Disbursement Digital Finance Integration
Loans o“en arrive a“er the agricultural season has Promote mobile banking and digital platforms for disburse-
already started, reducing their usefulness and a‰ect- ments and transfers, especially in stable areas.
ing production. Establish Emergency Agricultural Support Funds
Weak Agricultural Insurance Create a national fund to re nance agriculture in partnership
e absence of a reliable insurance system increases with international organizations.
the risk of agricultural investment and weakens Link nancing to direct provision of improved inputs (seeds,
banks’ willingness to lend. fertilizers, fuel).
Poor Distribution Encourage Production-Based Relief and International Fund-
Favoritism and mismanagement have led to leakage ing
of funds to undeserving bene ciaries. Adopt nancing models that are conditional on agricultural
ird: Impact of the War on Agricultural Finance production within food security programs in conict-a‰ected
Collapse of the Banking System areas.
Most bank branches in Khartoum, Gezira, Darfur, Conclusion
and other key regions have ceased operations. Sudan’s agricultural sector is at a critical juncture that
Institutional Financing Halted demands urgent action to rebuild its fractured nancing
e Agricultural Bank of Sudan suspended nancing system. Agriculture remains the fastest pathway to restoring
in over 60% of the areas it used to serve. livelihoods and economic stability. A exible, fair, and secure
Loss of Collateral and Documents nancing system is essential—one that adapts to the reality of
Displacement and destruction have resulted in the conict and ensures nancial inclusion for all producers,
loss of land ownership documents and guarantees, especially in rural and war-a‰ected regions.
leaving farmers unable to secure nancing.
Rising Costs References
Input costs have increased by over 200% due to ina- Central Bank of Sudan. (2022). Annual Report.
tion, with nancing costs rising at a similar rate. Ministry of Finance and Economic Planning. (2022). Sectoral
Cash Shortages and Disrupted Transfers Performance Report – Agriculture.
Even in relatively stable states, access to funds has Agricultural Bank of Sudan. (2023). Press releases and perfor-
become di™cult, increasing farmers’ isolation. mance reports.
Fourth: Statistics and Regional Financing Map Ministry of Agriculture and Forestry – General Directorate of
Agricultural Financing Volume Before the War Agricultural Finance. (2022).
(2022) FAO. (2022). Agricultural Finance Landscape in Sudan.
Total banking credit: SDG 650 billion World Bank. (2023). Sudan Rapid Damage and Needs Assess-
Agricultural nancing: Approximately SDG 63 ment.
billion (9.7%) UNDP. (2024). Post-Conict Agricultural Recovery in Sudan.
Number of nanced farmers: Around 800,000 WFP. (2024). Emergency Agricultural Situation Report.
Agricultural Bank of Sudan: Accounted for 85% of UN Agriculture Working Group in Sudan. (2024).
total agricultural nancing Center for Peace and Development Studies – University of
Bahri. (2024).

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