Sudan’s Investment Scene: Realities On the Ground

Startup Support Programmes, Startups Investment Climate and Experience, The Case for Foreign Investments, Establishing a business and Access to Funding for Non-Sudanese Nationals

Start-up Support Programmes

With an aspiring young generation that led the 2018 Sudan uprising; seeking freedom and change, the response to the deep economic reforms needed post the revolution sits at the heart of the pressing issues challenging the Sudan Transitional Government. Accompanied with the growing economic need of a young population that represents 60% of the total Sudan population, job creation, economic stability, education, and capacity development are of great significance to the overall economic health of the country. As a result, various small private enterprises led by young talents have been on the rise.

As such a segment continues to grow, an incentivizing ecosystem to meet the need for capacity enhancement and support is critical. That said, various support programs are available in Sudan by various specialized agencies across the country. Table 1 provides a broad categorization of the different support mechanisms that are currently active across Sudan states:


Name of Institution


Training & Capacity Development

Work Space & Appliances


Innovation Hubs

249 Startups


Impact Hub



Infotech Inc.

Khartoum University



IEC – Innovation &





Comboni Innovation & Entrepreneurship Centre (CIEC)



Enable Youth Program




Various States



Various States



Practical Action

Various States



Various States




Various States



While there are plenty of established support mechanisms in Sudan, the vast majority are focused on pre-seed and seed stages in the corporate lifecycle of enterprises. However, further enterprise growth stages such as early and growth-stages are in lack of tailored support that meets their growing need of both capacity and capital.

Start-ups Investment Climate and Experience

The Case for Financial Institutions.

Fragmentation is seen in the type of capital provided, the available regulatory environment, and incentive mechanisms available across the country. When approaching the financial system, for example, available financial products can be summarized mainly according to the following characteristics in table 2:


Microfinance Institutions



Debt (Islamic Finance)

Debt (Islamic Finance)

Size Range

Up to 400,000 SDG

Unlimited, depending on the financials and collateral


Short – up to 1 year

Short – up to 2 year

Interest Rate




SDG (Local Currency)

SDG (Local Currency)


Varies depending on the profile of the institution


Most suitable

Low-income communities, Micro and Small enterprises.

Established businesses, secured trade opportunities.

Table 2: MFI and Bank Financing Characteristic in Sudan.


Microfinance institutions provide support to low-income communities and micro and small enterprises, however, the size of funding provided by those institutions may mismatch the required funding needs of enterprises in different sectors as well as later corporate stages. On the other hand, and over the years, there have been a growing number of banks operating under Islamic modes of finance, the type of funding provided require collateral to mitigate risk exposer, however, significant compared to the size of asset and financials of enterprises at early and growth stages. In addition, high interest rates are far greater than what can be absorbed by enterprises that are in principle below investment grade.

While there are several Islamic finance-focused financial products, the vast majority as concentrated on retail, commodities, and secured trade opportunities. The most common are: 

  • Mudaraba: Profit and Loss Sharing focused Contracts;
  • Murabaha: Sale via Installments, or cost-plus sale;
  • Salam: Islamic forwards, or in other words purchases with differed delivery;
  • Ijara: leasing;
  • Musharaka: Partnership, or profit and loss sharing;
  • Mugawala: A contract to undertake or perform work in return for compensation;
  • Qard Hasan: grant.

While Mudaraba, Murabaha, and Musharaka are the most commonly used by Islamic financial institutions, Mudaraba may be more suited to the financial needs of startups and SMEs. However, in Sudan, the requirements by financial institutions may hinder startups and SMEs from accessing adequate sizes of capital, hence representing barrier for market access.

While Microfinance Institutions have great reach in terms of geography and the type of support they provide, the sector is yet expected to grow further in order to cover the growing demand for financial services across various segments of the Sudanese community. According to the Central Bank of Sudan, approximate 42-45 Microfinance Institutions are currently active across various states in Sudan. Examples of these Microfinance Institutions is shown in table 2 below*:




  • Al Ebdaa Microfinance Bank.


Various States

  • The Family Bank


Various States

  • Savings and Social Development Bank


Various States

  • North Kurdofan Microfinance Institution (Mishkhah)


North Kordufan

  • White Nile Microfinance Insitution


White Nile State

  • Blue Nile Microfinance Institution


Blue Nile State

  • Kassala Microfinance Institution



  • Red Sea Microfinance Institution



  • Sawa’id Microfinance


South Kurdofan

  • Sinnar Microfinance



The vast majority of Microfinance services have minimum level of requirements such as:

  1. National ID Number.
  2. National ID Card.
  3. Personal Guarantee Cheque (Commonly requested by Commercial Banks).

In addition, and in some cases in lieu of the personal guarantee cheque, an insurance note could be sufficient.

Recently, the size of financing provided by Microfinance institutions have increased. Financing of up to 400,000 SDG (˜900 USD) on individual basis can be provided for agriculture and manufacturing activities, and up to 200,000 SDG (˜450 USD) can be provided for other economic generating activities. It is important to stress; however, these amounts are provided on individual basis, on the other hand, financing can also be provided for a group, in which each member could be eligible for the maximum amount of financing.

It is also important to note that support is usually provided on the basis of asset purchase and not in cash.

In terms of repayment, it is usually carried in installments according to the value of the asset purchased, and depending on the sector of economic activity, the repayment of the installments may vary. For example, livestock related activities may repay in installments every three (3) months, while manufacturing and general commercial activities may have a six (6) month installments option. On the other hand, agriculture activities may repay once at the end of the tenor.

In terms of tenor, the total repayment schedule vary between Microfinance institutions and Banks. While in general, tenors by Financial Institutions in Sudan are considered short in comparison to Financial Institutions in other countries. However, in Sudan, Microfinance institutions tend to provide shorter tenors compared to commercial banks, With up to one-year tenors by Microfinance Institutions, and up to three (3) years by commercial banks.

Furthermore, Startups can benefit from microfinance by applying as a group of individuals, however, such support may be in convenient for tech-based startups and can be perceived incompatible with corporate structures that rely on a minimum number of founders.

Corporates and Non-Financial Institutions.

As for Corporates and non-Financial Institutions, two (2) main approaches are foreseen when it comes to their investing practices:

  1. Corporate Social Responsibility; and
  2. Direct Investing i.e. taking equity positions in ventures.

As for Corporate Social Responsibility, the general mainstream is centered around the type of in-kind support that could be provided to communities, aligned with the overall company objectives and branding purposes.

Direct investing, on the other hand, is approached much more effectively on the basis of the risk/return profile of the underlying investment opportunity. Overall Non-FIs and Corporates approach Direct Investing with consistency to their overall corporate strategy.

When it comes to investing in small and medium-sized enterprises, disparities and misalignment of interest are common issues that suffice. Small and medium-sized enterprises are usually treated as mature companies in terms of capital allocation and the size of equity holdings by Non-FIs and Corporates. Such an approach rather burdens small and medium enterprises who in essence require a high-risk tolerance accompanied with proper capital allocation and the much-needed support to strengthen their capabilities.

In order to bridge the capital mismatch, clear alignment of interest should be established early in the investment process. In addition, it is highly advised that local investors should be mindful if of the adverse effects of providing capital that does not match the needs of entrepreneurs at a given growth stage as it may result in a total capital loss.

Angel Fund Support, Venture Capital, and Private Equity Funds.

It is important to note that beyond the formal channels of the financial system, support from family, friends, and relatives is common, specifically in sectors such as agriculture and livestock. It is also important to note that such channels of support may be considered primary in rural areas beyond the capital, Khartoum. Young members of the family are usually supported to establish sustainable economic activities. While such support varies between regions depending on the demographic and socio-economic factors of the region, sectors such as agriculture and livestock are dominant compared to other industrial and service sectors.

Recently, led by 249 Startups, an innovation hub based in Khartoum, established the Sudan Angel Investors Network. The Initiative is considered to be the first Angel Investor network dedicated to connecting local entrepreneurs and ventures to Angel investors. As a not-for-profit initiative, such a network plays a critical role in bringing the much-needed funding and support for ventures that are at seed and early stages who were able to develop a proof of concept. Ultimately, bridging the funding gap for start-ups and enterprises and the appetite of local and regional investors for investing in start-ups.

As for Venture Capital and Private Equity Equity Funds, due to the overall risk profile of Sudan, and the risk intolerance of institutional investors who invest in VC and Equity Funds, having start-up-focused VC and PE Funds are limited in the country. As for regional and global VC and PE Funds, due to various risks surrounding start-ups and ventures in Sudan, there may be limited opportunity for funding available for local solutions. Some of the major risks hindering start-ups from accessing regional and global VC and PE Funds are currency risk, liquidity risk, frail valuations, and others.

Further, Crowdfunding represents an attractive avenue for startup support, and while there are a number of attempts to establish crowdfunding networks, a solid approach to crowd funding is yet to be established. However, it has been noticeable that there has been a number of impactful crowdfunding activities supporting particular community related causes. For example, during the Sudan uprising, the Sudanese diaspora collectively provided support via organized groups to help communities through various challenges at the time.

Non-Governmental Organizations, Development Finance Institutions, and foreign missions.

In 2016, the African Development Bank approved the Enable Youth Initiative. In partnership with various government institutions, the program aims to create business opportunities and decent employment for young women and men along priority agricultural value chains in Sudan. In addition, the program targets youth, under 35 years old, with a focus on youth who are graduates holding at least a postgraduate degree. The distribution of beneficiaries across urban and rural areas is based on the proportion of the total youth population in each area and graduate levels. In 2021 the Bank has disbursed approximately 8 Million USD through its Fragile States Facility.

Further, with the support of the Embassy of the Kingdom of the Netherlands, the initiative Orange Corners Sudan was established to create an enabling entrepreneurial climate. The program offers various types of support including seed funding, workspace, and capacity development. The program is running in partnership with 249 Startups and United Capital Bank Sudan.

Moreover, various programs are developed and established by Non-Profit Organizations in Sudan. For Example, several key initiatives are led by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), including private sector promotion for the private sector to grow their capacity by providing business development services and entrepreneurship promotion modules.


The case for foreign investments

In the case of foreign investments into start-ups and young ventures, the Sudanese market is seen as guarded by excessive market barriers and compounded risks that commercial foreign investors aren’t able to tolerate. A few examples of these risks and barriers are currency risk, political risk, policy risk, liquidity risk, security risk, extreme volatility, and market risk.

In addition, given the high mortality rates of small and medium-size ventures, accessing equity investments of size may be cumbersome unless these ventures are mature, with a track record and healthy financial positions. Furthermore, equity investments into small and medium-sized ventures, require years of holding of the investor’s equity position until ventures are competitive enough for exists.

Moreover, according to the African Development Bank “Inflation escalated to an estimated 124.9% in 2020, compared with 82.4% in 2019, mainly due to a 118% currency depreciation and monetization of the fiscal deficit”. Taking currency depreciation as an example for barriers of investments into small and medium enterprises, foreign investors typically invest in foreign currency, however, volatile markets require currency hedging mechanisms to transfer and mitigate the risk of currency fluctuations and volatility. On the other hand, local start-ups rely on local currency repayments, therefore, they are exposed to heavy currency risks in case capital is raised in foreign currency.

Another major obstacle for foreign investors is resolving insolvency issues, according to the World Bank report on Doing Business (Economy Profile of Sudan – 2020), Sudan ranks 152 of 190 economies, with a recovery rate of 30.2 cents on the dollar for creditors, and a lengthy recovery time of two years in average. Therefore, foreign investors may be exposed to high insolvency risk .

Overall, in Sudan, a set of appropriate mechanisms are needed to provide foreign investors with attractive investment opportunities accompanied by the type of risk mitigation they seek. Ultimately, reducing the risk profile of start-ups and small and medium-sized enterprises and portray an attractive economic segment.

Establishing a business and Access to Funding for Non-Sudanese Nationals

Non-Sudanese nationals, who are the country, enjoy equal rights as Sudanese citizens to register a company or a business name and generate revenue from their registered businesses for activities that cover the below areas of work:

  • Service activities, including roads and bridges, mining and construction.
  • Industrial activities, including light and heavy industry.
  • Agricultural and livestock activities.

Nevertheless, below is a non-exhaustive list of the activities that are prohibited for non-Sudanese nationals to engage in, and others that are conditional based on attaining permissions and adhering to the legal terms and regulations of respective ministries of the targeted activities:

List of activities that are prohibited for non-Sudanese nationals.

  • It is prohibited for a non-Sudanese to work in the field of general trade, import, and export for commercial purposes, without the approval of the Ministry of Foreign Trade.
  • It is prohibited for a non-Sudanese to work in the press, media, and all publishing-related activities.
  • It is prohibited for a non-Sudanese to work in the field of shipping, unloading, and clearance.


List of activities that require special permissions for non-Sudanese nationals.

  • Work in the field of aviation activities (obtaining civil aviation approval).
  • Work in exploration and mining (obtaining the approval of the Ministry of Energy).
  • Work in expert houses, providing consultations, and preparing feasibility studies (the Expert Houses Organizing Council).
  • Work in the field of city planning and aerial survey (obtaining the approval of the Ministry of Defense).
  • Work in the field of exchange and banking (obtaining the approval of the Bank of Sudan).
  • Work in the field of revenue collection for government agencies (obtaining the approval of the Ministry of Finance).


Conditions for registering a Sudanese company by non-Sudanese nationals.

A non-Sudanese national can register a business or a company name by submitting the following information:

  1. Sole Ownership or Single Activity Business Name; which is represented by an individual or a partnership (established for one business purpose only).
  2. A Company (Limited Liability); which is considered a legal persona, established for multi-purpose activities, and hence requires the presence of at least two shareholders.

Legal requirements for company registration.

  • Proof of identity (passport).
  • Completed forms in accordance with the type of targeted business or investment activities.
  • In the case of registering a business name; there is no need to provide a residency permit, proof of business address, and business name.
  • In the case of registering a company; there is a need to provide a copy of a foreigner’s registration form in addition to a guarantor, the company’s official name, proof of business address, and the company legal documentation.

Accessing capital.

Furthermore, Sudanese companies established by non-Sudanese nationals are governed by the Companies Act of 2015, and therefore, can obtain funding from local banks and funding agencies similar to Sudanese owner and established business. Moreover, as registered company is a legal persona, access to funding is subject to internal regulations and procedure of the bank or funding agency.