Draft Annual Report 2022, Compiled September 9, 2026

Central Bank of Sudan Second Sixty-Second Annual Report 2022 P.O. Box: 313 Tel: 1870566058 (249) Website: http://www.cbos.gov.sd Email: publications@cbos.gov.sd

Central Bank of Sudan

Second Sixty-Second Annual Report 2022 – Central Bank of Sudan i Preface

In the name of Allah, the Most Gracious, the Most Merciful

The Central Bank of Sudan is pleased to present its Second Sixty-Second Annual Report for the year 2022 to all interested parties, including researchers, academics, specialists in banking, financial, and economic affairs, from local, regional, and international institutions and bodies. We hope it meets their needs.

On behalf of the Central Bank of Sudan, I would like to express my sincere thanks and appreciation to the ministries, institutions, and government units for their cooperation in providing the necessary data and statistics for the preparation of this report.

I also cannot miss extending my thanks to the committee that undertook the review and revision, and to everyone who contributed effort in its preparation.

And Allah is the Giver of success. Amna Hassan Merghani El Tom Governor of the Central Bank of Sudan 2026

Second Sixty-Second Annual Report 2022 – Central Bank of Sudan ii Board of Directors of the Central Bank of Sudan As of 31/12/2022

Mr. Hussein Jangoul Yahya / Chairman of the Board of Directors - Governor Mr. Salah Sheikh El Din Khidir / Deputy Governor - Member Mr. Ali El Siddig Barai / Deputy Governor - Member

Central Bank of Sudan – Sixty-Second Annual Report 2022 12 In the external sector, the current account surplus as a percentage of GDP rose from 2.9% in 2021 to 7.4% in 2022. The following is a review of the performance of some economic indicators, including growth, inflation, current account, and unemployment rates in industrial countries, developing countries in the Middle East, North Africa, Afghanistan, Pakistan, and Africa, in addition to the economic indicators for Sudan's most important partners in trade and investment, and the economic performance of regional blocs to which Sudan belongs. 1.3.1 Economic Performance: Growth, Inflation, Unemployment, and Current Account Rates in Major Industrial Countries Table (1-1) shows the growth rates, inflation, current account as a percentage of GDP, and unemployment in major industrial countries in both 2021 and 2022. Figure (1-1) also shows the performance of these indicators during 2022. Table (1-1) Growth, Inflation, Unemployment, and Current Account Indicators in Major Industrial Countries for 2021 and 2022

Indicators	Country	Growth Rates %	Inflation Rates %	Unemployment Rates %	Current Account as % of GDP %
		*2022	**2021	*2022	**2021
Industrial Countries (Combined)		2.4	5.2	7.2	3.1

Central Bank of Sudan – Second Annual Report 2022 Central Bank of Sudan Policies for the Year 2022

1.2 Introduction The Central Bank of Sudan's policies for 2022 were issued in the context of a promising economic reality, represented by the removal of Sudan's name from the list of state sponsors of terrorism and Sudan's reaching the decision point in the Heavily Indebted Poor Countries (HIPCs) Initiative. In addition to the economic reforms undertaken during 2021, this necessitated strengthening policies, procedures, controls, and efforts that contribute to the integration of the Sudanese economy into the global economy, by adhering to supervisory and regulatory standards and enhancing transparency. On the other hand, there were many global challenges, including the negative impact of the Coronavirus pandemic on the global economy in general. In particular, the Sudanese economy faced challenges such as the recurring deficit in the state's general budget and current account, and high inflation rates. This necessitated the Central Bank of Sudan to formulate its policies for 2022 taking all these factors into account.

The Central Bank's policies for 2021 were based on specific references, including: the government's program for the transitional period, the General Budget indicators for the State for 2022, the Miscellaneous Amendments Law for 2021, the objectives of the United Nations Sustainable Development Goals (SDGs), and the evaluation of the Central Bank of Sudan's policies performance for 2021.

The 2021 policies aimed at three main axes, with the first axis being achieving monetary stability by working towards general price stability and reducing the inflation rate to a single digit by the end of the year, and sustaining exchange rate stability. This was to be achieved by continuing the managed flexible exchange rate policy, using available monetary tools, reforming and managing the exchange rate, maximizing foreign currency resources, rationalizing its use and demand, developing and restoring foreign banking correspondence relationships, and coordinating with commercial banks to attract foreign remittances. This also involved encouraging direct foreign investment in coordination with other entities,

Bank of Sudan Central – Second Annual Report 2022 40 By the end of 2022, the number of bank branches operating during the evening period increased from 106 branches in 2021 to 107 branches by the end of 2022. 2. The most important performance indicators in the microfinance sector are summarized as follows: a. The number of microfinance institutions increased from 47 institutions in 2021 to 51 institutions and companies by the end of the year. b. The actual volume of financing granted by banks to microfinance clients increased from SDG 73,446.2 million at the end of December 2021 to SDG 174,859.6 million at the end of December 2022, at a rate of 138.1%. c. The ratio of microfinance to the total bank portfolio increased from 6.0% at the end of 2021 to 9.5% at the end of 2022, while the targeted ratio from the total bank financing portfolio is 12%. d. The non-performing microfinance ratio in banks decreased from 3.5% at the end of 2021 to 1.0% at the end of 2022. Similarly, the non-performing ratio in microfinance institutions decreased from 8.6% at the end of 2021 to 2.8% at the end of 2022.

Bank of Sudan Central – Second Annual Report 2022 41 Central Bank of Sudan

Bank of Sudan Central – Second Annual Report 2022 42

Chapter Three Central Bank of Sudan Accounts for 2022

Bank of Sudan Central – Second Annual Report 2022 43 Central Bank of Sudan Accounts for 2022 1.3 Introduction This chapter covers the financial statements of the Central Bank of Sudan for the financial year ended December 31, 2022, which include the Statement of Financial Position, Income Statement, Statement of Changes in Equity, and Statement of Cash Flows. These statements have been prepared in accordance with International Financial Reporting Standards and Accounting Standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions, and presented according to the General Presentation and Disclosure Standard, which defines the requirements for presentation and disclosure, as well as its implications related to consolidated financial statements and financial statements for entities still in the establishment phase. Furthermore, according to these standards, the financial statements consist of:

1. Statement of Financial Position
2. Income Statement
3. Statement of Changes in Equity
4. Statement of Cash Flows
5. Accounting Policies and Explanatory Notes These statements represent the minimum necessary disclosures for presenting the financial position, results of operations, and cash flow, and what is associated with them, including potential gains or losses, and how to treat accounting changes. 2.3 Statement of Financial Position The Statement of Financial Position is a financial statement that summarizes the assets of an entity (its assets), its liabilities to others (its liabilities), and its equity at a specific date. Table (3-1) shows the details of the Statement of Financial Position items for the years 2022 and 2021. Table (3-1) Statement of Financial Position as of 2022/12/31 (Thousand SDG) Item 2022 2021 Assets Total Government Debt 7,869,804,958 5,787,005,253 Foreign Assets 637,487,389 938,897,699 Gold Reserves 233,638,108 118,085,178 Short-term Investments 237,562,913 129,295,563

Bank of Sudan Central – Second Annual Report 2022 44 Item 2022 2021 Long-term Investments 136,912,452 104,552,345 Other Debit Accounts 139,426,021 98,097,113 Fixed Assets 6,758,620 2,053,804 Constructions Under Execution 297,016 404,732 Total Assets 9,261,887,477 7,178,391,687 Liabilities and Equity Currency in Circulation 1,377,766,150 988,657,846 Current Accounts 2,563,084,621 1,878,588,147 Foreign Liabilities 3,862,077,863 2,937,144,387 Other Liabilities 1,704,462,063 1,470,919,950 Provisions and Accruals 50,821,514 25,219,084 Subtotal 9,558,212,211 7,300,529,414 Equity: Capital 384,000 384,000 Reserves 2,219,011 2,219,011 Retained Earnings or Losses (298,927,745) (124,740,738) Subtotal (296,324,734) (122,137,727) Total Liabilities, Capital and Reserves 9,261,887,477 7,178,391,687 Statutory Accounts 4,838,177,080 3,646,351,988

Fath Al-Rahman Muhammad Sati Al-Amin General Manager of Public Accounts Department Acting Financial and Affairs Ali Al-Siddiq Barai Governor and Chairman of the Board of Directors

1.2.3 Assets: According to International Financial Reporting Standards, assets are defined as resources controlled by an entity as a result of past events, from which future economic benefits are expected to flow to the entity. Through the analysis of the Statement of Financial Position, an increase in total assets is observed from SDG 7,178,392 million at the end of 2021 to SDG 9,261,887 million at the end of 2022, an increase of 29%. This is despite a decrease in the balance of foreign assets from SDG 938,898 million at the end of 2021 to SDG 637,487 million at the end of 2022, a decrease of 32%. The increase in total assets is attributed to the following:

• Increase in the balance of total government debt from SDG 5,787,005 million at the end of 2021 to SDG 7,869,805 million at the end of 2022, an increase of 36%. Government debt constituted 85% of total assets. This increase is mainly due to the rise in foreign currency exchange rate differences by SDG 1,068,049 million and temporary advances to the government by SDG 526,904 million, accrued interest by SDG 85,073 million, and the cost of deposits from abroad by SDG 19,134 million. 5 Statutory accounts include all of the following: printed currency, letters of credit issued, letters of guarantee, metallic currency, and temporary advances to the government.

Bank of Sudan Central – Second Annual Report 2022 45

• Increase in gold reserves from SDG 118,085 million at the end of 2021 to SDG 223,638 million at the end of 2022, an increase of 89%, due to the Central Bank of Sudan's continued policy of purchasing gold for building foreign reserves.
• Increase in the balance of short-term investments from SDG 129,296 million at the end of 2021 to SDG 237,563 million at the end of 2022, an increase of 83.7%, due to the increase in loans provided to banks through the liquidity management fund by SDG 63,266 million, and the increase in the Central Bank of Sudan's investment deposits with commercial banks by SDG 42,725 million.
• Increase in the balance of long-term investments from SDG 104,552 million at the end of 2021 to SDG 136,912 million at the end of 2022, an increase of 31%. This is mainly due to the increase in the item of contributions in the capital of foreign banks and companies by SDG 23,640 million and the item of contributions in the capital of financial companies and institutions by SDG 8,270 million.
• Increase in the balance of other debit accounts from SDG 98,097 million at the end of 2021 to SDG 139,420 million at the end of 2022, an increase of 42%.
• Increase in fixed assets from SDG 2,054 million at the end of 2021 to SDG 6,759 million at the end of 2022, an increase of 229%. This is mainly due to the increase in the land item by SDG 1,000 million and the buildings item by SDG 1,856 million. 2.2.3 Liabilities and Equity: According to International Financial Reporting Standards, liabilities are defined as current obligations of the entity arising from past events, the settlement of which is expected to require an outflow of economic benefits from the entity. As for equity, it is defined as the owner's share remaining in the entity's assets after deducting all liabilities. The most prominent changes in liabilities and equity for 2022 are as follows:
• Increase in the balance of currency in circulation from SDG 988,658 million at the end of 2021 to SDG 1,377,766 million at the end of 2022, an increase of 39%. The value of issued currency reached SDG 879,370 million during 2022.
• Increase in the balance of current accounts for local bodies, institutions, banks, and government units from SDG 1,878,588 million at the end of 2012 to SDG 2,563,085 million at the end of 2022, an increase of 36%.
• Increase in the local equivalent of foreign liabilities from SDG 2,937,144 million at the end of 2021 to SDG 3,862,078 million at the end of 2022, an increase of 31.5%. This is due to the increase in both short-term deposits and facilities by SDG 794,134 million, other sight obligations by SDG 145,014 million, and payment agreements by SDG 3,192 million, along with a decrease in correspondent accounts abroad by SDG 17,406 million.

Bank of Sudan Central – Second Annual Report 2022 46

• Increase in the total balance of other liabilities from SDG 1,470,920 million at the end of 2021 to SDG 1,704,462 million at the end of 2022, an increase of 15.9%. This is mainly due to the increase in both bank investments in foreign currency by SDG 5,406 million and consolidated and cleared bank balances by SDG 5,313 million.
• Increase in the balance of provisions and accruals from SDG 25,219 million at the end of 2021 to SDG 50,822 million at the end of 2022, an increase of 101.5%. 3.3 Income Statement The income statement is a statement prepared to determine the result of the entity's activity, whether profit or loss. Table (3-2) shows the income statement for the year ended December 31, 2022, compared to 2021. Table (3-2) Income Statement for the year ended 2024/12/31 (Thousand SDG) Item 2022 2021 Revenues Foreign Currency Revenues 20,861,234 9,001,593 Investment Revenues 1,139,658 116,196 Banking Operations Revenues 15,911,861 2,376,012 Other Revenues 185,769 91,409 Total Revenues 38,098,522 11,585,210 Expenses Currency Expenses (95,669,316) (58,832,683) Administrative and General Expenses (115,815,741) (50,014,663) Depreciation Expenses (695,277) (330,610) Total Expenses and Provisions (212,180,334) (109,177,956) Total Surplus / Deficit (174,081,812) (97,592,746)

Fath Al-Rahman Muhammad Sati Al-Amin General Manager of Public Accounts Department Acting Financial and Affairs Ali Al-Siddiq Barai Governor and Chairman of the Board of Directors

Details of changes in Income Statement items are as follows: 1.3.3 Revenues: Revenues are defined as increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from participants.

Bank of Sudan Central – Second Annual Report 2022 47 An increase in total revenues is observed from SDG 11,585 million at the end of 2021 to SDG 38,099 million at the end of 2022, an increase of 228.9%. This is attributed to the following:

• Increase in foreign currency operations revenues from SDG 9,002 million at the end of 2021 to SDG 20,861 million at the end of 2022, an increase of 131.7%. This is due to the increase in both foreign exchange rate differences by SDG 5,861 million, foreign deposit profits by SDG 2,417 million, and letter of credit commissions by SDG 132 million.
• Increase in investment revenues from SDG 116 million at the end of 2021 to SDG 1,140 million at the end of 2022, an increase of 882.8%. This is due to the increase in profits from contributions in capital by SDG 955 million and profits from Central Bank Ijara certificates by SDG 71,725 million.
• Increase in banking operations revenues from SDG 2,376 million at the end of 2021 to SDG 15,912 million at the end of 2022, an increase of 569.7%. This is due to the increase in letter of guarantee commissions by SDG 8,246 million and government lending commissions by SDG 4,849 million. 2.3.3 Expenses: Expenses are defined as decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to participants. An increase in total expenses and provisions is observed from SDG 109,178 million at the end of 2021 to SDG 212,180 million at the end of 2022, an increase of 94.3%. This is due to the following:
• Increase in currency issuance expenses from SDG 58,833 million at the end of 2021 to SDG 95,669 million at the end of 2022, an increase of 62.6%. This is due to the increase in paper currency printing expenses by SDG 36,316 million.
• Increase in administrative and general expenses from SDG 50,015 million at the end of 2021 to SDG 115,816 million at the end of 2022, an increase of 131.56%. As a result of the changes in revenues and expenses mentioned above, the total deficit in the income statement increased from SDG 97,593 million at the end of 2021 to SDG 174,082 million at the end of 2022, an increase of 78.4%.

Bank of Sudan Central – Second Annual Report 2022 48 4.3 Changes in Equity Table (3-3) shows the changes in equity for 2022, which include capital, reserves, and retained earnings, compared to 2021. Table (3-3) Statement of Changes in Equity for the year ended 2021/12/31 Compared to the previous two years (Thousand SDG) Item Capital General Reserve Asset Replacement Reserve Asset Revaluation Reserve Other Reserves Retained Earnings Total Balance as of 2020/12/31 384,000 312,335 7,000 1,777,485 122,191 (27,158,638) (24,555,627) Asset Revaluation Reserve 0 0 Paid to Government Transferred to General Reserve 0 Prior years adjustment 10,646 10,646 2021 Annual Deficit (97,592,746) (97,592,746) Balance as of 2021/12/31 384,000 312,335 7,000 1,777,485 122,191 (124,740,738) (122,137,727) Paid to Government 0 0 Transferred to General Reserve - - - Prior years adjustment (105,195) (105,195) 2022 Annual Deficit (174,081,812) (174,081,812) Balance as of 2022/12/31 384,000 312,335 7,000 1,777,485 122,191 (298,927,745) (296,324,734)

Fath Al-Rahman Muhammad Sati Al-Amin General Manager of Public Accounts Department Acting Financial and Affairs Ali Al-Siddiq Barai Governor and Chairman of the Board of Directors

5.3 Cash Flows Table (3-4) shows the cash flows from operating, investing, and financing activities for the years 2022 and 2021, as well as the uses of cash for various activities and changes in cash balances during the mentioned years:

Bank of Sudan Central – Second Annual Report 2022 49 Table (3-4) Cash Flow Statement for the year ended 2022/12/31 (Thousand SDG) Item 2022 2021 Cash Flows from Operating Activities: Net Surplus Available for Distribution (174,081,812) (97,592,746) Depreciation of Fixed Assets 695,277 330,610 Provision for End of Service Gratuity 29,471,350 20,106,865 End of Service Gratuity Paid (3,868,920) (4,028,052) Increase in Advances Granted to Government (2,082,799,705) (4,309,015,944) Increase in Other Debit Accounts (41,328,908) (78,317,385) Increase in Current Accounts 684,496,474 1,416,771,929 Increase in Local Equivalent of Foreign Liabilities 924,933,476 2,543,183,374 Increase in Other Liabilities 233,542,113 1,248,702,836 Increase in Currency in Circulation 447,918,928 431,242,277 Gain on Sale of Fixed Assets (22,586) (2,782) Prior Years Adjustment (105,195) 10,646 Net Cash Flows from Operating Activities 18,850,492 1,171,391,628 Cash Flows from Investing Activities: Purchase of Fixed Assets (5,540,829) (1,452,590) Decrease in Constructions Under Execution 107,716 (318,279) Proceeds from Sale of Fixed Assets 163,322 26,296 Increase in Short-term Investments (108,267,350) (82,338,383) Increase in Long-term Investments (32,360,107) (87,811,681) Net Cash Flows Used in Investing Activities (145,897,248) (171,894,637) Cash Flows from Financing Activities: Net Cash Flows Used in Financing Activities - - Increase/Decrease in Cash and Cash Equivalents During the Year (127,046,756) 999,496,991 Cash and Cash Equivalents at Beginning of Year 1,104,347,214 104,850,223 Cash and Cash Equivalents at End of Year 977,300,458 1,104,347,214

Fath Al-Rahman Muhammad Sati Al-Amin General Manager of Public Accounts Department Acting Financial and Affairs Ali Al-Siddiq Barai Governor and Chairman of the Board of Directors

Bank of Sudan Central – Second Annual Report 2022 50 Independent Auditor's Report To the Board of Directors of the Central Bank of Sudan Opinion: We have audited the financial statements of the Central Bank of Sudan, which comprise the statement of financial position as at December 31, 2022, the income statement, the statement of changes in equity, and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, except for the potential effects of the matter described in the Basis for Opinion section of our report, the accompanying financial statements present fairly, in all material respects, the financial position of the Bank as at December 31, 2022, its financial performance and its cash flows for the financial year then ended in accordance with the financial accounting standards for financial reporting and international standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions, and are consistent with laws and regulations. Muhammad Hafiz Muhammad Nasr (FCCA) Deputy Auditor General for Bodies and Companies Republic of Sudan On 05/November/2025 AD Corresponding to 03/Jumada Al-Awwal/1446 AH

Bank of Sudan Central – Second Annual Report 2022 51 Central Bank of Sudan

Bank of Sudan Central – Second Annual Report 2022 52

Chapter Four Money Supply Presentation for 2022

Bank of Sudan Central – Second Annual Report 2022 53 Money Supply Presentation for 2022 1.4 Introduction This chapter reviews the nominal measures of money supply from the perspective of the deductive and empirical approaches, the factors influencing it, and the most important indicators affecting money supply, represented by the monetary multiplier and the velocity of money circulation, in addition to the formation and sources of the monetary base. It also covers monetary deepening and inflation. We find that the basis of the money creation process is definitively represented in the monetary base, which is controlled by the Central Bank. It consists of currency in circulation and bank reserves at the Central Bank, and its operation begins through the process of managing monetary policy, which primarily aims to achieve monetary stability. From this, the output element, which is represented in the monetary mass or money supply (M1, M2, etc.) outside the Central Bank, is derived. The deductive approach in defining money focuses on financial assets as they approach performing the primary function of money, which is a medium of exchange. We then arrive at the narrow measure of money (Narrow Money), denoted by the symbol (M1), which includes currency in circulation with the public and demand deposits (current accounts) and checks. The empirical approach focuses on the properties of money that make changes in money supply influential in economic policies. Money supply is linked to and affects Nominal GDP. The monetary authority (the Central Bank) can control it. It is known as the broad measure of money (Broad Money), denoted by the symbol (M2), which includes currency in circulation and current, savings, investment, and time deposits, in addition to margins on documentary credits and letters of guarantee. Based on this, we find that the narrow definition of money includes the most liquid elements, and the broader the definition, the less liquid the financial asset becomes, meaning that assets take a longer period to convert into cash liquidity. The table below shows the calculation of monetary aggregates: M0 M1 M2 Currency in circulation + Bank reserves at the Central Bank Currency with the public + Demand deposits M1 + Time, savings, and investment deposits + Margins on documentary credits and letters of guarantee To achieve monetary stability and reduce the inflation rate to a single digit, the Central Bank of Sudan's monetary policy for 2022 aimed to achieve a real GDP growth rate of 1.2% through targeting a monetary base growth rate of 13% and a nominal money supply growth rate of 22%. 2.4 Money Supply (M2) Table (4-1) shows the money supply and its influencing factors at the end of each of the years 2021 and 2022, while Figure (4-1) shows the percentage contribution of money supply components at the end of each of the years 2020 and 2021.

Bank of Sudan Central – Second Annual Report 2022 54 Table (4-1) Money Supply and its influencing factors at the end of each of the years 2021 and 2022 (Million SDG) Item Years % Change Rate of Change ** 2022 * 2021 % Contribution to Money Supply Change a/ Money Supply (M2) [1+2]: 4,927,294.0 3,296,958.8 1,630,335.2 49.4 1/ Current Means of Payment (M1) 2,568,419.7 1,833,718.5 734,701.2 40.1 45.1 1.1 Currency with the Public 1,245,561.9 905,705.6 339,856.3 37.5 20.8 1.2 Demand Deposits 1,322,857.8 928,012.9 394,844.9 42.5 24.2 2/ Quasi-Money 2,358,874.3 1,463,240.4 895,633.9 61.2 54.9 2.1 Local Currency 1,262,549.9 630,424.1 632,125.8 100.3 38.8 2.2 Foreign Currency 1,096,324.4 832,816.3 263,508.1 31.6 16.2 b/ Factors Influencing Money Supply [1+2+3]

1. Net Foreign Assets (3,966,660.6) (2,731,463.6) (1,235,197.0) 45.2 (75.8)
2. Revaluation 5,480,274.2 4,483,274.9 996,999.3 22.2 61.2
3. Net Domestic Assets 3,413,680.4 1,545,147.5 1,868,532.9 120.9 114.6 3.1 Banking System Claims on Public Sector 2,188,434.7 1,189,865.4 998,569.3 83.9 61.2 3.1.1 Central Government (Net) 1,895,875.1 953,764.0 942,111.1 98.8 57.8 3.1.2 Public Institutions 292,559.7 239,204.4 56,458.1 23.9 3.5 3.2 Banking System Claims on Private Sector 1,659,154.3 918,052.0 741,102.3 80.7 45.5 3.3 Other Net Items (433,908.6) (562,769.8) (128,861.2) 22.9 (7.9) Total (a) = (b) 4,927,294.0 3,296,958.8 1,630,335.2 49.4 100.0 c/ Percentage Contribution of Money Supply Components Currency with the Public / Money Supply (%) 27.5 25.3 Demand Deposits / Money Supply (%) 28.1 26.8 Quasi-Money / Money Supply (%) 44.4 47.9 d/ Contribution of Factors Influencing Money Supply (%) Net Foreign Assets / Money Supply (%) (82.8) (80.5) Revaluation / Money Supply (%) 136.0 111.2 Net Domestic Assets / Money Supply (%) 46.9 69.3 Source: Statistics Department - Central Bank of Sudan

• Adjusted data ** Preliminary data 1/ Includes current deposits in banks and current deposits for state and local governments and public institutions at the Central Bank of Sudan. 2/ Local currency equivalent for foreign investment, savings, and current deposits. 3/ Includes financing for the private sector, non-banking financial institutions, and state and local governments. Note: All foreign currencies are denominated in Sudanese Pounds.

Bank of Sudan Central – Second Annual Report 2022 55 Figure (4-1) Percentage Contribution of Money Supply Components at the end of 2021 and 2022 Source: Table (1-3) From Table (4-1) and Figure (4-1), it is clear that money supply increased from SDG 3,296,958.8 million in 2021 to SDG 4,927,294.0 million in 2022, at a nominal growth rate of 49.4%, exceeding the targeted rate of 27.4% compared to a growth rate of 153.2% in 2021. The components of money supply increased, as current means of payment and quasi-money increased. The current means of payment increased by 40.1%, with a contribution of 45.1% to the change in money supply, due to the increase in currency with the public and demand deposits, which constituted 51.5% and 48.4% respectively of the narrow measure (M1), which constitutes 52.1% of the broad measure of money supply (M2). As for quasi-money, it increased by 61.2%, with a contribution of 54.9% to the change in money supply, due to the increase in the volume of private sector time deposits in local currency with commercial banks by 100.3%, with a contribution of 70.6% of quasi-money and 38.8% of money supply at the end of 2022. It is noted that the percentage contribution of quasi-money to money supply increased from 44.4% in 2021 to 47.9% in 2022, an increase of 3.5%. Meanwhile, the percentage contribution of demand deposits decreased from 28.1% in 2021 to 26.8% in 2022. Similarly, the percentage contribution of currency with the public decreased from 27.5% in 2021 to 25.3% in 2022. 1.2.4 Factors Influencing Money Supply The factors influencing money supply include both net foreign assets, revaluation, and net domestic assets.

Bank of Sudan Central – Second Annual Report 2022 56 From Table (4-1), it is clear that the deficit in net foreign assets (banking system assets in foreign currencies minus liabilities in foreign currencies) increased from negative SDG 2,731,463.6 million in 2021 to negative SDG 3,966,660.6 million in 2022, an increase of 45.2%. This is due to the increase in the Central Bank of Sudan's foreign liabilities by 41.3% at the end of 2022, which is attributed to the increase in the volume of non-resident deposits at the Central Bank by 39.5%. It is also noted that the revaluation item increased by 22.2%, with a contribution of 61.2% to the change in money supply, due to the change in the exchange rate of the dollar against the Sudanese pound. Net domestic assets increased from SDG 1,545,147.5 million in 2021 to SDG 3,413,680.4 million in 2022, an increase of 120.9%, with a contribution of 114.6% at the end of 2022 compared to 58.2% at the end of 2021. This is attributed to the increase in net financing granted by the banking system to the public sector by 83.9%, with a contribution of 53.4% of net domestic assets. This is also due to the increase in net direct financing to the central government and the increase in financing granted to public institutions at a lower rate at the end of 2022, and the increase in banking financing granted to the private sector by 80.7%, with a contribution of 39.7% of net domestic assets at the end of 2022 compared to a contribution of 105.7% at the end of 2021. 2.2.4 Money Supply Growth Rate (2017-2021): Figure (4-2) Money Supply Growth Rate for the period (2018-2022) Source: Appendix (4) Figure (4-2) shows the general trend of the money supply growth rate during the period (2018-2022). The decrease during the two years 2018-2019 is attributed to the decrease in both financing granted by commercial banks to the private sector, direct financing to the central government, the difference in the purchase price and allocation of gold revenues to the central government, and the revaluation item of assets and liabilities for the Central Bank of Sudan and commercial banks, due to the change in the dollar exchange rate against the Sudanese pound from SDG 6.9 per dollar at the end of 2017 to SDG 47.6.

47.6 111.7 60.1 88.8 153.2 49.4 0 20 40 60 80 100 120 140 160 180 2018 2019 2020 2021 2022 % Money Supply Growth Rate

Central Bank of Sudan – Annual Report, Second Sixtieth, 2022 57 As for the significant decline in the curve in 2019, it is due to the relative stability in the exchange rate. The curve returned to an upward trend in 2020 and 2021, due to the large increase in government borrowing from the banking system to finance the general budget deficit, in addition to the significant change in the exchange rate in 2021. 3.2.4 Main Sources of Monetary Expansion Table (4-2) illustrates the main sources of monetary expansion at the end of each of the years 2021 and 2022. Table (4-2) Main Sources of Monetary Expansion at the End of Each of the Years 2021 and 2022 Million Sudanese Pounds

Item	2021 **	2022 *	Change	Change Rate %	Contribution Rate to Money Supply Expansion in Item (%)
Central Bank of Sudan:
Revaluation of Assets and Liabilities (1)	4,568,664.4	5,636,712.9	1,068,048.50	23.4	65.5
Temporary Government Borrowing	337,105.5	864,009.9	526,904.40	156.3	32.3
Payments to Cover Other Government Liabilities	528,171.3	693,712.2	165,540.90	31.3	10.2
Commercial Banks:
Private Sector Financing	918,052.0

Second Sixtieth Annual Report 2022 – Central Bank of Sudan 72 Total assets of operating banks increased from SDG 3,518,274.9 million in 2021 to SDG 5,334,554.8 million in 2022, a growth rate of 51.6% in 2022, resulting from an 84.0% increase in balances with other banks; and total banking finance to the private sector by 75.4%, local currency by 59.4%, and balances with foreign correspondents by 57.2%. On the liabilities side, the foreign correspondents item increased by 131.8% due to the exchange rate increase, and deposits also increased. Public institutions' deposits increased by 106.4%, and capital and reserves by 102.7%, while government deposits decreased by 70.3%. Table (5-5) and Figure (5-1) show total banking deposits at the end of 2021 and 2022.

Table (5-5) Total Banking Deposits at the End of 2021 and 2022 1 (SDG Million)

Description	Central and State Government	Public Institutions	Private Sector	Total
Current Deposits:
2021	37,129.7	24,0

Second Annual Report 2022 - Central Bank of Sudan 85

1.4.2.5 Financing Granted to Microfinance Banks

The Central Bank of Sudan continued to implement its policies aimed at employing a percentage not less than 12% of the total financing portfolio for each microfinance bank during 2022, whether through wholesale financing to microfinance institutions or direct financing to their clients, or through joint portfolios, cooperative societies, and microfinance.

Table (5-11) shows the volume of microfinance granted by banks at the end of 2021 and 2022.

Table (5-11) Volume of Microfinance Granted by Banks at the End of 2021 and 2022 (Million SDG)

| Statement | 2021* | 2022 | Rate of Change % | | :------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sixty-Second Annual Report 2022 – Central Bank of Sudan 96

Table (5 – 24) Government Participation Certificates (Shahama) Issuances for 2021 and 2022

Statement	Rate of Change %	2022 Number of Certificates	2022 Value (Million SDG)	2021 Number of Certificates	2021 Value (Million SDG)
Subscription	(39.1)	9,727,600	4,863.8	15,965,800	7,982.9
Renewals	7.9	65,768,200	32,884.1	60,956,400	30,478.2
Liquidations	28.8	11,085,200	5,542.6	8,609,800	4,304.9
Net Certificate Issuances	(5.7)	64,410,600	32,205.3	68,312,400	34,156.2
Average Profit %	2.6	20.0		19.5

Source: Sudan Financial Services Co. Ltd.

Table (5-24) shows that the volume of subscriptions in government participation certificates (Shahama) decreased by 39.1% in 2022, compared to a decrease of 23.9% in the previous year 2021. Meanwhile, renewals increased by 7.9% in 2022, compared to 7.5% in 2021. Liquidations also increased by 28.8% by the end of 2022. Net certificate issuances decreased by 5.7% by the end of 2022.

Table (5-25) shows the profit distribution ratios for government participation certificates (Shahama) during 2022.

Table (5 – 25) Profit Distribution Ratios for Government Participation Certificates (Shahama) During 2022

Quarter of 2022	Issuance Date	Profit Ratio (%)
First Quarter	2021/01/01	19.6
Second Quarter	2021/04/01	20.3
Third Quarter	2021/07/01	20.7
Fourth Quarter	2021/10/01	19.4

Source: Sudan Financial Services Co. Ltd.

Table (5-25) shows an increase in the average profit distribution ratios for government participation certificates (Shahama) from 19.5% in 2021 to 20.0% in 2022, at a rate of 2.6%.

2.2.3.5 Government Investment Sukuk (Sarh) Work on issuing these Sukuk began in 2003 by Sudan Financial Services Co. Ltd. in the form of Mudarabah. They are managed and marketed in the primary market through the company and accredited financial brokerage firms. The term of these certificates ranges between 2 and 6 years.

Sixty-Second Annual Report 2022 – Central Bank of Sudan 97

Government Investment Sukuk (Sarh) aim to gather national savings, encourage investment, manage liquidity at the aggregate economic level through what is known as open market operations, develop local capital markets, employ savings in government projects for infrastructure, health, education, and water sectors in various Sudanese states, and reduce inflationary effects.

Table (5-26) shows the sales of Government Investment Sukuk (Sarh) at the end of 2021 and 2022.

Table (5 – 26) Government Investment Sukuk (Sarh) Sales at the End of 2021 and 2022

Entity	Rate of Change %	2022 Number of Certificates Sold	2022 Value (Million SDG)	2022 Value % of Total Contribution	2021 Number of Certificates Sold	2021 Value (Million SDG)	2021 Value % of Total Contribution
Central Bank of Sudan	0.0	2,611,036	261.0	17.6	2,611,036	261.1	17.6
Banks	(33.6)	2,984,930	298.5	20.1	4,497,967	449.8	30.3
Companies and Funds	(3.7)	5,458,279	545.8	36.8	5,669,579	566.9	38.3
Public	80.5	2,681,551	268.2	18.1	1,486,260	148.6	10.0
Ministry of Finance, Economic Planning	94.6	1,087,747	108.8	7.4	558,701	55.9	3.8
Total	0.0	14,823,543	1,482.3	100.0	14,823,543	1,482.3	100.0

Source: Sudan Financial Services Co. Ltd.

Table (5-26) shows that the total number of Sarh Sukuk sold remained unchanged at 14,823,543 Sukuk with a value of SDG 1,482.3 million at the end of both 2021 and 2022. The number of Sukuk sold to the public increased from 1,486,260 Sukuk with a value of SDG 148.6 million in 2021 to 2,681,551 Sukuk with a value of SDG 268.2 million in 2022, at a rate of 80.5%. Similarly, the certificates sold to the Ministry of Finance, Economic Planning increased from 558,701 Sukuk with a value of SDG 55.9 million in 2021 to 1,087,747 Sukuk with a value of SDG 108.8 million in 2022, at a rate of 94.6%. Meanwhile, the number of certificates sold to banks decreased from 4,497,967 Sukuk in 2021 to 2,984,930 Sukuk in 2022, at a rate of 33.6%. The number of Sukuk sold to companies and funds also decreased from 5,669,579 Sukuk in 2021 to 5,458,279 Sukuk in 2022, at a rate of 3.7%.

3.2.3.5 Khartoum Refinery Asset Ijara Certificates (Shama) Work on these certificates began in 2010, issued in the form of Ijara to mobilize resources from investors through a Sharia-compliant agency contract, then to employ these resources to purchase the refinery's assets and lease them to the Ministry of Finance, Economic Planning as an operational Ijara to finance the refinery. These certificates aim to provide profitable investment opportunities, in addition to providing real financial resources for the state without pressure from borrowing from the Central Bank.

Sixty-Second Annual Report 2022 – Central Bank of Sudan 98

Table (5-27) shows the sales of Khartoum Refinery Asset Ijara Certificates (Shama) at the end of 2021 and 2022.

Table (5 – 27) Status of Shama Certificates at the End of 2021 and 2022

Entity	Rate of Change %	2022 Number of Certificates Sold	2022 Value (Million SDG)	2022 Value % of Total Contribution	2021 Number of Certificates Sold	2021 Value (Million SDG)	2021 Value % of Total Contribution
Central Bank of Sudan	0.0	2,401,233	1,200.6	63.46	2,401,233	1,200.6	63.46
Banks	4.7	1,002,855	501.4	26.50	958,194	479.1	25.32
Companies and Funds	(15.9)	237,833	118.9	6.28	282,652	141.3	7.47
Public	16.7	1,413	0.7	0.04	1,255	0.6	0.03
Ministry of Finance, Economic Planning	0.0	140,666	70.3	3.72	140,666	70.3	3.72
Total	0.0	3,784,000	1,891.9	100.00	3,784,000	1,891.9	100.00

Source: Sudan Financial Services Co. Ltd.

Table (5-27) shows that the total number of certificates sold remained unchanged at 3,784,000 certificates with a value of SDG 1,891.9 million at the end of both 2021 and 2022. This is due to the absence of new subscriptions or liquidations until 2027 AD.

4.2.3.5 Sudanese Electricity Distribution Company Asset Ijara Certificates (Shasha) Work on these certificates began in 2013 AD. They represent an investment fund with an average term of 4 years, established to mobilize resources from investors through a Mudarabah contract to purchase the assets of the Sudanese Electricity Distribution Company and lease them to the Ministry of Finance, Economic Planning as an operational Ijara to finance the operational expenses of the Sudanese Electricity Distribution Company. The purpose was to provide profitable investment opportunities for investors and to provide real financial resources for the state without inflationary pressures, in addition to developing the investment fund industry in the country.

Table (5-28) shows the status of Sudanese Electricity Distribution Company Asset Ijara Certificates (Shasha) at the end of 2021 and 2022.

Sixty-Second Annual Report 2022 – Central Bank of Sudan 99

Table (5 – 28) Status of Shasha Certificates at the End of 2021 and 2022

Entity	Rate of Change %	2022 Number of Certificates Sold	2022 Value (Million SDG)	2022 Value % of Total Contribution	2021 Number of Certificates Sold	2021 Value (Million SDG)	2021 Value % of Total Contribution
Central Bank of Sudan	0.0	93,720	46.9	2.1	93,720	46.9	2.1
Banks	0.0	1,260,567	630.3	28.1	1,260,567	630.3	28.1
Companies and Funds	0.0	1,612,327	806.2	35.9	1,612,327	806.2	35.9
Public	0.0	0	0.0	0.0	0	0.0	0.0
Ministry of Finance, Economic Planning	0.0	1,518,645	759.2	33.9	1,518,645	759.2	33.9
Total	0.0	4,485,259	2,242.6	100.0	4,485,259	2,242.6	100.0

Source: Sudan Financial Services Co. Ltd.

Table (5-28) shows that the total number of certificates sold remained unchanged at 4,485,259 certificates with a value of SDG 2,242.6 million at the end of both 2021 and 2022. This is due to the absence of new subscriptions or liquidations.

3.3.5 Promotion Company for Financial Investment This company aims to achieve immediate settlements for all transactions related to the purchase and sale of securities on behalf of clients. The company also acts as an arm of the Central Bank of Sudan in the secondary market to contribute to achieving the objectives of monetary policy through open market operations, in addition to promoting all securities and financial products of Sudan Financial Services Company in both primary and secondary markets.

Table (5-29) shows the volume of activity of the Promotion Company at the end of 2021 and 2022.

Table (5 – 29) Promotion Company Activity at the End of 2021 and 2022 (Million SDG)

Statement	2021	2022	Rate of Change %
Secondary Market	1,384.3	1,411.5	2.0
Primary Market	459.7	448.9	(2.3)

Source: Promotion Company for Financial Investment

Table (5-29) shows an increase in the Promotion Company's activity contribution in the secondary market by 2.0% in 2022, compared to a decrease of 27.1% in the previous year 2021, due to an increase in the trading rate (buying and selling). Meanwhile, the company's activity volume in the primary market decreased by 2.3% in 2022, compared to an increase of 20,658.3% in the previous year 2021. This was attributed to the absence of new subscriptions in issuances.

Sixty-Second Annual Report 2022 – Central Bank of Sudan 100

4.3.5 Deposit Insurance Fund Company The Deposit Insurance Fund was established in 1996 AD by a law for the Deposit Insurance Fund, with contributions from the Ministry of Finance, Economic Planning, the Central Bank of Sudan, and banks. The Deposit Insurance Fund aims to insure bank deposits, especially small depositors' deposits, when the Central Bank of Sudan decides to liquidate, merge, or withdraw the license of any bank in the banking system. It thus serves as a branch of the financial safety net for the banking system, working to strengthen confidence in the banking system. It also plays a reformative or curative role in improving the conditions of weak banks within the decisions taken by the Central Bank of Sudan to achieve financial safety for the banking system. In addition to this, it plays a preventive role complementary to the supervisory role of the Central Bank of Sudan, which involves working to stabilize and ensure the safety of banks subject to the fund's insurance and strengthening confidence in public deposits by insuring them (especially small depositors), as well as by regularly analyzing their financial positions. The fund's management pays special attention to the preventive role and ensuring its effectiveness in detecting weaknesses in any bank early, which helps in taking appropriate corrective measures in consultation and coordination with the Central Bank of Sudan through a joint committee that holds regular periodic meetings for coordination.

Thus, deposit insurance is complementary to the Central Bank's insurance, as the fund explicitly insures deposits, while the Central Bank implicitly insures bank deposits through supervision, inspection, reform, and regulation, and by setting monetary policies, guidelines, preventive instructions, and determining reserve ratios, provisions, and others. Ultimately, the decision to merge or liquidate, and payment to depositors, is made by the Central Bank of Sudan through the Deposit Insurance Fund, with payment instructions according to the law.

Table (5-30) shows the volume of contributions to the Deposit Insurance Fund resources at the end of 2021 and 2022.

Sixty-Second Annual Report 2022 – Central Bank of Sudan 101

Table (5 – 30) Volume of Contributions to the Deposit Insurance Fund Resources at the End of 2021 and 2022 (Million SDG)

Contributors	2021 Contribution %	2021	2022 Contribution %	2022	Rate of Change %
Banks	43.2	402.0	39.4	874.0	117.4
Ministry of Finance, Economic Planning	6.6	61.0	5.9	131.0	114.8
Central Bank of Sudan	6.6	61.0	5.9	131.0	114.8
Owners of Investment Deposits 1	43.7	407.0	48.8	1,081.0	165.6
Total	100.0	931.0	100.0	2,217.0	138.1

Source: Deposit Insurance Fund

1. Paid by banks on behalf of the owners of those deposits by deducting it from the principal of their deposits.

Table (5-30) shows an increase in the volume of contributions to the fund from SDG 931.0 million at the end of 2021 to SDG 2,217.0 million at the end of 2022, at a rate of 138.1%. This is due to the increase in the volume of insured deposits in the banking system, as annual contributions are a percentage of the average total insured deposits in the banking system.

5.3.5 Khartoum Stock Exchange The Khartoum Stock Exchange operates under the Khartoum Stock Exchange Law for Financial Securities of 2016, with the aim of regulating and supervising financial markets and ensuring equal opportunities for traders in securities, as well as protecting small investors. One of its most important features is working to transform part of society's savings into investments that help in capital financing, which is one of the most important factors of production. In addition, it works to expand awareness and establish new markets for trading securities. It also allows expert houses to provide specialized consultations for those wishing to trade in financial securities. The market status was also legalized by separating the supervisory authority from the executive authority and granting the market board the right to take necessary measures to protect the interests of shareholders in the event of any harm to the market or traders.

1.5.3.5 Key Functions of the Khartoum Stock Exchange The stock market is considered one of the most important financial intermediation institutions in the contemporary economy. It performs another complementary function to financial institutions such as banks, insurance companies, and others. The key functions of the Khartoum Stock Exchange can be summarized as follows:

1. Encouraging savings and developing investment awareness among citizens and creating suitable conditions for investing savings in financial securities in a way that benefits the citizen and the Sudanese economy.

Sixty-Second Annual Report 2022 – Central Bank of Sudan 102

2. Working to expand and enhance private ownership of productive assets in the national economy and transfer public ownership of assets to the widest segments of society.
3. Developing and growing the issuance market by regulating and monitoring the issuance of financial securities and determining the conditions and requirements that must be met in issuance prospectuses when offering financial securities for public subscription by the public.
4. Developing and encouraging investment in securities and working to create the appropriate investment climate for them.
5. Providing all factors that help facilitate and speed up the liquidation of funds invested in financial securities in a way that serves investors' desires.
6. Establishing optimal and fair trading principles among investor categories and ensuring equal opportunities for traders in financial securities, especially for small investors.

2.5.3.5 Khartoum Stock Exchange General Index The Khartoum Stock Exchange General Index includes 30 companies, which are called "Index Companies", representing the most liquid 67 companies listed on the market under the eight stock sectors. It is symbolized by (KSE30).

Table (5-31) and Figure (5-6) show the Khartoum Stock Exchange General Index during the period (2018-2022).

Table (5 – 31) Khartoum Stock Exchange General Index During the Period (2018-2022) (Point)

Statement	2018	2019	2020	2021	2022
Khartoum Stock Exchange Annual Index	13,317.4	15,964.1	18,254.5	20,455.3	74,031.1
Rate of Change (%)	216.9	19.9	14.3	12.1	261.9

Source: Khartoum Stock Exchange

Sixty-Second Annual Report 2022 – Central Bank of Sudan 103

Figure (5 – 6) Khartoum Stock Exchange General Index During the Period (2018–2022)

Source: Data from Table No. 5 – 31

Table (5-31) and Figure (5-6) show an increase in the Khartoum Stock Exchange Annual Index from 20,455.3 points in 2021 to 74,031.1 points in 2022, at a rate of 261.9%. This increase is due to the decision of the Khartoum Stock Exchange Board of Directors regarding activating the trading of shares in public contribution companies in the secondary market during the period 1-14 September 2022 AD, where the price limits were raised from 15% to 50% (decrease/increase) for each trading session. Also, the trading commission for shares was reduced to 50%. This, in turn, led to a significant increase in the market values for the shares of some companies, which was reflected in the large increase in the market index.

3.5.3.5 Khartoum Stock Exchange Market Capitalization Table (5-32) shows the Khartoum Stock Exchange Market Capitalization during the period (2018-2022).

Table (5 – 32) Khartoum Stock Exchange Market Capitalization During the Period (2018-2022) (Million SDG)

Statement	2018	2019	2020	2021	2022
Market Capitalization	47,939	58,883	75,965	101,289	2,241,863
Rate of Change (%)	141.7	22.8	29.0	33.3	2,113.3

Source: Khartoum Stock Exchange

Sixty-Second Annual Report 2022 – Central Bank of Sudan 104

Table (5-32) shows an increase in the Khartoum Stock Exchange Market Capitalization from SDG 101,289 million in 2021 to SDG 2,241,863 million in 2022, at a rate of 2,113.3%. This increase is due to the decision of the Khartoum Stock Exchange Board of Directors regarding activating the trading of shares in public contribution companies in the secondary market during the period 1-14 September 2022 AD, where the price limits were raised from 15% to 50% (decrease/increase) for each trading session. Also, the trading commission for shares was reduced to 50%. This, in turn, led to a significant increase in the market values for the shares of some companies, which was reflected in the large increase in market capitalization.

Table (5-33) shows the trading activity of shares in the secondary market of the Khartoum Stock Exchange by sector at the end of 2021 and 2022.

Table (5 – 33) Traded Shares by Sector at the End of 2021 and 2022

Sector	2022 Number of Traded Shares (Thousand Shares)	2022 Number of Executed Contracts 1	2022 Trading Volume (Million SDG)	2022 Contribution Ratio %	2021 Number of Traded Shares (Thousand Shares)	2021 Number of Executed Contracts	2021 Trading Volume (Million SDG)	2021 Contribution Ratio %
Banks and Investment 2	609,919	355	8,095.6	87.63	491,823	302	579.8	68.76
Insurance	2,894	10	7.4	0.08	73	9	0.6	0.07
Commercial	1,896	70	461.9	5.00	163	47	16.4	1.95
Industrial	2,370	52	55.3	0.60	3,023	11	1.5	0.17
Agricultural	0	0	0.0	0.00	1,000	2	1.0	0.12
Communications and Media	139	16	1.6	0.02	339	19	2.0	0.24
Investment and Development 3	25,856	88	594.1	6.43	10,856	47	15.9	1.88
Brokerage Companies	8,059	21	21.9	0.24	1,445	5	226.0	26.81
Total	651,134	612	9,237.8	100.00	508,722	442	843.2	100.00

Source: Khartoum Stock Exchange

1. Refers to the buying/selling process that takes place between the buyer and seller during a trading session (executed deals).
2. Includes banks licensed by the Central Bank of Sudan to engage in banking, financial, investment, and brokerage activities.
3. This sector refers to companies that invest in educational, health, and real estate institutions, such as development and services institutions. It was previously called the Services sector.

Sixty-Second Annual Report 2022 – Central Bank of Sudan 105

Table (5-33) shows an increase in the trading volume of shares in the market from SDG 843.2 million at the end of 2021 to SDG 9,237.8 million at the end of 2022, at a rate of 995.6%. The number of traded shares also increased from 508.7 million shares to 651.1 million shares during the same period, at a rate of 28.0%. Meanwhile, the number of executed contracts increased from 442 contracts to 612 contracts, at a rate of 38.5%.

Traded shares were concentrated in the Banks and Investment sector with a contribution of 87.63% in 2022, compared to 68.76% in 2021, followed by the Investment and Development sector with 6.43% in 2022, compared to 1.88% in 2021. The Commercial sector accounted for 5.0% at the end of 2022, compared to 1.95% at the end of 2021. The Industrial sector, Brokerage Companies sector, and Insurance sector accounted for 0.60%, 0.24%, and 0.08% respectively in 2022.

Table (5-34) shows the trading activity of Sukuk in the secondary market of the Khartoum Stock Exchange by sector at the end of 2021 and 2022.

Table (5 – 34) Traded Sukuk by Sector at the End of 2021 and 2022

Sector	2022 Number of Traded Sukuk (Thousand Sukuk)	2022 Number of Executed Contracts	2022 Trading Volume (Million SDG)	2022 Contribution %	2021 Number of Traded Sukuk (Thousand Sukuk)	2021 Number of Executed Contracts	2021 Trading Volume (Million SDG)	2021 Contribution %
Sukuk and Funds	17,969	859	4,110.5	36.2	23,693	880	4,374.6	23.2
Investment Certificates *	15,767	7,890	7,247.8	63.8	32,438	19,629	14,483.3	76.8
Total	33,736	8,749	11,358.2	100.0	56,131	20,509	18,857.9	100.0

Source: Khartoum Stock Exchange

• All certificates are Government Participation Certificates (Shahama).

Table (5-34) shows a decrease in the trading volume of Sukuk from SDG 18,857.9 million in 2021 to SDG 11,358.2 million in 2022, at a rate of 39.8%. The number of Sukuk also decreased from 56.1 million Sukuk in 2021 to 33.7 million Sukuk in 2022, at a rate of 39.9%. The number of executed contracts decreased from 20,509 contracts in 2021 to 8,749 contracts in 2022, at a rate of 57.3%.

6.3.5 Insurance Companies Insurance companies aim to protect individuals and properties from material losses arising from the occurrence of a risk without the insured causing it, in exchange for a premium paid by the insured to the insurance company, provided that the insurance company compensates the insured for the losses resulting from the realization of the risk against him. Insurance covers areas such as property insurance, marine insurance, aviation, energy, agricultural insurance, motor insurance, in addition to medical and engineering insurance, and various types of accident insurance, among others. The surpluses and resources of insurance companies are employed in paying claims, in addition to investing in bank deposits, shares, government investment certificates (Shahama), bonds, lands, real estate, and any other investments that do not violate Islamic Sharia. Furthermore, insurance companies bear 20% of the total premiums as general and administrative expenses. The remaining amount, after deducting general and administrative expenses, technical provisions, commissions, and provisions for doubtful debts, taxes, and zakat, is considered a surplus. What remains is considered the distributable surplus and is distributed at a minimum of 65% to policyholders and a maximum of 25% to employees.

Sixty-Second Annual Report 2022 – Central Bank of Sudan 106

Below is a summary of the activity of insurance companies for each of the years 2020 and 2021 1:

1.6.3.5 Gross and Net Premiums for Insurance Companies Gross insurance premiums include all amounts collected from the insured, while net insurance premiums represent the amounts after deducting the amounts paid to reinsurance companies as premiums.

Table (5-35) shows the gross and net premiums for insurance companies at the end of 2020 and 2021.

Table (5 – 35) Gross and Net Premiums for Insurance Companies at the End of 2020 and 2021 (Million SDG)

Statement	2020	2021*	Rate of Change %
Gross Premiums	22,285	75,929	240.7
Net Premiums	13,458	42,296	214.3

Source: National Authority for Insurance Supervision

• Adjusted data

Table (5-35) shows an increase in gross insurance premiums from SDG 22,285 million in 2020 to SDG 75,929 million in 2021, at a rate of 240.7%. Net premiums also increased from SDG 13,458 million in 2020 to SDG 42,296 million in 2021, at a rate of 214.3%.

2.6.3.5 Gross and Net Claims for Insurance Companies Gross claims represent the total amounts paid by insurance companies to the insured as compensation, while net claims represent the net amounts paid to the insured after deducting reinsurance companies' claims.

Table (5-36) shows the gross and net claims for insurance companies at the end of 2020 and 2021.

Table (5 – 36) Gross and Net Claims for Insurance Companies at the End of 2020 and 2021 (Million SDG)

Statement	2020	2021*	Rate of Change %
Gross Claims	11,069	33,829	205.6
Net Claims	5,772	15,615	170.5

Source: National Authority for Insurance Supervision

• Adjusted data

1. Data on insurance companies' premiums and claims are slow for one year due to lack of data availability.

Sixty-Second Annual Report 2022

Second Sixty-Second Annual Report 2022 – Central Bank of Sudan 108 Table (5 – 38) National Agency Activity in the Field of Export Finance at the End of 2021 and 2022 (SDG Million)

Statement, 2021, 2022, Rate of Change % Exhausted Finance, 10.0, 0.0, (100.0) Net Finance (Repayment), 10.0, 10.0, 0.0 Outstanding Finance at End of Period, 10.0, 0.0, (100.0) Source: National Agency for Export Finance and Insurance.

It is clear from Table (5 – 38) that no new financing operations were executed during 2022; as the total outstanding finance, amounting to SDG 10 million, was liquidated as a result of the liquidation of the agency's contribution to the Gum Arabic portfolio in 2021.

8.3.5 Interbank Liquidity Management Fund The Fund was established in August 2014 under the provisions of the Financial Instruments Law of 1995 and the establishment order issued by the Central Bank of Sudan No. 1/2014 dated 21/8/2014 with the approval of the Minister of Finance and Economic Planning. The Fund is managed by the Financial Investment Bank and is subject to

Annual Report 2022 – Central Bank of Sudan 123 Table (6-6) shows an increase in total current expenditures from 1,510.3 billion Sudanese Pounds in 2021 to 3,189.5 billion Sudanese Pounds in 2022, at a rate of 111.2%. The item of employee compensation constituted 34.1% of total current expenditures, as it increased from 290.8 billion Sudanese Pounds in 2021 to 1,087.4 billion Sudanese Pounds in 2022. Support for strategic goods increased from 649.7 billion Sudanese Pounds in 2021 to 778.5 billion Sudanese Pounds in 2022, at a rate of 19.8%. State transfers increased from 211.8 billion Sudanese Pounds in 2021 to 444.2 billion Sudanese Pounds, at a rate of 109.7%, representing 13.9% of total current expenditures. Expenditure on the purchase of goods and services also increased from 174.8 billion Sudanese Pounds to 449.0 billion Sudanese Pounds, at a rate of 156.8%, with a contribution of 14.1% of total current expenditures. Spending on social benefits during 2022 reached 206.2 billion Sudanese Pounds, compared to 126.1 billion Sudanese Pounds in 2021, at a rate of 63.6%, representing 6.5% of total current expenditures. The cost of financing, subsidies, and other expenditures, in addition to national obligations, also contributed 6.3% of total current expenditures.

:Development Expenditures (b) Table (7-6) shows national development expenditures in local and foreign currency, while Table (8-6) and Figure (8-6) show

Bank of Sudan – Annual Report 2022 138 Figure (7-7) shows an upward trend in the growth rate of total consumption expenditure during the period (2018-2022), where the growth rate of total consumption expenditure increased at an accelerating pace from 65.1% in 2018 to 317.7% in 2021, then decreased to 108.1% in 2022.

Investment Expenditure 2-2-3-7 Investment expenditure is defined as capital expenditure on new projects in public utility and infrastructure sectors, in addition to projects related to economic activity for producing goods and services in productive and service sectors such as industry, agriculture, health, education, tourism, and housing. Meanwhile, gross investment is defined as the change in the total market value of new establishments and durable means of production, plus the value of the change in inventory held by businesses.

Figure (8-7) illustrates the general trend of investment expenditure growth rates during the period (2018-2022)

Figure (8-7) General Trend of Investment Expenditure Growth Rate During the Period (2018-2022)

Source: Table No. (4-7)

Investment Expenditure Growth Rate (%) 2018: 40.8 2019: 112.9 2020: (2.3) 2021: 962.1 2022: 96.2

Figure (8-7) shows an upward trend in the growth rate of total investment expenditure during the period (2018-2022), where the growth rate of investment expenditure increased to 112.9%

Bank of Sudan – Second Annual Report 2022 and Sixtieth 155

Maize Maize production decreased from 5,152 thousand metric tons in the 2020/2021 season to 3,107 thousand metric tons in the 2021/2022 season, a decrease of 39.7%. This was due to a 9.1% decrease in cultivated areas from 25,850 thousand feddans to 23,491 thousand feddans, and a 20.9% decrease in productivity from 249.0 kg/feddan to 197.0 kg/feddan.

Millet Millet production decreased from 1,918 thousand metric tons in the 2020/2021 season to 901.0 thousand metric tons in the 2021/2022 season, a decrease of 53.0%. This is attributed to a 22.1% decrease in cultivated area from 13,282 thousand feddans to 10,352 thousand feddans, and a 25.6% decrease in productivity from 183.0 kg/feddan to 136.0 kg/feddan.

Wheat Wheat production decreased from 900.0 thousand metric tons in the 2020/2021 season to 602.0 thousand metric tons in the 2021/2022 season, a decrease of 33.1%. This was also due to a 25.9% decrease in cultivated areas from 852.0 thousand feddans to 631.0 thousand feddans, and a 10.6% decrease in productivity from 1,095 kg/feddan to

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Table (8-14) Number of Hospitals, Health Centers, Primary Health Units, and Bed Rate per 100,000 Population for the years 2020 and 2021

| States | 2021

Million US Dollars

Importers	Value (F.O.B) 2022*	Share % Contribution 2022*	Value (F.O.B) 2021**	Share % Contribution 2021**
UAE	2,076.2	50.8	2,967.8	61.9
Egypt	635.4	15.6	496.4	10.4
China	576.1	14.1	614.5	12.8
Saudi Arabia	317.3	7.8	365.3	7.6
Turkey	187.2	4.6	87.3	1.8
India	94.9	2.3	87.0	1.8
France	57.6	1.4	47.2	1.0
Ethiopia	18.1	0.4	8.5	0.2
Lebanon	18.3	0.4	24.9	0.5
Qatar	18.6	0.5	19.0	0.4
Jordan	37.0	0.9	23.9	0.5
Syria	16.0	0.4	16.7

Table 10-3: Sudan's Capital and Financial Accounts for 2021 and 2022 (Million USD)

Item	2021	2022**	Change	% Change
Capital Account - 1	103.3	112.9	9.6	9.3
Assets	103.3	112.9	9.6	9.3
Capital Transfers	103.3	112.9	9.6	9.3
Government	103.3	112.9	9.6	9.3
Private Sector	0.0	0.0	0.0	0.0
Liabilities	103.3	112.9	9.6	9.3
Financial Account - 2 (Net Lending/Borrowing)	(1,316.2)	(3,791.1)	(2,474.9)	(188.0)
Net Acquisition of Financial Assets	1,688.5	(882.5)	(2,571.0)	(152.3)
Net Incurrence of Liabilities	3,004.7	2,908.6	(96.1)	(3.2)
Direct Investment 1-2	(468.6)	(573.5)	(104.9)	(22.4)
Net Acquisition of Financial Assets	54.2	0.0	(54.2)	(100.0)
Net Incurrence of Liabilities	522.9	573.5	50.6	9.7
Portfolio Investment 2-2	(14.1)	4.8	18.9	134.0
Net Acquisition of Financial Assets	(11.2)	5.4	16.6	(148.2)
Net Incurrence of Liabilities	3.0	0.5	(2.5)	(83.3)
Other Investments 3-2 (Net)	(1,942.1)	(3,075.7)	(1,133.6)	(58.4)
Net Acquisition of Financial Assets	536.7	(741.1)	(1,277.8)	(238.1)
Net Incurrence of Liabilities	2,478.8	2,334.6	144.2	5.8
Trade Facilities and Advances 1-3-2	(560.5)	(637.5)	(77.0)	(13.7)
Net Acquisition of Financial Assets	181.6	194.6	13.0	7.2
Net Incurrence of Liabilities	742.1	832.1	90.0	12.1
Loans 2-3-2	(1,342.6)	(1,368.0)	(25.4)	(1.9)
Net Acquisition of Financial Assets	0.0	0.0	0.0	0.0
Net Incurrence of Liabilities	(1,342.6)	(1,368.0)	(25.4)	(1.9)
Currency and Deposits 3-3-2	815.0	(1,067.5)	(1,882.5)	231.0
Net Acquisition of Financial Assets	349.7	(933.0)	(1,282.7)	(366.8)
Net Incurrence of Liabilities	(465.3)	134.5	599.8	128.9
Other Accounts 4-3-2	5.4	(2.7)	(8.1)	(150.0)
Net Acquisition of Financial Assets	5.4	(2.7)	(8.1)	(150.0)
Net Incurrence of Liabilities	0.0	0.0	0.0	0.0
Special Drawing Rights (SDR) Allocation 5-3-2	(859.4)	0.0	(859.4)	(100.0)
Reserve Assets 4-2	1,108.7	(146.7)	(1,255.4)	(113.2)

Source: Central Bank of Sudan

• Preliminary data ** Adjusted data *** Reserve assets include gold holdings.

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Capital Account 2-2-10 The capital account recorded an increase from $103.3 million in 2021 to $112.9 million in 2022, at a rate of 9.3%.

Financial Account 3-2-10 The financial account increased from $1,316.2 million in 2021 to $3,791.1 million in 2022, including net lending/borrowing. This increase of 188% is attributed to a rise in other investments from $1,960.7 million in 2021 to $3,075.7 million in 2022, at a rate of 58.4%. This is primarily due to a shift in the currency and deposits item to a negative amount of $1,067.5 million in 2022, compared to $815 million in 2021, at a rate of 231%.

International Investment Position 3-10 The International Investment Position is a statistical statement showing the value and composition of external financial assets and liabilities at a specific point in time. It represents claims of financial residents on non-residents in another economy (assets) and liabilities of financial residents to non-residents in another economy (liabilities). It includes various financial instruments, direct foreign investment, portfolio investment, other investments, and reserve assets.

International Investment Position statistics are recorded in the general balance sheet. The net international investment position is the total external financial assets minus total external financial liabilities. Therefore, if a country's external assets exceed its external liabilities, the net position is positive (creditor). Conversely, if external liabilities exceed external assets, the net position is negative (debtor). Any country with a positive net investment position is considered a net creditor internationally.

The net international investment position also expresses the accumulation of surpluses or deficits achieved in balance of payments, representing the difference between payments received and payments made during a specific period. It differs from the balance of payments, which records transactions between the domestic and foreign economies over a period, whether resulting in a surplus or deficit. The net international investment position is the cumulative result (balance) of annual or quarterly balance of payments.

The international investment position is usually linked to the opening value (start of period) and closing value (end of period).

Table 10-4 shows the International Investment Position at the end of 2021 and 2022.

1. For further clarification, reference can be made to the Sixth Edition of the Balance of Payments Guide issued by the International Monetary Fund in 2009.

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Table 10-4: International Investment Position at the end of 2021 and 2022 (Million USD)

Item	2021	2022**	Change	% Change
External Assets (by functional category)
Direct Investment	54.2	54.2	-	-
Portfolio Investment	150.1	209.7	59.6	39.7
Other Investments	9,442.5	8,552.0	(890.6)	(9.4)
Reserve Assets:
Gold (Monetary)	1,627.8	1,560.7	(67.1)	(4.1)
Special Drawing Rights (SDR)	1,080.5	1,027.1	(53.4)	(4.9)
Other Reserve Assets	277.7	131.0	(146.7)	(52.8)
Total External Assets	11,274.7	10,376.6	(898.1)	(8.0)
External Liabilities (by functional category)
Direct Investment	29,733.7	30,307.2	573.5	1.9
Portfolio Investment	300.8	301.3	0.5	0.2
Other Investments	74,940.9	77,220.6	2,279.7	3.0
Trade Credit and Advances	503,701.4	335,811.0	832.1	7.9
Foreign Loans	52,611.4	53,979.2	1,367.80	2.6
Currency and Deposits	10,708.8	10,843.2	134.5	1.3
Other Liabilities	0.0	0.0	0.0	0.0
Special Drawing Rights (SDR) Allocation	1,117.1	1,062.2	(54.9)	(4.9)
Total External Liabilities	104,975.4	107,829.2	2,853.8	2.7
Net International Investment Position (4)	(93,700.7)	(97,452.5)	(3,751.8)	(4.0)

Source: Central Bank of Sudan

• Preliminary data ** Adjusted data *** Includes currency and deposits with the Monetary Authority, other entities, bonds, financial derivatives, and other claims.

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Table 10-4 indicates that the International Investment Position showed a net external liability of $11,274.7 million at the end of 2022, compared to a net liability of $93,700.7 million at the end of 2021, at a rate of 4%. The balance of external assets (claims and assets) for all economic sectors valued in Sudan decreased from $10,376.6 million at the end of 2021 to $11,274.7 million at the end of 2022, by an amount of $898.1 million, at a rate of 8%. This is primarily due to a decrease in the balance of other investments by $890.6 million. The balance of external liabilities (obligations) for all economic sectors valued in the Sudanese economy increased from $104,975.4 million at the end of 2021 to $107,829.2 million at the end of 2022, at a rate of 2.7%. This is primarily due to an increase in the balance of other investments by $2,279.7 million, distributed between foreign direct investment, portfolio investment, and other investments. This was also due to an increase in the balance of long-term foreign loans by $1,367.80 million, as well as an increase in the trade facilities and advances item by $832.1 million and the currency and deposits item by $134.5 million. It is worth noting that the balance of Special Drawing Rights (SDR) decreased by an amount equivalent to $54.9 million, due to a decrease in the exchange rate of Special Drawing Rights against the US Dollar from 1.3996 in December 2021 to 1.3308 in December 2022.

External Debt 4-10 Table 10-5 shows the external debt position during 2021 and 2022, as well as the contribution of financing sources to the volume of Sudan's debt for 2022.

Table 10-5: Sudan's External Debt for 2021 and 2022 (Billion USD)

Financing Sources	2021	2022*	Total Debt	Principal Debt	Contractual Interest	Arrears Interest	% of Total Debt
Paris Club Non-Member Countries	31.6	34.3	15.7	4.2	14.4	50.2	34.3
Paris Club Member Countries	10.1	10.6	8.7	0.7	1.2	15.5	10.6
International Commercial Banks	6.5	7.1	3.5	0.3	3.2	10.4	7.1
Facilities	5.2	5.2	0.0	0.0	5.2	7.6	5.2
Ministry of Oil Financing	3.2	3.2	0.0	0.0	3.2	4.7	3.2
Regional and International Institutions	3.0	5.2	0.1	0.1	5.0	7.5	5.2
Source: www.imf.org (International Monetary Fund website)
Foreign Suppliers	2.8	2.8	0.0	0.0	2.8	4.1	2.8
Total	62.4	68.3	28.0	5.3	35.0	100.0	68.3

Source: Central Bank of Sudan - External Debt Unit

• Preliminary data ** Consists of various creditors, deposits, and financial facilities.

Note: Contractual interest is the interest rate agreed upon in the agreement. The table shows that Sudan's total obligations increased from $62.4 billion at the end of 2021 to $68.3 billion at the end of 2022. Arrears interest, calculated on obligations not paid by their due date, contributed to the increase in total debt at a rate of 9.5% across all financing sources. Considering the contribution of financing sources, Paris Club non-member countries hold the first rank with 50.2%, followed by Paris Club member countries at 15%, international commercial banks at 10.4%, facilities at 7.6%, regional and international institutions at 7.5%, Ministry of Oil financing at 4.7%, and foreign suppliers at 4.1%.

Sudan's External Debt Sustainability Indicators for 2021 and 2022 1-4-10 These indicators are used to measure the state's ability to service its debt and meet its external obligations under resources, in addition to the volume of total domestic product, as well as available financial resources such as government revenues and exports. It is worth noting that the external debt sustainability indicators are represented by:

• The internationally recognized standard measure: External Debt to GDP Ratio of 30%.
• The External Debt to Total Exports Ratio: 100%.
• The External Debt to Total Government Revenues Ratio: 200%.

Table 10-6 shows Sudan's External Debt Sustainability Indicators for 2021 and 2022.

Table 10-6: Sudan's External Debt Sustainability Indicators for 2021 and 2022

External Debt Sustainability Indicators	Standard Indicator (%)	Sudan's Indicators 2021	Sudan's Indicators 2022*
Total Debt to Total GDP Ratio	30	123.7	95.5
Total Debt to Total Exports Ratio	100	1,241.2	1,567.4
Total Debt to Total Government Revenues Ratio	200	1,517.4	1,313.3

Source: Central Bank of Sudan - External Debt Unit

• Preliminary data ** Adjusted data

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External Loans Disbursements and Repayments Position 2-4-10 Table 10-7 shows the position of external loans for 2021 and 2022.

Table 10-7: External Loans Disbursements for 2021 and 2022 (Million USD)

Financing Source	2021	2022*	% Contribution 2022
Islamic Development Bank - Jeddah	47.8	0.0	-
International Fund for Agricultural Development	0.0	1.7	100.0
Total	47.8	1.7	100.0

Source: Central Bank of Sudan - External Debt Unit

• Preliminary data The value of external loan disbursements in 2022 amounted to $1.7 million, from the International Fund for Agricultural Development only.

Table 10-8 shows the repayment of principal for external loans for 2021 and 2022.

Table 10-8: External Loans Principal Repayment for 2021 and 2022 (Million USD)

Financing Source	2021	2022*	% Contribution 2022
Islamic Development Bank - Jeddah	0.0	0.0	25.6
International Bank	0.0	0.0	22.2
International Fund for Agricultural Development	0.4	0.0	11.0
International Monetary Fund	0.0	0.0	1.6
African Development Bank	0.0	0.0	0.2
Total	0.4	0.0	60.6

Source: Central Bank of Sudan - External Debt Unit

• Preliminary data Note: Does not include principal arrears on outstanding loans. As observed from Table 10-8, the total repayment of external loans decreased from $60.6 million in 2021. Repayment was only $0.4 million in 2022, from the International Fund for Agricultural Development only.