Diversification of Islamic Financial Instruments
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3.4 CASE STUDY: SUDAN
3.4.1 SUMMARY 66
Sudan is a prominent centre for applying Islamic finance in all its aspects especially in the
African continent. It is also an interesting case study, as one of the two main OIC member
countries to have a 100% Islamic banking size. It has a long journey in transferring its banking
and financial sector into Shariah-compliant on regulatory and operational levels and that
motivated the authors for more exploration and analysis about this rich experience. Moreover,
governmental Sukuk in Sudan is probably a very good example that could be an inspiration for
other countries; therefore, more focus will be concentrated on various types of this Sukuk and
the features of each. The experience of Takaful and micro-Takaful in different sectors in Sudan
could also be beneficial for other countries, besides being an evidence of how non-banking
Islamic finance could be helpful in economic and social development. In the following case
study, we will present briefly the profile of Sudan, then we analyse the diversity in its Islamic
finance sectors, and finally we provide Islamic finance policy recommendations for both Sudan
and OIC member countries that could assist decision makers in developing Islamic finance
sectors in their countries.
3.4.2 INTRODUCTION
Sudan is an African country which is situated in North Africa bordered by Egypt, Eretria,
Ethiopia, Chad, Central African Republic and South Sudan. According to UNDP, over 97% of the
population in the north Sudan are Muslims at the year of 2011 (the year of division from the
south). Other religions in Sudan include Christianity (1.5%) and African traditional religion
(1.5%) (World Fact book)
The motivation behind choosing Sudan as a case study for this report was mainly because its
importance as an Islamic financial hub in the World and particularly on the African level.
According to IFSB Report Islamic financial services industry stability report for the year 2017,
the share of Islamic banking from the total banking system is 100%.
Brief Review for the Financial System in Sudan
During the period of English colonialism in Sudan, the banking system was restricted to foreign
banks only such as the Barclays Bank, Ottoman Egypt Bank and the National Bank of Egypt,
and Credit Lyonnais. However, following independence in 1956, the currency committee was
developed to issue a unified Sudanese currency that reflected the culture and the diversity in
Sudan and This was then followed by a law of the Central Bank of Sudan which was passed in
1959 and the bank started officially in 1960 as an organisation with its own legal and
contractual status, having litigation on its behalf (Babiker 2011).
In May 1970, a fundamental change took place in the banking system in Sudan. The
government decided to nationalise the entire commercial banking sector and severely
66 Authors for this case study: Magda Ismail Abdel Mohsin, she is currently an Associate Professor at INCEIF, The Global
University of Islamic Finance/KL, Malaysia. e-mail & Mhd Osama Alchaar, PhD student, INCEIF, e-mail: