Sudan SME Catalyser

After 30 years of international isolation and centralised government control of the economy during Omar al-Bashir’s authoritarian regime, a new and vibrant private sector began to emerge in the early 2020s. Companies that were not connected to the former regime or the powerful military and business elites created the potential for a new way of economic growth. The Sudan SME Catalyser, which has been designed by AECF with financial support from the German Federal Ministry of Economic Cooperation and Development (BMZ) via KfW, was conceived as a way of channelling concessional capital to these companies that were struggling to gain traction because they lacked the connections to raise finance and access markets.

In April 2023, simmering tensions between the Government of Sudan and security forces of the Rapid Support Forces exploded into violence that has killed thousands, displaced a quarter of the population and precipitated a famine that is likely to affect millions by early 2025. As at the beginning of 2024, two planting seasons have already been significantly impacted as farmers cannot access inputs or do not plant because of security fears. Food stocks are rapidly diminishing, and the crisis is failing to attract the attention of global actors distracted by other pressing security challenges in Ukraine and the Middle East.

Whilst conflict and insecurity affect all aspects of Sudanese life, some parts of the country are less directly affected than others. Many people have sought refuge from the fighting in the breadbasket areas of the south and east, where food production potential still remains strong. With much of the food processing infrastructure in Khartoum either destroyed or inaccessible, the country needs to re-orientate its food processing sector to these areas closer to primary production.

As a response, the Sudan SME Catalyser has been reoriented to an emergency financing instrument to support companies in the south and east, as well as those moving to this area, with investment and working capital to kick start agricultural production and food processing. Grants will be provided through a competitive process to small and medium sized enterprises with the potential to significantly improve the availability of food in the country, create employment and improve incomes. Selected companies will also be provided with advisory support to enable them to re-tool their business processes, make new markets and find new suppliers so that they can face the current market realities.

AECF is partnering with local business advisory support structures to roll out the competition process in the early second quarter of 2024, with the intention of proving the first funding by June. Applications will be reviewed on a regular basis until funding is fully absorbed, with grants available from €50,000 to €750,000 and an overall fund size of €23.5m.