Sudan has a limited housing finance sector. As the mortgage market does not yet meet the breadth of the population who might afford a mortgage, most households still finance their housing independently, with savings or non-mortgage credit.
The lowest recorded interest rate on a mortgage in Sudan is 12 percent, as of September 2016, and requires at least a 50 percent down payment. The cheapest newly built house by a developer recorded by CAHF is US$ 16 000, which is for an 80 square metre unit. Cement prices are higher than the continental average, at US$ 11.00 for a 50-kilogram bag.
With an urbanisation rate of 2.77 percent, demand for affordable housing will remain strong, both for rental and purchase. Housing microfinance will play an important role in increasing the supply of housing, and efforts to increase access should be undertaken. The building and construction sector only makes up 3.4 percent of GDP, while only 311 000 serviced plots were distributed between 1956 and 2007. With a good macroeconomic environment, sound policy, better data and increased access to affordable credit, an enabled housing market can increasingly provide housing that the average household in Sudan can afford.
Find out more information on the housing finance sector of Sudan, including key stakeholders, important policies and housing affordability:
- Access to Finance
- Housing Affordability
- Housing Supply
- Property Markets
- Housing Policy and Regulations
- Housing Sector Opportunities
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2016 edition, which has up-to-date profiles for 51 African countries.Download yearbook
The Republic of the Sudan, comprised of 18 states, located in north-east Africa, is bordered by seven countries. Its geography is dominated by the Nile and its tributaries. It has a total area of 1 861 484 km2 and a population of 36 108 853. The urban population is estimated at 33.8% of the total population and the capital of Khartoum has a population of 5.129 million (2015). 46.5% (2009) of the population live below the poverty line. Poverty is high with 19.80% living below the national poverty line. The GINI index of Sudan is 35.3 (2013) with a global rank of 105. Ongoing conflicts, lack of basic infrastructure in large areas, and reliance by much of the population on subsistence agriculture keep close to half of the population at or below the poverty line.
Sudan gained independence from British/Egyptian Condominium Rule in 1956. An Islamist military regime has ruled since 1989. Sudan has been, during most of the 20th century, embroiled in civil wars and continues to suffer from protracted social and armed conflicts in Southern Kordofan, Darfur, and the Blue Nile states. Sudan is also subject to comprehensive U.S sanctions. In 2011, the country lost three-quarters of its oil production due to the secession of South Sudan and therefore faces serious economic challenges. The oil sector had driven much of Sudan’s GDP growth since 1999 with a GDP per capita of US$4 300. The GDP growth rate is estimated at 3.5% with an industrial production growth rate of 2.7%. Government revenue is US$6.518 billion and expenditure US$9.754 billion with a public expenditure budget of exports at US$4.392 billion and imports at US$8.287 billion. Government reserves are a gross national saving of 9.5% of GDP with a budget surplus of -3.8% of GDP and a fiscal deficit at zero percent of the GDP and public debt of 72.1% of GDP and an account balance of -US$6.457 billion (all at 2015 estimates).
The country is attempting to develop non-oil sources of revenues, such as gold mining, while carrying out an austerity program to reduce expenditures. As the world’s largest exporter of gum Arabic, Sudan produces 75-80% of the world’s total output. Agriculture continues to employ 80% of the workforce. The country has many mineral resources and an abundance of agricultural land but is also subjected to many environmental challenges and periodic persistent droughts.
Sudan introduced a new currency, SDG, still called the Sudanese pound, following South Sudan’s secession, but the value of the currency has fallen since its introduction. Khartoum formally devalued the currency in June 2012, when it passed austerity measures that included gradually repealing fuel subsidies. Sudan also faces high inflation, which reached 47% in November 2012 but subsided to just under 18% in 2015.
The building and construction sector make up 3.4% of the GDP. The services sector growth rate decreased from 3.4% in 2012 to 2.1% in 2013. This was due to the decrease in the growth rate of its subsectors inculding building and construction from 5.8% in 2012 to 2% in 2013. Inflation is estimated at 16.9% (2015) with the housing inflation rate being 19.5%. Consumer price indices put housing at a 14.2% spending weight compared to 8.3% for transport (2013). Northern Kordofan state recorded the highest average inflation rate of 48.8%, while Northern state registered the lowest rate of 25.3% in 2013.
Access to Finance
The Sudan ranks at number 167 in terms of the ease of “getting credit”. It is estimated that “… agriculture activity contributed 19.9% of the total flow of banks finance during the year 2013; so the flow of banks finance extended to agricultural activity increased from SDG 2,873 million (US$460 million) in 2012 to SDG 6,721 million (US$1 075 million) in 2013, by 133.9%, the industrial sector contributed 16.2%, also the local trade sector contributed 12.9%, the transport and storage sector contributed 10.2%, construction sector contributed 9%, while the other sectors contributed 18.1% of total flow of finance during 2013.” 
The performance of the banking system, that is the Central Bank of Sudan (CBOS), other operating banks as well as non-bank financial institutions can be assessed by consulting the CBOS balance sheet and the performance of ancillary companies and units which assist the CBOS in implementing its different policies and programs, which include the performance of Microfinance Unit, Credit and Information Scoring Agency (CIASA), and Electronic Banking Services company (EBS).
According to the CBOS policy bank policies aim at attracting more national savings to provide the financial resources required for fuelling economic activities. Thus the CBOS aims to remove restrictions on opening new bank branches and towards simplifying the procedures for opening current, saving and investment accounts. The report also outlines the intention to open CBOS branches in all states and expand its e-banking services. The adoption of these policies led to the significant increase in bank deposits (from SDG 39.9 million or US$6.4 million in 2012 to SDG 44.5 million or US$7.1 million in 2013), an increase in ATMs (from 865 machines in 2012 to 903 in 2013), meaning an increase in ATM cards by 224.7%. There was also an increase in bank branches from 629 in 2012 to 652 in 2013 at a rate of 3.7%.According to the IMF, 2016 there are two non-governmental specialised banks, 29 operating banks including one government owned commercial bank, two government owned specialised banks, 23 private commercial banks, one investment bank, and two branches of foreign banks.”
The total assets of the banks doing business in the Sudan rose from SDG 67.0 billion (US$10.7 billion) in 2012 to SDG 77.5 billion (US$12.4 billion) in 2013 at a rate of 15.6%, of which the total outstanding balance of finance granted by banks increased from SDG 30.5 billion (US$4.9 billion) to SDG 37.6 billion (US$6 billion) at the rate of 23.4%. The outstanding balance of finance extended to the private sector increased from SDG 28.0 billion (US$4.5 billion) to SDG 34.4 billion (US$5.5 billion) at the rate of 22.7% indicating that the financial safety pertaining to banks improved during 2013; the capital adequacy ratio increased from 12% to 16.6%, while the bad/doubtful debit ratio decreased from 11.9% to 8.4%. There was an increase in credit to the private sector from SDG 28 036 million (US$4.5 billion) in 2012 to SDG 34 409 (US$5.5 billion) in 2013 with a rate of 22.7%, where the agriculture, industry, real estate and construction sectors acquired the largest share of total bank finance. The number of companies operating in the field of insurance and reinsurance in 2013 were 15, remaining the same as in 2012, of which 14 are insurance companies and one reinsurance company. The insurance companies conduct business in the fields of real estate and other areas.
Regarding microfinance, the CBOS report indicates that outstanding microfinance increased from SDG 2 000 million (US$320 million) in 2012 to SDG 2 400 million (US$384 million) in 2013 at a rate of 20% and the total microfinance operations executed by the CBOS Microfinance Unit –including the partially and entirely liquidated transactions- amounted to SDG 385 million (US$6.2 million) by the end of 2013. The percentage of the actual performance reached 5% of total banking finance in 2013 compared to 4.9% in 2012.
However, microloans are temporarily suspended because of a declaration dated 2014 – the notice prohibits all banks and financial agencies from providing funding for various activities, including land and real estate development but excluding funding to social housing and economic housing (al iskaan al shabi and al iskan al igtisadi) based on the parameters defined by the National Fund for Housing (al sandoog al gomi lil iskaan).
There is a system of granting ownership of residential units based on a “mortgage pledge” where the money is lent with the property as security for the loan. The number of years for repayment depends on the individual regulations of the bank in question. The mortgage interest rate varies from 0-12% per year. Down payments vary from 0-50% of the price of the residential unit. The loan is granted on condition that the repayments do not exceed 33% of the income of the applicant. There are other government and private agencies that provide housing support – such as the Investment for Social Grants Agency (al jihaaz al istismari lil damaan al ijtimai) – these have their own unique repayment process, repayment period and guarantees as security for the loans. However, the property will still remain in the ownership of the agency providing the loan until the repayment is completed.
The number of years needed to raise the capital funds to build a house are shown to range from 20-83 years based on the type of house being considered and assuming that an individual saves 25% of their income. A 4-storey apartment building on a 300 sqm plot may cost (according to 2010’s prices) as much as four detached houses, each on a 300 sqm plot (total land area of 1 200 m2).
In a housing survey on incremental housing, it was found that 78% used their own funds to expand while 17% rented out their units.
The cost of a square meter varies from SDG 3 500-4 500 (US$560-US$115) for a reinforced concrete structure and SDG 2 500-2 750 (US$400-US$440) for load-bearing structures. A bag of cement (50kg) costs SDG 1400 (US$11); the cost of concrete is SDG 172 (US$27.5) per cubic meter; the cost of sand is SDG 140 (US$22.4) per cubic meter. Khartoum is seeing exorbitant real estate prices (urban land reaching levels of US$ 1 300/m2 (author estimates).
Only 311 000 serviced plots had been distributed between the period 1956 and 2007 despite the fact that this is considered a major housing program in the Sudan. Only 43% of those plots had been developed. Core-house units are built through various government programmes but it is also evident that this incremental option does not address the high demand for housing. Informality was estimated at 60% in 1990. The National Housing Fund (a government agency) delivers social housing (sakn shabi) and economic housing (sakn igtisadi). Both products target low-income groups and are low density located on the periphery of Khartoum. The National Housing Find has the following track record:
- The applicants for social housing rose from 6 372 (2003) to 17 966 (2015), peaking at 34 963 in 2011.
- 70 603 families have been housed in social and economic housing; economic housing is a total of 30% of all Social Housing
The Fund also supports housing for those employed by the Khartoum Local Government and those employed under the auspices of the Trade Unions (sakn fiawi) in the Region (wilaya). 50% of apartments (2-3 rooms + 2 bathrooms + kitchen + hall +living room (saloon) = 120 sqm) are retained for this category of applicants. The buildings are 3 stories high, reinforced concrete structures, with three layout options, and currently number 1216 units. No information is provided on the luxury housing category. The website does list difficulty in recovery of rental costs of investment housing which implies that the financial model depends on support from the rentals recovered through this category.
Housing in the Sudan is dominated by various types of site and service projects, which have resulted in the private sector taking over the market, and various forms of core and incremental housing – much of which is privately developed. Experimentation with hire/purchase options through a revolving fund, serviced plots, employer-supported housing and core unit sales, are in reality not even beginning to address the demand in terms of numbers. It is also important to note that while ownership remains an important component of the housing market, not everyone can afford to own. Many people living and working in Khartoum consider their rural contexts as their real, permanent address and their presence in the city is perceived as being temporary.
There are two processes for land registration, one for land that is purchased from the Ministry of Planning and another set of procedures for land not purchased from the Ministry. The process for the latter depends on the type of ownership of the land. Generally, non-registered land is in one of these two categories: Pre-1970 land is freehold; after 1970 is leasehold and the Planning Ministry determines duration and type of lease. Registering property in the Sudan has a total of six procedures and takes up to nine days at a cost of 2.6% of the land value.
Housing Policy and Regulations
The history of government housing programmes can be summarised into four national strategies over the years, namely; First, Second, Third and Forth Housing Strategies. These strategies are aligned to government development and financial programmes during the same periods.
Government housing and social housing funding was stopped completely in the 80s. To address this issue and the declining economy, the government decided to make use of its extensive land resources in “site and service” schemes and self-build projects. This became known as the Third Housing Strategy.
The predominance of “site and service” as a government delivery model had serious negative repercussions on Khartoum State including sprawl and low density, expense of infrastructure, ruralisation of the peripheries, increased land values, increased demand and lack of products and increased city management costs. This led to the termination of the third housing strategy in 2005 and the launch of the Fourth Housing Strategy in 2007 – underpinned by the Khartoum Structure Plan (2007-2027).
The National Fund for Housing was launched in 2001 aiming to provide housing for low-income groups, but also extending to all categories of housing and income groups in a more holistic approach towards the whole housing market. The programme is under the auspices of The Khartoum Local Government and implements the programmes of the Ministry of Planning and Development. The Fund implements projects to certain specifications and hands over ownership in 3-12 years depending on the income levels of the beneficiaries. Towards the building of Social Housing, the Fund implements the following:
- Establishing and supporting factories and workshops for building materials,
- Involvement in all engineering services related to the building of the various types of housing,
- Purchasing and importing of building materials,
- Geology and quarrying services.
The Fund has also promoted alternative building materials and techniques aiming towards passive thermal control and light-weight roofs. In line with the government policy of privatisation (khaskhasa), the Fund implements its projects by appointing private contractors. The funding of Social Housing is based on the installments paid by the beneficiaries. The difference between the actual/real cost of building and services and the re-payments is covered by the Fund. Three types of products are provided:
- Social housing (sakn shabi)
- Economic housing (sakn igtisadi)
- Luxury housing (sakn fakhir)
The first category, which is identified as being the Fund’s core programme, also has three sub-categories:
- Social housing as part of the housing strategy/plan (al khuta)
- Social housing exempted/outside of the strategy/plan
- Improved social housing
For the first sub-category, the applicant must go through the Local Committee (lajnaa shabiya). The process takes 3 months till the applicant is notified if they are elligible, after which the applicant must pay the deposit/down payment. The second sub-category has the same process as the first but the process is faster. The third category differs in the size, number of rooms and other specifications. Economic housing has the benefit of being immediately available for purchase, in good locations, easy procedures, accessible to anyone with any income level. The minimum specifications are as follows – with variations in building materials and methods):
- room + kitchen + traditional toilet + boundary wall
- 2 rooms + kitchen + toilet + boundary wall
Recommended plot sizes and densities for the Khartoum Metroplitan Region in the Doxiadis plan 1960-1990 were as follows:
- 500m2 in 1st class areas with a net polulation density target of 80 persons/hectare
- 400m2 in 2nd class zones with a net population density of 95 persons/hectare
- 200m2 in 3rd class areas with a net polulation density of 190 persons/hectare
Housing Sector Opportunities
During the 80s the government would have spent 415 Pounds for a “site and service” plot as compared to 6 400 Pounds for a house; “sites and service” provided 15 times more the products. This perpetuated the sprawl evident today. Socio-political dynamics created by this situation could be considered as an opportunity. Peripheral areas show that different groups of people, coming from different parts of the country build differently – demonstrating a wealth of local experience and heritage that needs to be considered in future housing plans. The terms first, second, third and fourth class housing is still being used by professionals and laypeople alike indicates an approach that exacerbates the problems of housing quality and access.
Well-located rental housing could be considered for a range of densities, configurations and affordability levels. The combination of housing and job opportunities and the establishment of social housing institutions could address capacity issues at implementation level. Instead of failed attempts to fulfill demand quotas, government role could rather be re-directed towards building institutions capable of implementing projects, at scale, towards achieving larger strategic city plans.