Business and Economy

Sudan Economy

• Driven by agriculture and the extractive industries, GDP growth (3.4% in 2014) is
  projected at 3.1% in 2015 and 3.7% in 2016, with inflation anticipated to remain high (21.8% in 2015).
• National dialogue between government and opposition should lead to political reform, while implementing the Interim Poverty Reduction Strategy Paper should support inclusive growth and improve MDG achievement prospects.
• Geographic concentration has hindered business clustering and employment in lagging states, and specific spatial planning is needed to concentrate resources in urban agglomerations and stimulate employment in agriculture.

Overview

• Growth of Sudan’s gross domestic product (GDP) has been estimated at 3.4% in 2014 and is projected at 3.1% and 3.7% in 2015 and 2016, respectively. GDP should be driven by rain-fed agriculture, minerals and oil-transit fees.
• Domestic services grew by 3.1% and accounted for 45.6% of GDP in 2014. Services, however, typically provide low-productivity jobs. Inflation in Sudan, the highest in Africa and averaging 36.9% in 2013-14, is due to exchange-rate devaluations, unsterilized gold purchases and supply disruptions owing to civil conflicts. Although it is projected to drop to 21.8% in 2015 on the back of a tight policy stance, build-ups of inflationary pressures will increase the already high rates of poverty and unemployment. In the short and medium term, growth will be sustained by the revitalization of agriculture and increased production of mineral and non mineral exports, in addition to restraining inflation.
• A new IMF Staff-Monitored Program (SMP) and a five-year programme of economic reform (FYPER, 2015-19) were adopted in 2014, aimed at enhancing macroeconomic stability and sustaining inclusive growth. Policy makers must nonetheless face challenges stemming from the structural weaknesses of the economy and limited market penetration. The slow growth of credit to the private sector due to low financial intermediation and the crowding-out effects of fiscal operations have further restrained the formalization of business and job creation.
• Refusal, since 2014, of foreign correspondent banks to process transfers to and from Sudan in order to avoid violating US sanctions has tightened the foreign-exchange market and raised the costs of imported inputs.
• In this respect, effective outreach is needed to remove the US sanctions.
  Additionally, Sudan’s heavy external debt and volatile internal and external political environments could effectively weaken progress towards meeting the Millennium Development Goals (MDGs).
• Urbanization in Sudan has been propelled since the 1990s by worsening conditions in the rural areas and protracted civil conflicts. This has led to the development of slums and camps for the internally displaced, housing shortages in many cities and the proliferation of informality. Absence of a strategy for co-coordinating land use within the national development planning process has contributed to excessive urban growth lacking in structural transformation and specialization. A specific spatial strategy is needed to focus on maximizing the benefits of existing urban assets in order to spread entrepreneurial opportunity, while reviving the rural economy in order to reduce the potential risks and backlash related to economic clustering.

Natural Resources:

• Sudan is considered one of the richest countries it the world in terms of natural resources. It is endowed with fertile agricultural lands, potable wealth, minerals and tourist sites. Sudan is also characterized by its vast virgin areas and varied climates a matter that makes the country capable of the production of different cereals and horticultural crops.

Agricultural Lands:

• Sudan has areas that range between 300 to 400 million feddans of arable lands, only 40 million feddans of which are currently cultivated. Lands in Sudan include desert and semi-desert soils, clay plains, sand dunes, rocks soil and the black southern soils.
• Jabal Mara Mountain is the highest point above the sea level (more than 13,000 feet). There are also Nuba Mountains with it's beautiful scenery.

Water Sources: 

• Sudan is rich in water resources, whose major sources are:

1. Rains: the rainy season extends from the month of May to October. The rate of rainfall ranges annually between 25 mms in the far north, mostly desert, to 1500 mms in the south, mostly equatorial areas.
2. Rivers: The great River Nile which crosses the whole country from south to north. It has a number of tributaries mainly including the White Nile, the Blue Nile, Bahr Al-Zaraf, Bahr Al-Zaraf, Sobat River, Dindir, Rahad and River Atbara.
3. Underground Water: Sudan has underground water from different sources in its northern, southern, eastern and western parts. The total underground water reserves in the country are estimated at about nine billion cubic meters.

Climate:

• Sudan is characterized by varied climatic conditions, where there is the desert and semi-desert climate in the North, poor, rich savannah in the Central parts and the equatorial climates prevail in the Southern areas, besides moderate climates in areas with high altitudes, such as Jabal Mara area in the Western part of the country, Erkawit in the east and Nuba Mountain in Central Sudan.
• This climatic diversity has made Sudan capable of producing various types of cereals and horticultural crops.

Forests Resources:

• Forests in Sudan cover more than 40% of the total area of the country; the most important forestry products in Sudan include Gum Arabic, Timber and various kinds of forest fruits.

Natural Pastures:

• There are vast areas of natural pastures in the Sudan on which animal resources depend. These natural pastures need protection and renewal as well encouraging of settlement for the nomadic tribes by providing drinking water for human use and animals from the underground water resources in the area.

Animal Wealth:

• Sudan assumes the top place among the countries of the Middle East regarding the animal wealth and ranks the second in Africa. It has a national herd of about 135 million heads of livestock (cattle - Camels - Sheep - goats - horse species). The animal resources contribute considerably to the Gross Domestic Product (GDP) of the country.

Fish Resources:

• Sudan is characterized by the availability of natural water resources which are rich of feeds for fish. These water surfaces have great potentials for fishery production which are yet to be invested fully. There are great opportunities for fish production at the lakes of dams of Roseiris, Sinnar and Jabal Awlia and the Nuba Lake ol Aswan dam. Only 30% of the total fish resources in the country have been utilized so far.

Poultry Production:

• Modern poultry production, introduced recently in the country, has been successful in the Sudan.
• Poultry farms spread around the National Capital, Khartoum, and some other states of the country. Their production meets the needs of the local markets. Poultry production enjoys comparative advantage in Sudan.

Oil:

• The utilization of petroleum resources is considered as the biggest achievement realized by the country in recent years. Sudan has been importing oil against a bill of 400 million dollars a year (half of its revenues of foreign exchange) has now, after utilization of its oil resources as of August 1998, realized self - sufficiency and entered the club of oil exporting countries.

Mineral Resources:

• Sudan is endowed with a vast mineral wealth, which is still greatly unexploited. Sudan has deposits of gold, silver, iron. zinc, copper, chrome uranium, gypsum, mica and other metal used in building. As part of the country's utilization of its mineral resources, there is the project for gold mining in eastern Sudan undertaken by Aryab Company, which is a joint venture between Sudan and France.
  The company's production is continuously increasing. There are also a number of projects, which are under implementation, such as copper mining in south Darfur.