ECONOMY
Sudan's economy is booming on the back of increases in oil production, high oil prices, and large inflows of foreign direct investment. GDP growth registered more than 10% per year in 2006 and 2007. However, the Darfur conflict, the aftermath of two decades of civil war in the south, the lack of basic infrastructure in large areas, and a reliance by much of the population on subsistence agriculture ensure much of the population will remain at or below the poverty line for years despite rapid rises in average per capita income. The country continued taking some steps toward transitioning from a socialist to a market-based economy, although the government and governing party supporters remained heavily involved in the economy.
Sudan's primary resources are agricultural, but oil production and export have taken on greater importance since October 2000. Although the country is trying to diversify its cash crops, cotton, and gum arabic remain its major agricultural exports. Grain sorghum (dura) is the principal food crop, and millet and wheat are grown for domestic consumption. Sesame seeds and peanuts are cultivated for domestic consumption and increasingly for export. Livestock production has vast potential, and many animals, particularly camels and sheep, are exported to Egypt, Saudi Arabia, and other Arab countries. However, Sudan remains a net importer of food. Problems of irrigation and transportation remain the greatest constraints to a more dynamic agricultural economy. .
The country's transportation facilities are heavily concentrated in the North and consist of one 4,800-kilometer (2,748-miles), single-track railroad with a feeder line, supplemented by limited river steamers, Sudan Airways, and about 1,900 kilometers (1,200 miles) of paved and gravel road--primarily in greater Khartoum, Port Sudan, and the North. Some north-south roads that serve the oil fields of central/south Sudan have been built; and a 1,400 kilometer. (840 miles) oil pipeline goes from the oil fields via the Nuba Mountains and Khartoum to the oil export terminal in Port Sudan on the Red Sea.
Sudan's limited industrial development consists of agricultural processing and various light industries located in Khartoum North. In recent years, the GIAD industrial complex introduced the assembly of small autos and trucks, and some heavy military equipment such as armored personnel carriers and the proposed "Bashir" main battle tank. Although Sudan is reputed to have great mineral resources, exploration has been quite limited, and the country's real potential is unknown. Small quantities of asbestos, chromium, and mica are exploited commercially.
Extensive
petroleum exploration began in the mid-1970s and might produce
all of Sudan’s needs. Significant finds were made in the
Upper Nile region and commercial quantities of oil began to be
exported in October 2000, reducing Sudan’s outflow of foreign
exchange for imported petroleum products. There are indications
of significant potential reserves of oil and natural gas in southern
Sudan, the Kordofan region and the Red Sea province.
Sudan
is seeking to expand its installed capacity of electrical generation
of around 300 megawatts--of which 180 mw is hydroelectric and
the rest, thermal. Considering the continuing U.S. economic, trade,
and financial sanctions regime, European investors are the most
likely providers of technology for this purpose. More than 70%
of Sudan’s hydropower comes from the Roseires Dam on the
Blue Nile grid. Various projects are proposed to expand hydropower,
thermal generation, and other sources of energy, but so far the
government has had difficulty arranging sufficient financing.
The Merowe
dam project has received a boost from various Arab funds. The
Arab Fund for Economic and Social Development donated $150 million,
the Abu Dhabi Development Fund $100 million, the Kuwaiti Development
Fund $150 million, and the Saudi Fund $150 million. The Sultanate
of Oman may finance the dam power plant with $106 million. The
Merowe dam, if built, would have a capacity of 1,250 mw. It would
be built at the Nile’s fourth cataract. Egypt has not voiced
major objections on the issue of Nile water diversion, which Sudan’s
hydroelectric project would entail. The estimated total cost of
the dam is $1.8 billion.
Historically,
the U.S., the Netherlands, Italy, Germany, Saudi Arabia, Kuwait,
and other Organization of Petroleum Exporting Countries (OPEC)
have supplied most of Sudan’s economic assistance. Sudan’s
role as an economic link between Arab and African countries is
reflected by the presence in Khartoum of the Arab Bank for African
development. The World Bank had been the largest source of development
loans.
Sudan
will require extraordinary levels of program assistance and debt
relief to manage a foreign debt exceeding $21 billion, more than
the country’s entire annual gross domestic product (GDP).
During the late 1970s and 1980s, the International Monetary Fund
(IMF), World Bank, and key donors worked closely to promote reforms
to counter the effect of inefficient economic policies and practices.
By 1984, a combination of factors--including drought, inflation,
and confused application of Islamic law--reduced donor disbursements,
and capital flight led to a serious foreign-exchange crisis and
increased shortages of imported inputs and commodities. More significantly,
the 1989 revolution caused many donors in Europe, the U.S., and
Canada to suspend official development assistance, but not humanitarian
aid.
However,
as Sudan became the world’s largest debtor to the World
Bank and International Monetary Fund by 1993, its relationship
with the international financial institutions soured in the mid-1990s
and has yet to be fully rehabilitated. The government fell out
of compliance with an IMF standby program and accumulated substantial
arrearages on repurchase obligations. A 4-year economic reform
plan was announced in 1988 but was not pursued. An economic reform
plan was announced in 1989 and implementation began on a 3-year
economic restructuring program designed to reduce the public sector
deficit, end subsidies, privatize state enterprises, and encourage
new foreign and domestic investment. In 1993, the IMF suspended
Sudan’s voting rights and the World Bank suspended Sudan’s
right to make withdrawals under effective and fully disbursed
loans and credits. Lome Funds and European Union (EU) agricultural
credits, totaling more than 1 billion euros, also were suspended.
Sudan produces about 401,000 barrels per day (b/d) (2005 est.) of oil, which brought in about $1.9 billion in 2005 and provides 70% of the country’s total export earnings. Although final figures are not yet available, these earnings may have risen to an estimated $2 billion as of the end of 2004. The oil production was expected to reach 500,000 barrels by 2005. With a resolution of its 21-year civil war, Sudan and its people can now begin to reap the benefit from its natural resources, rebuild its infrastructure, increase oil production and exports, and be able to attain its export and development potential.
In 2000-2001, Sudan’s current account entered surplus for the first time since independence. In 1993, currency controls were imposed, making it illegal to possess foreign exchange without approval. In 1999, liberalization of foreign exchange markets ameliorated this constraint somewhat. Exports other than oil are largely stagnant. The small industrial sector remains in the doldrums, and Sudan’s inadequate and declining infrastructure inhibits economic growth.
GDP (2007, purchasing power parity): $107.86 billion.
GDP annual growth rate (2007): 12.8%.
Per capita income GDP (2007): $2,500.
Avg. annual inflation rate (2007): 5.3%.
Natural resources: Modest reserves of oil, natural gas, gold, iron ore, copper, and other industrial metals.
Agriculture: Products--cotton, peanuts, sorghum, sesame seeds, gum arabic, sugarcane, millet, livestock.
Industry: Types--motor vehicle assembly, cement, cotton, edible oils and sugar refining.
Trade (2007 est.): Exports--$9.156 billion: crude oil and petroleum products, cotton, gold, sorghum, peanuts, gum arabic, sugar, meat, hides, live animals, and sesame seeds. Major markets--Egypt, Persian Gulf states, Saudi Arabia, Malaysia, China, South Korea. Imports (2007 est.)--$8.262 billion: oil and petroleum products, oil pipeline, pumping and refining equipment, chemical products and equipment, wheat and wheat flour, transport equipment, foodstuffs, tea, agricultural inputs and machinery, industrial inputs and manufactured goods. Major suppliers--European Union, China, Malaysia, Canada, U.K., Italy, Germany, Saudi Arabia, Egypt, the Persian Gulf states, and surrounding East African nations.
Fiscal year: January 1-December 31.
