Economy of Sudan
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|Economy of Sudan|
|Fiscal year||Calendar Year|
|Trade organisations||Arab League, WTO|
|GDP||$58.77 billion |
|GDP growth||3.9% |
|GDP per capita||$1,579.83 (2012 est.)|
|GDP by sector||agriculture: 44.5%; industry: 45.3%; services: 10.2% (2010 est.)|
|Inflation (CPI)||32.1% (2013 est.)|
below poverty line
|9% (2012 est.)|
|Labour force||11.92 million (2007 est.)|
|Agriculture: 45%; Industry: 40%; Services: 15% (2011 est.)|
|Unemployment||13.7% (2012 est.)|
|Main industries||oil, cotton ginning, textiles, cement, edible oils, sugar, soap distilling, shoes, petroleum refining, pharmaceuticals, armaments, automobile/light truck assembly|
|Ease of doing business rank||149th|
|Exports||$8.464 billion (2009 est.)|
|Export goods||oil and petroleum products; cotton, sesame, livestock, groundnuts, gum arabic, sugar|
|Main export partners|| United Arab Emirates 63.2%
Saudi Arabia 9.2%
Ethiopia 5.3% (2012 est.)
|Imports||$6.823 billion (2009 est.)|
|Import goods||foodstuffs, manufactured goods, refinery and transport equipment, medicines and chemicals, textiles, wheat|
|Main import partners|| Macau, China 18.0%
Saudi Arabia 7.9%
United Arab Emirates 5.2% (2012 est.)
|Gross external debt||$36.27 billion (31 December 2009 est.)|
|Public debt||104.5% of GDP (2009 est.)|
|Revenues||$9.046 billion (2009 est.)|
|Expenses||$10.83 billion (2009 est.)|
|Foreign reserves||US$14.300 billion (31 December 2011 est.)|
Until the second half of 2008, Sudan's economy boomed 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. From 1997 to date, Sudan has been working with the IMF to implement macroeconomic reforms, including a managed float of the exchange rate. Sudan began exporting crude oil in the last quarter of 1999. Agricultural production remains important, because it employs 80% of the work force and contributes a third of GDP. 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. In January 2007, the government introduced a new currency, the Sudanese Pound, at an initial exchange rate of $1.00 equals 2 Sudanese Pounds.
Sudan's primary resources are agricultural, but Cotton, Peanuts, Arabic Gum, and Sesame seed production and export are taking on greater importance since October 1933. Although the country is trying to diversify its cash crops, Cotton and Peanuts remain its major agricultural exports. Grain sorghum (dura) is the principal food crop, and [Wheat] is 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 Cows, sheep, and Camels, are exported to Saudi Arabia, and other Arab countries. However, Sudan remains a net importer of food. Problems of investment finance, production and transportation remain the greatest constraints to a more dynamic agricultural economy.
Sudan has 84 million hectares (200 million fedans) of arable land and less than 20% is cultivated. Major agricultural projects such as the Gezera Scheme in Gezira state are to make Sudan food self-sufficient. Sudan is one of the world potential breadbaskets and Sudan is nicknamed as the Arab world food basket as it accounts for 45% of arable land in the Arab world. However Sudan needs much foreign investments and assistance to extract these resources.
History since independence
Current GDP per capita of Sudan grew 46% in the Sixties reaching a peak growth of 170% in the Seventies. But this proved unsustainable and growth consequently scaled back to 34% in the Eighties. Finally, it shrank by 26% in the Nineties.
Until the early 1970s Sudan's agricultural output was mostly dedicated to internal consumption. In 1972 the Sudanese government became more pro-Western, and made plans to export food and cash crops. However, commodity prices declined throughout the 1970s causing economic problems for Sudan. At the same time, debt servicing costs, from the money spent mechanizing agriculture, rose. In 1978 the International Monetary Fund (IMF) negotiated a Structural Adjustment Program with the government. This further promoted the mechanized export agriculture sector. This caused great economic problems for the pastoralists of Sudan.
During the late 1970s and 1980s, the 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 began implementing 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 EU agricultural credits, totaling more than one billion Euros, also were suspended.
Sudan has a developed Infrastructure compared to most of sub sahara Africa and many projects are taking place to develop it even further all across the country. Some parts of the country are better off -- mainly in the northern states -- due to oil productions and the wealth gained from it. The telephone system in Sudan is well equipped by regional standards, and is maintained by modern standards. One of Sudan's greatest projects was the Merowe Dam. Khartoum was rewarded the Arab Capital of Culture in 2005. Modern buildings in Khartoum are on the rise due to the economic growth. However, since South Sudan independence a number of projects have been postponed due to economic recession after losing 75% of the oil. Transit fees of south Sudan will likely cut the loss greatly and the government economic emergency plan will end in 2015 bringing the economy back on track and after that, the economy will start developing rapidly with construction booms.
Khartoum has one of the largest open markets or souqs, the Souq Al Arabi. The market is spread over several blocks in the center of Khartoum proper just south of the Great Mosque (Mesjid al-Kabir) and the minibus station. It is divided into separate sections, including one focused entirely on gold.Al Qasr Street and Al Jamhoriyah Street are considered the most famous high streets in Khartoum State. In 2010, Sudan's first medium scale shopping mall opened, located in the southern suburb Arkeweet. The Afra Mall has a supermarket, retail outlets, coffee shops, a bowling alley, movie theaters, and a children's playground. In 2011, Sudan opened the Hotel Section and part of the food court of the new, Cornithia hotel Tower. The Mall/Shopping section is still under construction.
Sudan has 4,725 kilometers of narrow-gauge, single-track railroads that serve the northern and central portions of the country. The main line runs from Wadi Halfa on the Egyptian border to Khartoum and southwest to Al Ubayyid via Sannar and Kusti, with extensions to Nyala in Southern Darfur and Wau in Bahr al Ghazal. Other lines connect Atbarah and Sannar with Port Sudan, and Sannar with Ad Damazin. A 1,400-kilometer line serves the al Gezira cotton-growing region. A modest effort to upgrade rail transport is currently underway to reverse decades of neglect and declining efficiency. Service on some lines may be interrupted during the rainy season.
Sudan is one of the largest Arab nations. It is rich in history dating back to the Ancient Egyptians and the Ancient Nubians. There are many pyramids all over Sudan, attracting many tourist from Syria, Egypt, Morocco, Jordan and other Arab countries. They also attract tourist from Western nations. Sudan was voted the 8th most popular Arab nation to visit by the Council of Arab Economic Unity. Sudan also has many modern hotels including the five star Corinthia Hotel Khartoum in Khartoum. The government of Sudan also pledge $1 billion a year to increase the Tourist Industry.
Agricultural products in total account for about 95 percent of the country's exports. In 1998 there was an estimated 16.9 million hectares (41.8 million acres) of arable land and approximately 1.9 million hectares (4.7 million acres) set aside for irrigation, primarily in the north of the country along the banks of the Nile and other rivers. Cash crops (as of 1999) grown under irrigation in these areas include cotton and cottonseed, which is of primary importance to the economy with 172,000 tons and 131,000 tons produced annually respectively,sesame (220,000 tons), sugarcane (5,950,000 tons), peanuts (980,000 tons), dates (176,000 tons), citrus fruits, yams (136,000 tons), tomatoes (240,000 tons), mangoes, coffee, and tobacco. The main subsistence crops produced in Sudan are sorghum (3,045,000 tons), millet (1,499,000 tons), wheat (168,000 tons), cowpeas, beans, pulses, corn (65,000), and barley. Cotton is the principal export crop and an integral part of the country's economy and Sudan is the world's third largest producer of sesame after India and China.
Sudan’s limited industrial development consists of agricultural processing and various light industries located in Khartoum North. In recent years, the Giad Industrial Complex in Al Jazirah state 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.
Sudan is seeking to expand its installed capacity of electrical generation of around 300MW;of which 180 MW is hydroelectric and the rest thermal. European investors, considering the continuing U.S. economic, trade, and financial sanctions regime, 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. A new dam which is being established in Merowe which has been opened in 2008 and generates 1250 MW of electricity.
Extensive petroleum exploration first began in Sudan in the mid-1970s. 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. Today, oil is an important export industry in Sudan. Estimates suggest that oil accounts for between 70% and 90% of Sudan's total exports. The primary importers of Sudanese oil are Japan, China, South Korea, Indonesia, and India.
Most of Sudan's oil reserves are located in the Muglad and Melut rift basins in the south of the country. Oil fields in the south, such as those at Heglig and in the South Sudanese state of Unity, formerly part of Sudanese territory, are linked to the country's refineries via pipelines. The two largest oil pipelines are the Greater Nile Oil Pipeline, which travels 1,600 kilometres from the Unity oil field to Port Sudan on the Red Sea via Khartoum, and the PetroDar pipeline, which extends 1,380 kilometres from the Palogue oil field in the Melut Basin to Port Sudan.
Crude oil from the Muglad Basin is known as "Nile Blend" and is refined at the Khartoum crude oil refinery. In 2006, the China National Petroleum Corporation upgraded the Khartoum refinery, doubling its capacity to 100,000 barrels per day (16,000 m3/d). Oil from the Melud Basin is known as "Dar Blend" and is refined at the Port Sudan Refinery, which has a capacity of 21,700 barrels per day (3,450 m3/d). In 2005, the Sudanese government contracted Petronas to build a new refinery at Port Sudan.
Sudan's crude oil output is predicted to peak in 2008, although current revenue levels may be sustained for a decade or more.
In September 2012, Sudanese President Omar al-Bashir opened the country’s first gold refinery and it is speculated to be one of the largest such constructions in Africa. The refinery will produce more than 328 tonnes of gold annually. Economic analysts say that the refinery is part of government’s strategy to make up for lost oil revenue after the South Sudan split of 2011.
The refinery will also be able to process silver and its opening should reduce the amount of gold and silver smuggled to other markets. According to Reuters, Sudan hopes to double its gold revenues this year to $3 billion. In August 2012, the finance ministry of Sudan said that the export of gold ore from Sudan would be prohibited once the refinery was opened.
Embargos and sanctions
On 3 November 1997, the U.S. government imposed a trade embargo against Sudan and a total asset freeze against the Government of Sudan under Executive Order 13067. The U.S. believed the Government of Sudan gave support to international terrorism, destabilized neighboring governments, and permitted human rights violations. A consequence of the embargo is that U.S. corporations cannot invest in the Sudan oil industry, so companies in China, Malaysia and India are the major investors.
Historically, the U.S., the Netherlands, Italy, Germany, Saudi Arabia, Kuwait, and other Organization of Petroleum Exporting Countries (OPEC) nations traditionally 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.
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- Sudan's al-Bashir opens large gold refinery in Khartoum, United Kingdom: BBC News, 2012, retrieved 25 September 2012
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