Sudan: A new promising era at all levels

Towards a new era of revival

Lifting American sanctions on Sudan in the next few months after 20 years of suffering is expected to have positive effects on the Sudanese economy, through boosting foreign investments so they could provide foreign currency, particularly in the financial and agricultural sectors as well as in health and education areas. Transport and communications projects and other vital sectors are being revived.

Sudan is planning to attract $US 10 to 15 million worth of foreign investments by the end of 2017, by focusing on providing various incentives in the sectors of agriculture, livestock production, mining and services. It is also expected that all necessary amendments to the national investment law will be finalized during the third quarter of the same year. This would allow to deal with the hurdles encountered in the implementation of the investment law of 2003, and will grant more privileges and incentives to foreign investors.

 

Investment fundamentals

Sudan is endowed with many assets, resources and promising opportunities, increasingly important today, including oil and gas, precious metals like gold and silver as well as iron, zinc, chrome and many others. Its main wealth remains however the abundant surface water, rain water and agricultural lands. Indeed, no other country can be compared to Sudan in terms of the surface area of its arable land, the diversity of its climate, soil and water. Sudan also enjoys considerable agricultural assets with 175 million acres of arable land, and 52 million acres of forests in addition to its livestock and fertile pastures.

Hundreds of projects are also offered for investments in Sudan in many sectors, like transport, infrastructure, livestock, minerals and industry, particularly pharmaceuticals.

 

Evolution of investment projects according to the top 10 sectors between 2012- 2016 (US$m)

 

Source: Fdi markets

Major countries investing in Sudan, 2012-2016

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Areas for development

The following table shows the ranking of Sudan in the ease of doing business index for 2017 among 190 countries, which clearly reflects the need for improvement in various areas related to investment.

 

Sudan’s ranking in the World Bank indicators for ease of doing business for 2017 among 190 countries

 

Source: World Bank Doing Business 2017

 

Sudan has also to strive to exploit its potential in order to achieve a comprehensive and diversified resources development, to remove all hindrances facing the upgrading of the overall economic performance by reducing the inflation rate, liberalizing the exchange rate, enhancing productivity and strengthening the human capital through education and professional development.

Moreover, providing an investment friendly environment would require further development in economic, financial and banking legislations, achieving fiscal stability in addition to providing modern and up to date services. It is also necessary to take a specific interest in the basic infrastructure of electricity, IT & communication, transport and other important services. Problems and actual obstacles encountered by Arab and foreign investors in Sudan need to be looked into and radically dealt with. Indeed, this would improve to a large extent the investment profile in Sudan, especially that these problems are neutralizing the advantages granted by the investment law and preventing their full activation. Among the major obstacles:

-     Non availability of equipment spare parts, fertilizers and pesticides and thus it is very important to facilitate the import of such products and to promote the local manufacturing thereof.

-     Heavy charges and taxes imposed on equipment and machinery, especially in the agriculture sector, and thus it is very important to review radically this issue.

-     A definitive and legal settlement of the various land ownership related problems emerging from the objection of the provinces to decisions taken by the government as to grant investors agricultural lands.

-     Different decision making authorities from one province to another and even within the same province, which leads to conflicts of interest between the governors and the legislative councils for each province. It is thus important to reach an internal agreement on the powers in order to create on single reference.

-     Weakness of the infrastructure and the main public services, as well as the absence of modern transport means from the production sites to the marketing, exportation and ports locations. This area requires major investments, from the State or by promoting partnerships with the local, Arab and international private sector.

-     Non justified tax collections imposed by the provinces and local councils on products being transported to the port, and thus it is important to remove such collections.

-     Lack of conciliation and arbitration mechanisms for foreign investors.

-     Removal of restrictions on investments and striving to ensure a stable legislative framework.