Economy of Sudan

The Sudan is one of the poorest and least developed countries in the world, with most of its inhabitants dependent on farming and animal husbandry for their livelihoods. Though its role in the economy has declined in the decades since independence, agriculture still accounts for one-third of The Sudan's gross domestic product (GDP) and more than nine-tenths of its exports, while providing the livelihood of two-thirds of the population.
The economy has steadily declined since the late 1970s, when the failure of an ambitious development program left the country with both stagnating agricultural production and a large foreign debt.

Civil war in south, massive influx of refugees from neighboring countries, and drought in 1980s and 1991 have hampered economic development. New economic recovery program announced June 1990 to end economic stagnation, develop agriculture, liberalize trade, abolish most government monopolies, progressively eliminate budget deficit, and develop energy resources.

Agriculture and livestock raising provided livelihood for about 80 percent of population and roughly 95 percent of exports in early 1990s. Agriculture characterized by modern market-oriented sector of irrigated and mechanized rainfed farming concentrated in central part of country and large traditional sector engaged in subsistence activities elsewhere.

Principal modern sector crops: cotton, sorghum, groundnuts, sugarcane, wheat, sesame. Traditional sector crops: sorghum, millet, sesame, groundnuts. Fisheries still largely subsistence occupation. Apart from gum arabic, a major export, forests used mainly for fuel.

Public enterprises dominant in modern manufacturing activity, mainly foodstuffs, beverages, textiles. Output of government plants generally well below capacities because of raw materials shortages, power outages, lack of spare parts, and lack of competent managerial staff and skilled laborers. Three-quarters of large-scale modern manufacturing in Al Khartum State.

Mining contributed less than 1 percent to gross domestic product (GDP) in 1990. Most petroleum exploration operations ended in 1984 because of civil war in south and had not resumed as of mid-1991.

The country’s transportation facilities 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.

Extensive petroleum exploration began in the mid-1970s and might cover all of Sudan’s economic and energy 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.

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.

However, as Sudan became the world’s largest debtor to the World Bank and IMF 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.

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.

Economic summary

GDP/PPP (2005 est.): $84.93 billion; per capita $2,100. Real growth rate: 7.7%. Inflation: 11%. Unemployment: 18.7% (2002 est.).

Arable land: 7%.

Agriculture: cotton, groundnuts (peanuts), sorghum, millet, wheat, gum arabic, sugarcane, cassava (tapioca), mangos, papaya, bananas, sweet potatoes, sesame; sheep, livestock.

Labor force: 11 million (1996 est.); agriculture 80%, industry and commerce 7%, government 13% (1998 est.).

Industries: oil, cotton ginning, textiles, cement, edible oils, sugar, soap distilling, shoes, petroleum refining, pharmaceuticals, armaments, automobile/light truck assembly.

Natural resources: petroleum; small reserves of iron ore, copper, chromium ore, zinc, tungsten, mica, silver, gold, hydropower.

Exports: $6.989 billion f.o.b. (2005 est.): oil and petroleum products; cotton, sesame, livestock, groundnuts, gum arabic, sugar.

Imports: $5.028 billion f.o.b. (2005 est.): foodstuffs, manufactured goods, refinery and transport equipment, medicines and chemicals, textiles, wheat.

Major trading partners: China, Japan, Saudi Arabia, UAE, Egypt, India, Germany, Australia (2004).

Main destinations of exports in 1986: Saudi Arabia, Japan, Britain, other European Community (EC) members.

Main suppliers: Saudi Arabia (petroleum), Britain, other EC members, United States, Japan, China.

Last Updated on Monday 4th August 2008