World Economy

Revival Beckons for Sudan as US Lifts Sanctions

Sudan has vast areas of cultivable agricultural land.Sudan has vast areas of cultivable agricultural land.

The US removal of sanctions on Sudan may unlock the potential for the government to tap its rich mineral and agriculture resources. Now the African state needs to carry out the large-scale reforms required to attract investors.

Former president Barack Obama’s Jan. 13 executive order reversed some measures put in place by the US in 1997, four years after it first listed Sudan as a state sponsor of terrorism. It lifted restrictions on petroleum and petrochemical industries, including oilfield services and oil- and gas-pipeline transactions by Americans, and also allowed US citizens to process deals involving people in Sudan, and import and export goods, Bloomberg reported.

Two weeks later, Sudan was among the seven mainly Muslim Middle East and East African nations whose citizens were barred from entering the US by President Donald Trump. Sudan’s Foreign Ministry said it was “particularly unfortunate” that the decision coincided with the removal of sanctions and “just as economic and financial institutions as well as businessmen in the country were set to continue developing their investment projects.”

Attracting investors, analysts say, needs changes in everything from business regulations to education, as well as investment in roads, rail and ports.

“The lifting of the sanctions is a good thing, but it should not lead us to the mistaken conclusion that now Sudan is going to become a miracle and register 6, 7 or 8% growth,” Harry Verhoeven, a professor of government at Georgetown University in Qatar, said Jan. 24 by e-mail. “Unless you have comprehensive fundamental reforms, both political and economic, this country will not live up to its potential.”

Sudan has about 1.5 billion barrels of proven oil reserves, according to BP Plc statistics, even after losing three-quarters of its crude when South Sudan seceded in 2011. Gold output was on target for 75 metric tons last year, the government said.

Despite “low levels of crops, livestock, fisheries and forestry production,” Sudan has “vast areas of cultivable agricultural land” and enough water for the industry’s needs, according to the United Nations Food and Agriculture Organization.

Inflation reached 30.5% in December, its highest rate since late 2014. Sudan’s currency gained as much as 28% on the streets of the capital, Khartoum, in the days after the US Treasury’s announcement, trading at between 14 and 17 per US dollar, compared with about 19.4 before. The pound’s official rate is about 6.666 per dollar, according to the Central Bank of Sudan’s website.

 Sanctions’ Impact

Sudan’s economy has been able to weather the sanctions’ impact because it began exporting oil in 1999. That’s helped gross domestic product grow eight-fold to more than $97 billion, according to World Bank data. Its forecast by the African Development Bank to expand 6% this year, compared with 6.2% in 2016 statistics show.

The sanctions were predominantly hurting ordinary people, students, patients and doctors and in agriculture, and were not hurting the very powerful families that have been dominating this country since 1989,” said Verhoeven, referring to when Umar al-Bashir took power in a military coup.

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