After many months of popular protests, the 30-year regime of Omar Bashir came to an end in April 2019. A civilian-led transitional government (CLTG) took power in September 2019, with a mandate to establish political institutions and hold elections within 39 months. Severe economic problems, namely rising bread and fuel prices, drove the 2018-19 protests. These problems persist, partially due to infrastructure and transport deficiencies but also due to decades of mismanagement, corruption, and economic practices of the former regime.
Although the lifting of the comprehensive U.S. economic sanctions regime in late 2017 allowed international banks to offer services that were restricted for years due to the embargo, financial institutions have maintained a guarded approach in engaging with Sudan. Sudan’s designation as a state sponsor of terrorism (SST) is one reason financial institutions do not provide services even though the United States no longer prohibits private companies from doing business in Sudan. This has hampered the ability to conduct international money transfers and payments through banking institutions. Consequently, banking, financial, and transaction services are often expensive and time consuming for the public and private sectors due to a need to find alternative means to make payments. The parallel market is a significant economic factor as the disparity between the parallel exchange rate (130 SDG:1 USD) and the official exchange rate (55:1) remains despite Ministry of Finance and Central Bank of Sudan efforts to unify the two rates. Efforts to remove fuel subsidies, which would free up close to 150 billion Sudanese pounds (USD 2.8 billion), were delayed because of a lack of support from the Forces for Freedom and Change (FFC), a major political coalition. However, the CLTG has already taken measures by opening up gas stations that sell at the commercial rate.
Before the novel coronavirus pandemic (COVID-19) considerably slowed economic and commercial activity globally, American companies inquired and visited Sudan with a view to foreign direct investment and promotion of U.S. products. There has been robust demand for U.S. goods, services, technology, and training/capacity programs, particularly in the fields of agriculture, energy, and medicine.
Some foreign companies, particularly those involved in port operations and logistics, informed the Embassy that the CLTG has been slow to repay contracts that were cancelled prior to its establishment. One company fronted USD 400 million for a deal that was later cancelled by interim military authorities in 2019. The government still has an outstanding balance of USD 200 million, although it has repeatedly expressed its intention to repay the balance. The former Ministry of Investment has been placed under the authority of the Ministry of Finance and Economic Planning. This move aims to harmonize coordination and consolidate economic policy in response to criticisms of the lack of communication between the two entities, as well as contradictory policies.
Sudan has continued to be an attractive market for U.S.-manufactured agricultural machinery such as tractors and pivot irrigation systems, and for seeds. Sudan’s major dairies began purchasing thousands of American-breed dairy cattle in the past few years. Medicine and medical equipment as well as a variety of academic services remain in high demand; however, activities in these areas are minimal due to the difficulty in executing financial transactions with Sudan. Historical challenges in obtaining medicines and medical equipment became clear during the COVID-19 pandemic. Banking and financial services companies have increasingly began taking interest in Sudan. Oracle and Visa recently executed deals allowing local banks to access their banking technologies and payment systems. Lack of transparency and corruption remain reasons American and Sudanese businesses alike should use caution when pursuing permissible commercial activity.
|TI Corruption Perceptions Index||2020||173 of 180||https://www.transparency.org/cpi2019|
|World Bank’s Doing Business Report||2019||171 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2019||N/A||https://www.globalinnovationindex.org/
|U.S. FDI in partner country ($M USD, historical stock positions)||2018||USD 0||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2018||USD 1,560||https://data.worldbank.org/