An official website of the United States Government Here's how you know

Official websites use .gov

A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS

A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Sudan

Executive Summary

Following the end of the 30-year regime of Omar Bashir in 2019, Sudan’s military and a coalition of civilian opposition groups agreed to a three-year power-sharing agreement under the Civilian-Led Transitional Government (CLTG) that was to culminate with a popularly elected government in 2022. The clock on that agreement was reset to 2024 with the integration of former armed opposition groups into the CLTG following the signing of the Juba Peace Agreement on October 3, 2020. The transition ended abruptly on October 25, 2021, when the country’s military, led by General Abdul Fattah al-Burhan, seized power and ousted the CLTG, including Prime Minister Abdalla Hamdok. The military takeover precipitated a political crisis that continues into 2022. Sudanese citizens, angered and frustrated by the military’s seizure of power, initiated a series of regular nationwide protests demanding a return to civilian rule. In January 2022, the United Nations Integrated Transition Assistance Mission in Sudan (UNITAMS) launched a mediation effort aimed at bringing together a broad range of civilian actors to begin negotiations on a political solution to restore Sudan’s democratic transition; the African Union and Intergovernmental Authority on Development later joined that effort.

During its two-year administration, the CLTG initiated a series of political, economic, and legal reforms. In cooperation with the International Monetary Fund (IMF), the government pursued a program that reduced or eliminated several costly subsidy programs, improved fiscal discipline and public financial management, adopted currency and tariff reforms, and launched a revision of its commercial laws. The international community, under U.S. government leadership, took actions to dramatically reduce Sudan’s outstanding $56 billion international debt by paying off debt arrears owed to International Financial Institutions and organizing debt relief among creditors nations. A popularly supported “Dismantling Committee,” in concert with the Ministry of Justice, was intended to root out corruption, identify and seize illegally obtained assets, and return much of the national wealth that was spirited out of the country by Bashir-era cronies.

The October 25 military takeover stalled most CLTG reform efforts and threatens to reverse the gains of the previous two years. Sudan’s current military leadership dismissed most of the civilian ministers, including the Prime Minister, appointing in their place “caretaker” ministers absent legal authority to do so. The international community has imposed significant costs on Sudan’s military regime for its actions. The United States has paused all non-humanitarian assistance to Sudan, and much assistance from bilateral donors and International Financial Institutions also remain paused. The United States government has been clear that the only path to restoring financial assistance is predicated on restoring Sudan’s democratic transition. The ongoing political turmoil has produced economic uncertainty, a depreciating national currency, price increases, and shortages of grain, fuel, medicine, and other imported commodities.

The sectors of greatest interest to foreign investors remain mineral extraction (primarily gold, non-precious metals, oil, and natural gas) and agriculture. Sudan’s infrastructure is in significant need of modernization and expansion. Many American companies have inquired about investment opportunities and visited Sudan with an expressed interest in direct investment and promotion of U.S. products. The Sudanese have expressed a robust interest in obtaining U.S. goods, services, technologies, and training/capacity building programs. However, a lack of domestic investment capital, poor infrastructure, burdensome bureaucracy, endemic corruption, and low household incomes create challenges for any company considering the Sudanese market.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 164 of 175 http://www.transparency.org/research/cpi/overview 
Global Innovation Index 2021 N/A https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in partner country ($M USD, historical stock positions) 2021 N/A https://apps.bea.gov/international/factsheet/ 
World Bank GNI per capita 2020 $650 https://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

7. State-Owned Enterprises

State-owned enterprises (SOEs) associated with the military and security services play an unusually large role in the Sudanese economy and are currently involved in a range of commercial activities, including fuel storage, natural gas projects, solar panel manufacturing, infrastructure, the railroad sector, cotton and textiles, and food industries, including flour milling, bread production, and animal husbandry. Approximately 220 out of approximately 650 SOEs cataloged by the CLTG are associated with Sudan’s military and security services. Reportedly, many of these SOEs are inefficient and poorly managed; however, reforming and transferring them to civilian control has been politically sensitive. Although the CLTG made SOE reform a centerpiece of its broader economic and governance reform program, this agenda has stalled because of the military takeover.

As part of the IMF’s Extended Credit Facility (ECF) program, Sudanese authorities committed to take the following actions by June 2022: (1) endorse an ownership strategy that sets forth the oversight and management framework for SOEs and guiding principles for a review of the existing stock of SOEs; (2) publish end-2021 financial statements and audit reports for ten priority SOEs and creating a calendar for annual publication of these reports thereafter; and (3) publish a complete list of SOEs, including those in the intelligence sector. SOE audits from previous years exist but authorities have not yet made them public. The U.S. government, in concert with the IMF, continues to press the Sudanese authorities to accelerate their review of SOE operations and publish the aforementioned documents as steps toward greater transparency and adherence to its IMF program. However, military authorities have resisted these reform efforts.

8. Responsible Business Conduct

Sudan’s Investment Law (National Investment Encouragement Act, 1999, Amended (2013 and 2021)) sets the standards for business conduct and obligations. The law and its executive rules are applied to both Sudanese and foreign investors. The investment authority maintains oversight for “responsible business conduct” and provides information on regulations, services, and the various departments to which the investor could contact on its website:  http://www.sudaninvest.org/English/About-Ministry.htm . The investment authority also developed a “one-stop-shop” for information on land, customs, taxes, commercial registration, and agriculture among others. The law under its Chapter 6 “Privileges and Guarantees” and Chapter 8 “General Rules” commits the government to “non-nationalization or non-confiscation of projects.” Sudan’s Investment Council and Specialized Court create the regulations and are the bodies which settle overlapping issues. Sudan makes available an ombudsman at its Public Grievance Chamber ( www.ombudsman.gov.sd ). The Sudanese Constitution (1998) first established the General Ombudsman body. In 2011, Chapter V, Article 147 (1) of the Constitution (2011) established the Public Grievances Chamber. The Ombudsman’s office explains its complaint process and other information online. Corruption in the supply chain for commodities and minerals within the major cities and in the conflict-affected areas remains a concern.

Sudan falls short of consistently strong supply chain due diligence. For example, while the government takes positive steps through its Ministry of Animal Resources ( http://mar.gov.sd/en/index.php/departments/view_dept/2 ) to outline regulations for implementation of livestock and fisheries administration, it does not, through its Ministry of Energy and Mining, prohibit the harmful use of cyanide or other dangerous chemicals in gold mining operations. In fact, the government and private companies use cyanide in gold extraction. Sudan is not an adherent to the OECD’s Guidelines for Multinational Enterprises on Responsible Business Conduct International, does not participate in the Extractive Industries Transparency Index (EITI) nor participates in the Voluntary Principles on Security and Human Rights.

9. Corruption

Corruption is widespread in Sudan. The law provides criminal penalties for corruption by officials; nevertheless, government corruption at all levels is widespread. The Bashir regime made a few efforts to enforce legislation aimed at preventing and prosecuting corruption.  The law provides the legislative framework for addressing official corruption, but implementation under the Bashir regime was weak, and punishments were lenient. Officials found guilty of corrupt acts could often avoid jail time if they returned ill-gotten funds. Under the Bashir regime, journalists who reported on government corruption were sometimes intimidated, detained, and interrogated by security services.

A special anticorruption attorney investigated and prosecuted corruption cases involving officials, their spouses, and their children. Punishments for embezzlement include imprisonment or execution for public service workers, although these were almost never carried out. Under the Bashir regime, media reporting on corruption was considered a “red line” set by the National Intelligence and Security Services and a topic that authorities, for the most part, prohibited newspapers from covering. While reporting on corruption was no longer a red line under the CLTG, media continued to practice self-censorship on issues related to corruption.  In August 2019, Omar Bashir was formally indicted on charges of corruption and illegal possession of foreign currency. Bashir’s trial began in August 2019; in December 2019, he was convicted and sentenced to two years’ imprisonment on these charges. Bashir remains imprisoned as further charges are pending.

Financial Disclosure: Under the Bashir regime, the law required high-ranking officials to publicly disclose income and assets. There were no clear sanctions for noncompliance, although the former Anti-Corruption Commission possessed discretionary powers to punish violators. The Financial Disclosure and Inspection Committee and the Unlawful and Suspicious Enrichment Administration at the Ministry of Justice both monitored compliance. Despite three different bodies ostensibly charged with monitoring financial disclosure regulations, there was no effective enforcement or prosecution of offenders.

The 2019 Constitutional Declaration includes financial disclosure and prohibition of commercial activity provisions for members of the Sovereign Council and Council of Ministers, state and regional governors, and members of the Transitional Legislative Council. It also mandates the creation of an anti-corruption commission (not established) and an Empowerment Elimination, Anti-Corruption, and Funds Recovery Committee (informally called the Dismantling Committee). However, following the October 2021 military takeover, the commission was abolished, many of its members imprisoned on corruption charges, and many government employees dismissed at the Commission’s direction were re-instated in their positions. Sudan ranked 164 out of 180 countries on Transparency International ‘s 2021  Corruption Perceptions Index .

https://www.transparency.org/en/cpi/2021 

10. Political and Security Environment

Sudan’s political and security environment is volatile. Neighborhood Resistance Committees, political parties, and other groups opposing the October 25, 2021, military takeover regularly stage large protests aimed at forcing the military leadership to relinquish control and return Sudan to its democratic transition. These protests have become violent, with 102 protesters killed as of June 2022 and over 2,000 injured by police and security forces since October 2021. On March 21, 2022, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Sudan’s Central Reserve Police for the use of excessive force against peaceful protestors.

On May 23, 2022 the U.S. Department of State, the U.S. Department of the Treasury, the U.S. Department of Commerce, and the U.S. Department of Labor issued a business advisory to highlight growing risks to American businesses and individuals associated with conducting business with Sudanese State-Owned Enterprises (SOE) which includes all companies under military control (hereafter collectively referred to as “SOEs and military-controlled companies”). These risks arise from recent actions undertaken by Sudan’s Sovereign Council and security forces under the military’s control and could adversely impact U.S. businesses, individuals, other persons, and their operations in the country and the region.

U.S. businesses, individuals, and other persons, including academic institutions, research service providers, and investors (hereafter “businesses and individuals”) that operate in Sudan should be aware of the role of SOEs and military-controlled companies in its economy. Though Sudan’s military has long controlled a network of entities, following its seizure of power on October 25, 2021, it is in effective control of all SOEs. Further, Sudan’s military is increasing its direct control of Sudan’s many SOEs and plans for civilian control over SOEs has been abandoned. Businesses and individuals operating in Sudan and the region should undertake increased due diligence related to human rights issues and be aware of the potential reputational risks of conducting business activities and/or transactions with SOEs and military-controlled companies. U.S. businesses and individuals should also take care to avoid interaction with any persons listed on the Department of the Treasury’s Office of Foreign Assets Controls’(OFAC) list of Specially Designated Nationals  and Blocked Persons (SDN List).

The business advisory relates specifically to SOEs and military-controlled companies. The U.S. government does not seek to curtail or discourage responsible investment or business activities in Sudan with civilian-owned Sudanese counterparts.

The full business advisory here:  https://www.state.gov/risks-and-considerations-for-u-s-businesses-operating-in-sudan/.

11. Labor Policies and Practices

Sudan suffers from high unemployment, unofficially estimated at 40%. The Sudanese educational system produces many skilled and talented workers, but an absence of career options prompts many to emigrate in search of better opportunities. U.S. business contacts have praised the professionalism of their Sudanese counterparts. Sudan is also experiencing a demographic “bulge” that has resulted in a disproportionate number of potential workers under 25 years of age. There is a large, informal market of small entrepreneurs. The country’s borders are porous, producing a large pool of unskilled labor market, with many workers from Ethiopia, South Sudan, and Syria.

In November 2019, the CLTG dissolved all trade unions and associations as part of its effort to dismantle the remnants of the Bashir regime. The CLTG encouraged the formation of new trade unions. In 2021, the Ministry of Labor and Administrative Reform, with technical input from the International Labor Organization (ILO), finalized the drafting of a Trade Union Law.  The draft law was not, however, passed prior to the military takeover.

14. Contact for More Information

Justine King
Economic Officer
U.S. Embassy Khartoum
+249-(0)18-702-2000 ext.2035
KingJA3@state.gov

Investment Climate Statements
Edit Your Custom Report

01 / Select A Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future