Following intense bilateral engagement, the United States lifted most economic sanctions on Sudan in October 2017 except for those on selected persons or entities. While Sudan has the potential to improve its investment environment and attract increased foreign direct investment, the endemic corruption, problems in infrastructure development – including air transportation – internal conflicts, and economic fragility continue to undermine commercial activity. The lack of foreign investment contributes to Sudan’s high unemployment rate that it reported at 13.3 percent in 2017 (note: experts say the actual rate was closer to 19.5 and projected to rise to 20.65 percent of the total labor force by the end of 2017.) In 2016, unemployment among youth was reported at 34 percent and 48 percent among university graduates. Sudan has a number of policies that could encourage investment, yet corruption and the lack of transparency could cause difficulties for the investor. The National Document stating the outcomes of the 2016 National Dialogue showed forward thinking by declaring plans for “adoption of a national strategy for economic planning and development in a way that realizes the targets of sustainable development…”
While lifting sanctions allowed international banks to offer services that for years were restricted due to the embargo, financial institutions have maintained a guarded approach of engaging with Sudan. Although the United States no longer prohibits doing business in Sudan, the country’s placement on the State Sponsors of Terrorism List is thought to be the reason financial institutions are not providing services. As such, banking, financial exchanges, and transacting business services are expensive for the public and private sectors who must find alternate ways to make payments. The Government devalued the Sudanese pound (SDG) since November 2017 as an incentive to attract foreign exchange via remittances from Sudanese abroad and to bring the official rate closer to the ever-expanding parallel rate of exchange. In a subsequent economic shock, the Government of Sudan (GoS) eliminated some subsidies such as wheat, doubling the price of bread and raising the price of other consumer goods. Medicines increased by 50 to 300 percent, electricity increased 113 percent; cooking gas increased 113 percent from (SDG 75 to SDG 160), and cooking oil increased by 62 percent.
American companies have begun inquiries and visits to Sudan with a view to foreign direct investment, and U.S. commercial activity with Sudanese entities are expected to increase in the short term. As part of lifting of sanctions, the Department of Treasury abolished the requirement for general licenses that had earlier been required for any U.S. exports except for: agricultural inputs — equipment, livestock, food, medicine, and medical equipment; certain educational activities and exchanges; and, certain information and communications technology products and services, which were not prohibited. As U.S. companies were already engaged in these permitted areas, it is expected that these types of businesses would have an advantage to the lucrative opportunities that exist in the post sanctions era. There has been robust demand for U.S. goods, services, technology, and training/capacity programs, particularly in the fields of agriculture and transportation (especially airlines and railways), and requests for assistance in providing educational testing services for Sudanese interested in joining the U.S. education system.
Some businesses emphasized the challenges they face in distributing their products throughout the country, due to dilapidated transportation infrastructure, including the railways, and most recently the shortage of fuel. The GoS has embarked on a multi-year railway revitalization plan to add wide gauge tracks, new high speed trains, and by adding new routes. Interest has been expressed for U.S. goods, services and technology in oil exploration and drilling, and for port infrastructure projects. Sea Ports Corporation (SPC) officials have indicated that Port Sudan, which handles 90 percent of the nation’s foreign trade, witnessed a seven-to-eight percent increase in shipping traffic between January 2016 and January 2017. The increase in shipping was reportedly due to the lifting of sanctions. In order to accommodate the increased number of ships, SPC is in the process of rehabilitating several of the area’s ports and constructing new ones, including Shaykh Ibrahim Livestock Port which is expected to open in May 2018. Shaykh Ibrahim Port is partly owned by the Chinese and has since changed the name to the Haido Port. Nonetheless, some businesses have complained about customs clearance delays and high demurrage fees imposed on imports detained at the ports. The consensus among Sudanese is that they prefer the good quality American products to less-expensive Chinese goods.
Sudan has emerged as 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. Over the past months, there have been announcements in the media of major deals, land leases, and initiatives that promised to improve exports and to grow the agro-industries as the ticket to overcoming the country’s economic woes; but with few public details about the agreements. This lack of transparency and continuing corruption are reasons American and Sudanese businesses alike should use caution when pursuing permissible commercial activity.
|TI Corruption Perceptions Index||2017||175 of 180||http://www.transparency.org/
|World Bank’s Doing Business Report “Ease of Doing Business”||2017||170 of 190||http://www.doing
|Global Innovation Index||2017||N/A of 128||https://www.globalinnovation
|U.S. FDI in Partner Country (M USD, stock positions)||2017||USD 0||http://www.bea.gov/
|World Bank GNI per capita||2016||USD 4,290||http://data.worldbank.org/
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The easing of U.S. sanctions also included lifting section 908(a)(1) of the Trade Sanctions Reform Act (TSRA) (22 U.S.C. 7297(a)(1)) that included export assistance restrictions limiting U.S. Embassy Khartoum’s ability to provide the kind of support that the Mission and the Foreign Commercial Service typically provided, including: business matchmaking services, market research on specific products or services, export advocacy, and provision of information concerning business opportunities. See, e.g., 15 U.S.C. 4721. American investors interested in understanding more about the lifting of U.S. sanctions on Sudan are encouraged to visit the U.S Department of the Treasury’s website: https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20170113.aspx
Sudan has been more vigorous in promoting foreign direct investment since the lifting of sanctions holding a number of well-attended conferences on banking, agriculture, and mining. Sudanese officials promised to make significant investment reforms but its corporate tax rate is at an historical high of 35 percent. Other plans discussed were: lowering the corporate tax rate and capital gains tax, and improving the timeliness of customs clearances, although challenges remain with associated costs. The GoS places the tax burden primarily on large businesses that pay much higher than their official tax rate, which averages 10-15 percent of profit. In World Bank’s Doing Business Report 2017, Sudan had the lowest ranking in the region in the area of Protecting Minority Investors.
Trade missions, mainly from Saudi Arabia, China, Qatar, Kuwait, and the United Arab Emirates, visit Khartoum on a regular basis, often accompanied by public announcements of signed agreements and purported deals. Most foreign investment to date is related to natural resources, particularly in petroleum and gas exploration and extraction, and agriculture. The Gulf nations are becoming more involved with infrastructure and real estate projects. China, Malaysia, Brazil, and India have made major investments in the oil sector, and Arab Gulf states, Brazil, and Egypt invested mainly in Sudan’s agricultural sector primarily in animal fodder. Gulf states have reportedly acquired large areas of agricultural land to grow feed for livestock. Sudan gave Saudi Arabia permission to use one million acres to cultivate agriculture in Northeastern Sudan in July 2016. GoS signed a MOU with Chinese companies in August 2016 that allowed the companies to grow cotton on one million feddan (420,000 acres) of agricultural land (1 feddan = 0.42 acres.).
The Ministry of Investment is the authority on doing business in Sudan. There is also an umbrella federation of all Sudanese businesses. In January 2013, the Economic Development Sector of the Council of Ministers passed the National Investment Encouragement Act of 2013, later adopted by the National Assembly. This act ensures that foreign investors enjoy the same protections as Sudanese nationals. Foreign investors, however, do complain that they are often asked for bribes to establish businesses or undertake economic projects in Sudan. There is often a difference between treatment provided by law and treatment received in practice. Investors face noteworthy corrupt activity in their encounters with midlevel government bureaucrats for the provision of administrative services such as issuing licenses, certificates, and documents.
Challenges for American investors and export-import firms to conduct business in Sudan persist, including high taxes, and opaque contract award processes, which discourage foreign direct investment.
U.S. businesses should be aware that at present, investors could face difficulties in transferring money to Sudan as international financial institutions (IFIs) continue to exercise caution in processing transactions. Their caution could be related to Sudan remaining on the State Sponsors of Terrorism List or because IFIs are taking time to complete due diligence or considering the practicality of absorbing the high costs of assessing the Sudan market, taking into account Sudan’s long absence from international banking. Those who decide to pursue permissible commercial activity should be advised that U.S. banking institutions are independent entities and the U.S. government or Embassy does not influence their business decisions.
Sudan is becoming a large market for a variety of U.S. agricultural harvesting equipment and inputs. Sudanese farmers represent a significant source of demand for new seeds adaptable to Sudan’s hot and dry climate. Currently, about 16.8 million hectares are under cultivation in Sudan; however, 84 million hectares are suitable for agriculture. Rain-fed traditional farming practices continue to dominate, but large-scale mechanized farming is growing, especially along the Nile and its tributaries. There is a robust market for American-manufactured pivot irrigation systems, water pumps, and well-drilling equipment. Sudan’s major dairies began buying thousands of American-breed dairy cattle in the past three years. As mining concessions have increased, inquiries about American mining equipment have become more prevalent.
Sudan has a formal private sector, led by several business associations, one of which is working with the U.S. Chamber of Commerce. These business groups are dominated by a number of large, often family-owned industrial, agricultural, and consumer products conglomerates. Currently, there is no established Sudan-American Chamber of Commerce. Many Sudanese corporate leaders studied in the United States and Europe and are fluent in English.
Sudan presents one of the most challenging business environments in the world to the would-be investor. Sudan lowered its ranking from 168 (2016) to 170 out of 190 countries on the 2017 World Bank-International Financial Corporation’s “Doing Business Report – Ease of Doing Business.” It is ranked 175 of 180 countries on Transparency International’s 2017 Corruptions Perception Index, tied in ranking with Libya. On the 2015 UN Human Development Index (HDI), Sudan is ranked 165 out of 188 countries. An estimated 47 percent of Sudan’s population (40,234,882) live on USD 1.90 per day, according to the HDI.
Political risk is also of concern. In addition to regional instability with countries bordering Sudan, the central government is involved in two internal conflicts: in Darfur and in the “Two Areas” of South Kordofan and Blue Nile States. Sudan and South Sudan have yet to demarcate their common border and continue to dispute the sovereignty of the territory of Abyei. Armed UN peacekeeping missions (UNAMID and UNISFA) are located in Darfur and Abyei.
International air service to Khartoum is limited. Egypt Air, Ethiopia Airlines, Flynas, Kenyan Airways, Saudia Airlines, Turkish Airways, Bahrain’s Gulf Airways, and several Emirati-based carriers (Etihad, Emirates, Fly Dubai, and Air Arabia) are among the major carriers that serve Khartoum; no American carrier currently flies to Sudan. Two private domestic airlines service Port Sudan, other regional Sudanese cities, and Juba, South Sudan. International airlines have decreased the number of weekly flights traveling to Khartoum because of the difficulties they face repatriating money.
In response to the loss of oil production and revenue following the secession of South Sudan in 2011, the Sudanese government is attempting to recover revenues by expanding existing oil and gas production, increasing mining operations (particularly gold mining), and expanding the agricultural and livestock sectors that had been the mainstay of the Sudanese economy prior to the advent of crude oil exports in 2000. Current oil production is estimated at between 85,000 and 100,000 barrels per day (bpd). Under the FY 2017 budget, the Government of Sudan projected an increase production to 115,000 bpd. Challenges the oil industry face include lack of security/conflicts near the oil fields, antiquated drilling equipment and oil wells, and lack of access to the latest technology.
According to the Public Authority of Geological Researches (TAGR), Sudan’s confirmed gold reserves amount to 533 tons, and only 20 percent of Sudan’s land is being exploited for gold. The TAGR reports that 47 tons of gold, two million tons of zinc, 500,000 tons of copper, 3,000 tons of manganese and 3000 tons of silver are in the Red Sea between Sudan and Saudi Arabia. In December the Geological Research Authority of Sudan said that the country reached 105 tons.
In 2017, gum Arabic exports are predicted to be 150,000 tons with proceeds of USD 200 million, according to Central Bank of Sudan (CBOS.) Sorghum production in 2016 was reportedly 130 percent more than in 2015, millet production was 64 percent more than in 2015, and 2016 wheat production was reported as two percent more than in 2015. UAE-associated investment company, Jenaan, established an agricultural project in Northern State that it hopes would begin yielding 240,000 heads of cattle for export in 2018. Sudan has 104 million herds of livestock, according to Ministry of Industry.
Limits on Foreign Control and Right to Private Ownership and Establishment
Despite the legal protections guaranteed under the National Investment Encouragement Act of 2013, there are foreign investment restrictions in the transportation sector, specifically in railway, freight transportation, inland waterways barge service, and airport operations. Most telecommunications and media, including television broadcasting and newspaper publishing, are closed to foreign capital participation. Foreign ownership is also restricted in the electrical power generation and financial services sectors. In addition to those overt statutory ownership restrictions, a comparatively large number of sectors are dominated by government monopolies, including, but not limited to, those mentioned above. Such monopolies, together with a high perceived difficulty of obtaining required operating licenses, make it more difficult for foreign companies to invest.
The GoS regularly promotes trade with South Sudan and highlights its location and natural resources to attract foreign direct investment. The annual International Trade Fair held in Khartoum is widely attended by the local population with a growing number of international businesses in attendance.
Other Investment Policy Reviews
In the past three years, Government of Sudan was reviewed annually by the World Bank and IMF on its overall economic picture. See: The World Bank in Sudan: http://www.worldbank.org/en/country/sudan/overview . Sudan has not undergone third-party investment policy reviews through OECD, WTO, or UNCTAD. Sudan aspires to WTO accession but has not, so far, met the requirements to join. The IMF held its Article IV visit to Sudan September 13–September 26 2017 to look at the previous year’s economic conditions. The IMF concluded that while Sudan had made some improvements, there was much to be done stating, “… unsustainable fiscal deficits persist, inflation is high, and economic growth remains below potential.” https://www.imf.org/en/News/Articles/2017/09/27/pr17373-imf-staff-completes-2017-article-iv-visit-to-sudan . The World Bank and IMF have offered Sudan technical assistance to address its monetary problems. The World Bank on February 2017 commenced a public private partnership with Sudan aimed at “strengthening Sudan’s investment climate and agribusiness.” http://www.worldbank.org/en/news/press-release/2017/02/02/world-bank-group-and-government-of-sudan-launch-public-private-partnership-support-program-for-sudan .
Facing a severe foreign exchange reserves shortage, the Sudanese government tightened conversion and transfer policies. Domestic businesses have no assurance of obtaining needed levels of foreign currency for international transactions. The government strictly controls incoming hard currency from exports and business owners wishing to retrieve cash can only make withdrawals denominated in Sudanese pounds at the time of this report. Foreign companies operating in Sudan must have the Central Bank of Sudan’s permission to repatriate profits and foreign currency. The Investment Act of 2013 enshrines the right to repatriate capital and profits, provided the investor has opened an investment account at the Central Bank of Sudan before entering into business. To avoid banking delays, many Sudanese firms complete a significant amount of transactions outside of official channels or complete transactions abroad in U.S. Dollars, Euros, Riyals, or Dirhams. Whether or not the government will revise its practices to ensure a steady stream of foreign exchange once international correspondent banking resumes, remains to be seen. The Act also established courts to handle investment issues and disputes.
The gap between the black market and official exchange rates has decreased since the government lowered the buying rate to SDG 29: 1 USD. The parallel/black market rates fluctuate — around 33 SDG: 1USD. Nonetheless, this divergence adds to the difficulty and complexity of settling accounts and repatriating profits and foreign exchange. While Sudanese and foreigners are permitted to hold foreign currency accounts in private commercial banks, access to the currency can be delayed and/or limited without prior notification. Individuals and businesses often resort to obtaining hard currency on the black market. Local businesses may avoid holding significant cash in domestic deposit accounts altogether. Sudanese authorities periodically crack down on dealers involved in unlicensed foreign exchange transactions. In 2014, in order to encourage the development of productive export industries, the Sudanese government prohibited banks from lending to real estate development and financing automobile loans.
The GoS has introduced changes to policies governing currency access and conversion without warning, and such changes have generally become effective immediately upon announcement. Sudan’s inflation rate (in 2017 was 32.35 percent and) as of April 2018 is 55.6 percent up from 54.3 percent in February 2018. The rise in inflation has been attributed to the increase of food commodities, devaluation of the Sudanese currency, and shrinking imports.
Sudan Ministry of Investment lists the process by which businesses must register to operate at: http://www.sudaninvest.org/English/Default.htm . The website outlines procedures for companies that wish to invest including forming and ending relationships and license applications.
“The Companies Act, 2003” provides for regulations for incorporating/registering businesses, both foreign and domestic, in Sudan. There are a number of women business leaders in Sudan who are members of the major business associations. The Sudanese Businesswomen’s Association includes about 100 women business owners in the oil, education, and commodities industries.
A few months after the United States lifted sanction on Sudan; the Sudanese government conducted a number of events to promote foreign direct investment. Several American companies participated in its annual Khartoum International Trade Fair. Other U.S. companies sent exploratory teams to Sudan to test the waters and its investment climate. The Sudanese government has consistently given warm receptions to investors. A number of Sudanese companies visited the United States and made large-scale purchases of U.S. products, dairy cows, irrigation equipment, and services. The host government does not restrict domestic investors from investing abroad, yet seeks to have oversight in companies’ overseas transactions. Sudan’s export sector to any country is tightly controlled by the GoS.
2. Bilateral Investment Agreements and Taxation Treaties
Sudan has signed bilateral investment agreements with Germany, Netherlands, Switzerland, Egypt, France, Romania, China, Indonesia, Malaysia, Qatar, Morocco, Oman, Turkey, Yemen, Bahrain, Ethiopia, Jordan, Syrian Arab Republic, United Arab Emirates, Libya, Tunisia, Algeria, Kuwait, Lebanon, Chad, Republic of Djibouti, India, Vietnam, Bulgaria, and Italy.
Sudan has bilateral taxation treaties with Egypt, United Kingdom, Malaysia, South Africa, Turkey, and Syria. Sudan and the United States do not have a bilateral investment agreement or a bilateral taxation treaty.
3. Legal Regime
Transparency of the Regulatory System
Sudanese investment law states that “just compensation” must be offered in the case of nationalization or confiscation of all or part of any investment for “the public interest.” No mechanism exists for determining compensation or defining specific public interests. The U.S. government is unaware of any outstanding cases involving the expropriation of property belonging to a U.S. citizen or corporation. Rule-making formally exists at the federal level but many decisions are made at the state and local levels. Sudan has a large and active informal business sector such as the gold sector. While the GoS has rules and policies by which the local authorities must abide, it is known that many decisions and sales are made outside the formal market. Legal and regulatory procedures are not always transparent and consistent with international norms. Bills are discussed in the National Assembly and the public does have access to some information. Sudan’s laws are available on demand from the Ministry of Justice or the Attorney General’s Office. Sudan’s Laws Directory, which consists of all laws issued in Sudan, is available at the Judiciary Library. Information on trade and regulations is available in the – Companies Act, The Bankruptcy Act, Business Exchange Act, Land Registration Act; Civil laws are encoded in the Law of Contract, Law of Torts, Law of Agency, Contract Act, the Sale of Goods Act, and the Agency Act. While these laws are encoded, many are not adhered to in practice. Sudan scored 0 out of a scale of (0-6) on the World Bank’s Global Indicators of Regulatory Governance .
International Regulatory Considerations
The World Bank’s June 2017 “Doing Business” annual report ranked Sudan 170 out of 190 countries for the ease of doing business and 33 of 48 in the process of starting a business. The report states there are 10 procedures required to start a business, with each procedure possibly taking up to one month to complete. Sudan’s business starts take longer than average for Sub-Saharan Africa. Additionally, the report measured the ease of obtaining information about the regulatory process. While information about fee schedules for starting a business is available upon request, it is generally difficult to obtain and is not published in laws or decrees. There are no informational brochures, boards, or public notices on the topic in government offices, but some information can be obtained from the Ministry of Investment’s website and from the High Investment Council upon request.
In the speech delivered by the Minister of Finance and National Economy on December 2016 while presenting the FY 2017 budget, he mentioned increasing the VAT tax on communication companies from 30 to 35 percent, increasing of capital gains tax and profit business tax by 37 percent; ownership tax by two percent, taxes on commodities and services by 20 percent; and taxes on trade and international transactions by eight percent. The Government of Sudan lacks transparency in its collection of revenues, including taxes. Sudan has not lowered the customs duties, which are not available to the public. Only the Customs Department knows the various rates of duties.
Legal System and Judicial Independence
Sudan follows both British Common law practices, Islamic Law, and in some cases, customary law. Contracts are to be enforced through the courts. Sudan has written commercial and contractual laws. The judicial system is not seen to be independent of the executive branch. The executive branch has been known to interfere in judiciary matters. The current judicial processes on criminal and civil matters do not always appear to be fair and reliable, particularly in the areas of human rights and religious freedom. Business regulations or enforcement actions are appealable and they are adjudicated in the national court system. The Investment Act of 2013 established courts to handle disputes. There were no publicly announced judicial decisions from the disputes court made in this past year.
Competition and Anti-Trust Laws
Sudan’s contract awards system is opaque. We do not have information to identify which agencies review transactions for competition-related concerns (whether domestic or international in nature).
Expropriation and Compensation
The GoS has control of most of the agricultural land in Sudan and has appropriated millions of acres to Saudi Arabia and other countries. Land laws have been an issue of dispute between local communities and the government and are the source of conflict. The most recent examples of government expropriations were those of the authorities bulldozing churches and selling/having sold the land to private investors. The government claimed the churches did not have permits. Some churches had remained in the same location for decades without permits because the government would not issue them. According to the law, for imminent domain claims, the GoS was to have compensated the churches. That did not happen in all cases. Claimants have alleged a lack of due process as the GoS has not paid for the confiscations. The government claims the churches had no legal right and were simply squatting on the land. Government and Arab militias’ expropriation of land in Darfur, Gedarif, and Kassala states without compensation were reported. In some cases, displaced persons escaping conflicts, returned to their land only to be denied access. In most instances, the GoS did not adequately respond to appeals.
ICSID Convention and New York Convention
Sudan is a member of the Convention on the Settlement of Investment Disputes between State and National of Other States (ICSID). It signed ICSID on Mar. 15, 1967, ratified on Apr. 9, 1973 and entered into force on May 9, 1973. Sudan is now the 159th contracting state to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Convention will enter into force in Sudan on 24 June 2018. https://hsfnotes.com/arbitration/2018/04/11/sudan-becomes-159th-contracting-state-to-the-new-york-convention/
Investor-State Dispute Settlement
Sudan was under more than 20 years of U.S. economic sanctions. U.S. businesses, except those in certain areas such as agriculture and medicine, were prohibited from doing business with Sudan.
International Commercial Arbitration and Foreign Courts
The Sudanese Arbitration Act 2016 codifies Sudan’s role in arbitration. “Application of the Act: Subject to the provisions of international agreements, pertaining to arbitration, to which Sudan is a party: 1) the provisions of this Act shall apply to every arbitration conducted in the Sudan, or abroad, where the parties thereof have agreed to subject the same to the provisions of this Act whenever the legal relation is of a civil nature, whether contractual or non-contractual…” https://www.international-arbitration-attorney.com/wp…/Sudan-Arbitration-Law.pdf
Sudan’s Bankruptcy Act of 1929. People who owe debts in Sudan could be imprisoned until debts are satisfied.
4. Industrial Policies
The GoS offers the following incentives for investing in Sudan:
- Nondiscriminatory treatment of the capital of investment, whether be it public, private, cooperative or multi-sector capital.
- Guarantees not to be nationalized, confiscated or ex-appropriated except through a law and against indemnity.
- The money of the project shall not be confiscated or frozen, except through a judicial order.
- The investor has the right to transfer his money, in case the project was not implemented, and is entitled to transfer the profits, financing cost to import raw materials and to export products.
- The project of investment is also exempted from tax of business profits for a term of not less than 10 years and will be given a free piece of land for the project or at an incentive price, beside custom privileges for cars.
Foreign Trade Zones/Free Ports/Trade Facilitation
There have been no major changes to these zones within the reporting period.
5. Protection of Property Rights
The price of buying and renting real estate property in Sudan is on the rise. According to reports, rental prices are up approximately 50 percent due to “foreign” renters who pay higher prices for real property. Since the lifting of U.S. sanctions in October 2017, the landscape around the Nile has changed from many family-owned agriculture plots to tea houses, restaurants, and docks for Nile cruise boat services. This was a clear indication that the expectation was that the Sudanese economy would quickly grow after the embargo. However, the lack of foreign exchange, and the continuing fuel crisis have halted much of the new construction. Trucks used to haul building supplies have stopped because of unavailable fuel. The average monthly rent for an apartment in Khartoum is USD 300 or SDG 12,900 at the parallel rate of 1 USD=SDG 43. Single family homes are rented for approximately USD 500 (21,500). Private residences in the most exclusive areas of Khartoum (Riyadh, Manshia, Mamora, Taif) cost from USD 300,000 (SDG 12 million) to 10 million dollars (SDG 430 million.) Undeveloped land could now cost around 300,000 for a plot, particularly around the Nile. In other areas on the outskirts of Khartoum such as Alafoun, one could find lower rates for land and flats at around USD 30,000 (SDG 1,290,000). According to the website Global Economy.com (https://www.theglobaleconomy.com/Sudan/herit_property_rights/ ) Sudan received a score of 31 on the Heritage Foundation’s “property rights index.” The index scores from 1 to 100 on whether there are strong property right laws, and adherence to contracts which are enforced by the courts, and whether individuals have rights to own.
Intellectual Property Rights
The legislative framework on intellectual property rights (IPR) is adequate, but enforcement is uneven. Authorities have conducted raids on shops selling counterfeit pharmaceuticals and animal dips, but there is no nationwide campaign to enforce IPR. Likewise, trademarks of popular American businesses, usually chain restaurants, are often used or changed slightly to reflect the original brand. Most, if not all, grocery and hardware stores display American and British name brands shipped from Dubai, Cairo, and Abu Dhabi, and for many consumer goods from Egypt, South Africa, and South Korea. The Sudanese Consumers Protection Society, the only consumer protection society in Sudan, has held seminars and issued warnings about counterfeit goods/pharmaceuticals that threaten public health and safety. The Sudanese Businessmen and Employers Association have also complained about IPR violations.
Sudan is not listed on the USTR’s 2017 Out-Of-Cycle Review of Notorious Markets, or in the 2018 Special 301 Report. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .
6. Financial Sector
Capital Markets and Portfolio Investment
Sudan has a stock market (KSE) which is located in the capital Khartoum. The KSE has 30 companies (http://www.kse.com.sd/ ) that includes Animal Wealth Bank, Financial Investment Bank, and Blue Nile Insurance. There are no companies listed in the Industry, Investment and Development, and Communication and Media sectors. The total market value of all sectors is currently listed as SDG 8,007,640,342,000 (USD 445,115,811,431.) http://www.kse.com.sd/Pages/default.aspx?c=550&sid=1
Money and Banking System
Sudan has not had access to the international banking institutions as it was under strict U.S. economic sanctions. Sudan is currently in a monetary crisis, with limited foreign exchange and a growing currency black market. The CBoS lists banks operating in Sudan at: https://cbos.gov.sd/en/content/operating-banks-sudan
Foreign Exchange and Remittances
Remittances come into Sudan via the informal market. The GoS in November 2017 instituted an incentive rate of exchange to stop the sliding Sudanese pound (SDG) against the dollar and to attract an inflow of cash from Sudanese abroad. International banking institutions have not begun transactions with Sudan although most sanctions have been lifted. Foreign investors should be aware that they might face problems making or receiving payments. The exchange rate is determined by the GoS via the Central Bank and the Ministry of Finance. The national currency rate does not float with the international markets. Rates of exchange are determined by the GoS.
Sovereign Wealth Funds
According to sovereign wealth fund (SWF) websites (Sources: SWFI, 2015, ESADE geo (2015), Investment Frontier (2015), Sovereign Wealth Funds websites), Sudan established a SWF in 2008 called the Oil Revenue Stabilization Fund). The source of the funding was oil with USD 0.2 billion of assets under management at that time.
7. State-Owned Enterprises
The number of state-owned enterprises is not known. While Sudan has a privatization program, it is unclear how many entities are owned by the Government of Sudan. There are more than a reported 178 domestic and international companies operating in Sudan.
8. Responsible Business Conduct
Sudan’s Investment Law the “The National Investment Encouragement Act, 1999, Amended (2013)” sets the standards for business conduct and obligations. The law and its executive rules are applied to both Sudanese and foreign investors. The Ministry of Investment (MoI) 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 MoI 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 make the regulations and are the bodies which settle imbricated 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. Sudan has a number of workers unions chaired by the Sudanese Workers Trade Union Federation e.g. Sudan Railways, port workers, doctors, and Sudanese Businessmen and Employers Federation represent the main business unions that advocate for its members. Corruption remains a problem in Sudan including in governance, and in the supply chain for commodities and minerals within the major cities and in the conflict-affected areas. One recent measure the Government instituted to try and stay the illegal flow of gold from Sudan was to restrict trade (buying and selling) to the Central Bank of Sudan.
The GoS falls short of consistently strong supply chain due diligence. For example, while the GoS 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, import, and export, it does not, through its Ministry of 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 neither an EITI member country nor participates in the Voluntary Principles on Security and Human Rights.
Parliament approved an Anticorruption Law in 2016, which was signed by the Sudanese President and called for the establishment of an independent Anticorruption Commission (ACC). In 2018, the government announced an anticorruption unit (ACU) under the auspices of the National Intelligence and Security Services (NISS) instead of the Ministry of Justice. The public was invited to send reports of instances of corruption, including money laundering to the ACU, which would then investigate, follow up, and transfer cases to the court. According to the 2016 law, anticorruption issues should be handled by the Ministry of Justice through the Special Prosecutor’s office. Enforcement on corruption is weak. The President has not yet formed the ACC.
10. Political and Security Environment
While there have been civil disturbances and political violence associated with protests against the declining economy in Sudan over the past two years, damage to property has not been directed specifically at U.S. business interests. The rising inflation and decreasing availability of petrol are causes for concern and would be investors should take note.
11. Labor Policies and Practices
Labor unions are weak and generally not independent since all trade groups must register with the government and fall under the umbrella of the main official labor union. The current labor market includes foreign/migrant workers from neighboring countries such as Ethiopia and South Sudan. A significant number in Sudan also come from Syrian migrants fleeing the war in Syria. Unskilled labor is plentiful. Skilled labor among professionals is harder to come by as many professionals such as physicians and lawyers who receive opportunities to work abroad do so due to more profitable work environments and higher pay. No significant labor strikes occurred in 2017. However, in late 2016, unofficial doctors’ unions protested subsidy cuts on various imported medicines by the Government of Sudan.
12. OPIC and Other Investment Insurance Programs
There is no OPIC agreement between Sudan and the United States.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
|Host Country Statistical Source*||USG or International Statistical Source||USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
|Host Country Gross Domestic Product (GDP) (M USD)||2016||USD 95,580||2017||USD 117,490||https://data.worldbank.org/country/sudan|
|Foreign Direct Investment||Host Country Statistical Source*||USG or International Statistical Source||USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
|U.S. FDI in Partner Country (M USD, stock positions)||N/A||N/A||N/A||N/A||BEA data available at
|Host Country’s FDI in the United States (M USD, stock positions)||N/A||N/A||N/A||N/A||BEA data available at
|Total Inbound Stock of FDI as % host GDP||N/A||N/A||2017||0.907%||N/A|
* https://tradingeconomics.com/sudan/gdp – 2017
Table 3: Sources and Destination of FDI
Data not available.
Table 4: Sources of Portfolio Investment
Data not available.
14. Contact for More Information
Patricia “Rashidah” Ellis
Deputy Pol/Econ Counselor