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These programs have been drawn with own belief and
philosophy to achieve socio-economic resilience with
transformation; and with the aim of transcending political
legitimacy to the stage of democratic constitution and to
achieve peace and national unity within the framework of the
federal system of rule, adopted since 1992, and market-oriented
economy.
The formulation of such programs takes on board the
lessons learned and the achievements made as well accommodates
the developments that are taking place at the national, regional
and international levels. It has been a monumental task to
reverse the economic stalemate through concerted and arduous
efforts that moved the economy dramatically from stagnation that
characterized the period before the 1990s to high records of
economic performance attained almost across all sectors, a case
for continued successful economic reform. Now, macro-economic
stability is demonstrated in sustained economic growth rates
averaging 6% during the period 1990 – 2001, low and stable
inflation rate of one digit, sustained low budget deficit of
less than 2% of GDP, non-expansionary monetary policies,
improved balance of payments (registering surpluses for the last
four years) and an appropriate and stable exchange rate. All
these send encouraging signals to private investors, economic
operators and financial institutions worldwide about economic
policy management credibility and direction.
Economic performance shows that GDP growth rates of 6%
during the decade, have surpassed the population growth rate of
2.6% during the period 1990 – 2001. Agriculture which accounts
for an average contribution of 50% of GDP during the 1990s is
the principal contributor of output growth. Output structure and
growth of real output have moved in favor of plant and animal
traditional sub-sectors, both of which have imparted steady
output increase since 1991. Such changes, though within broader
terms, have accelerated the pace of integration of the rural
traditional activities into the monetary orbit and enlarged the
domestic market. Henceforth, food security has greatly been
improved along with building up and maintaining strategic food
reserve. Manufacuring share of GDP has increased from an average
of 15% during the 1990s to 22.8% in 2001 and is expected to
increase more in year 2002. This increase is ascribed mainly to
the emerging petroleum sector, mining and intermediary
industries particularly sugar and pharmaceuticals. Moreover,
both domestic and foreign resource gaps used to be financed by
foreign aid were substancially narrowed leaving only a tune of
8% financial gap secured from domestic and foreign sources. The
emerging petroleum sector has apparently influenced a change in
the production structure, public revenue and exports. The bulk
of its resources shall be directed to improve the
competitiveness of the economy particularly in the fields of
agriculture, basic infrastructure including technological
infrastructure and essential services in addition to SMEs and
electric power generation, transmission and distribution.
The Government has opted for free market as a basis for
managing the economy, increasing the utilization of idle
productive capacities especially in agriculture and industry,
enhancing the absorptive capacity of the economy to accommodate
strategic investments in addition to improving competitiveness
of goods and services produced and encouraging the private
sector both domestic and foreign through incentive policies and
through rigorous privatization programs implementation. About 53
public enterprises have been privatized and 13 are programmed
for privatization this year. These include two commercial banks,
the Duty Free Shops and Zones Company and companies in the
fields of road, sea and air transport. Along side these
developments, major steps have been taken to enhance the
investment climate. These include, inter alia, elimination of
adverse factors inhibiting FDI and domestic resource
mobilization, liberalization of markets, trade and payment
regimes, revision of the legal and regulatory framework and
adopting the internationally recognized BOT system while
maintaing a conducive and stable macro-economic environment. A
specific reference is made to the wide scale tax reforms that
has taken place last year, 2001. These include erasing tax on
agriculture and commodity exports, except for hides and skins
and development tax on investments. Also maintenance and
depreciation allowances have been increased from 30% to 35% and
from 20% to 30% respectively. Other tax relief measures include
the introduction of family exoneration system on personal income
tax including real estate income, raizing the threshold of
taxable personal income of both public and private employees,
reducing the level of tax rates on public liability companies
from 20% to 15%, repealing custom duties on computers and
digital machines and equipment and amending custom rates to 0%,
10%, 25% and 45%.
The
Investment Encouragement Act of 1992 has been reviewed in 1999
to cope with the developments in trade and investment that are
taking place at local, regional and international levels. It
offers exemption from business profit tax for 10 year, exemption
from custom duties and free of charge allotment of land for a
wider range of strategic investments. For non-strategic
investments, encouraging price incentives are granted. The Act
guarantees private investment from nationalization,
confiscation, incarceration and deprivation of ownership.
Repatriation of dividends and capital are also secured. It also
constitutes mechanisms for dispute settlements, the
relationships between the investor from one side and the Central
and State levels from the other side, the rights and obligations
of investors in addition to the identification of strategic and
non-strategic investment fields.
In this regard, Sudan poised increasing interest in adopting the
Data Dissemination System promulgated by the Bretton Woods
institutions and endeavours to keep good quality of information
flows that assists the decision making process and promotes
investment. As a result of these concerted efforts, both local
and foreign investments have leaped to appreciable levels
specially in the fields of petroleum, mining and transport.
Companies of different nationalities have joined in financing of
oil extraction, transportation and development facilities
including those from China, Malaysia, Canada, the United Arab
Emirates, Qatar, Britain, Italy, Argentina ….. etc. In the
field of gold mining, France has taken the lead while in the
field of road transport, sea ports facilities, tourism and hotel
industry some companies from Turkey, Syria, Saudi Arabia,
Jordan, Tunisia and Malaysia are pioneers.
Efforts are currently exerted to explore opportunities for
boosting the roles and functions of the International Finance
Corporation (IFC), the Multilateral Investment Guarantee Agency
(MIGA) and the Arab Corporation for Investment Guarantee.
Recently both Kenana Sugar Company and Sudan telecommunications
Company (Sudatel) have managed to secure loans from the OPEC
Fund and Islamic Development Bank (IDB) special private sector
windows amountiong to US$ 18 million. In the area of external
financial and economic cooperation, policy measures taken have
expedited the utilization of available resources provided by the
funding institutions in the form of loans and grants. A notable
development in this context is the attestation of the IMF of a
good policy track record of Sudan’s economic performance. It
has improvised the Government to normalize relations with the
donor community be it multilateral, regional or bilateral
agencies.
Sudan has signed financing agreements, in 2001, with some Arab
Funds, the OPEC Fund, IFAD, IDB and other financiers to meet the
cost of some development projects and to rehabilitate old
schemes in the field of perennial irrigation for agriculture,
road construction, railways, health, education, water supply and
power generation of new thermal stations of capacity of around
700 MW with a total cost of US$ 210 million. Also some US$ 550
million have been solicited and commited from mainly Arab funds
sources to partially finance a 1250 MW Hamdab Dam. It is worth
mentioning that some of the thermal electric power units are
financed through the “BOT” system. Such developments
depicted above are testaments of resurgent economic health made
possible through sustained economic growth and stable
macro-economic environment that were set in motion for more than
a decade.
Now, this website shall be kept updated and improved for you
potential investors, business community members and all
interested parties to grapple with such spawning and enticing
environment along with your respective areas of interest.
I
thank you in anticipation for visiting our website.
Mr.El
Zubair Ahmed Al Hassan
MINISTER OF FINANCE & NATIONAL ECONOMY
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