Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
On October 25, 2021, the Sudanese military overthrew the civilian-led transitional government (CLTG) that had governed Sudan since August 2019, thwarting the Sudanese public’s democratic aspirations. The international community, including most donor countries, the World Bank (WB), and International Monetary Fund (IMF), responded by pausing nearly all assistance and international debt relief efforts. Military authorities imposed a state of emergency and a wave of crippling nationwide anti-government protests resulted in further political turmoil that negatively impacted economic activity. Sudan’s 2022 GDP growth, initially projected at 3.5 percent by the IMF, has been revised down to 0.4 percent and an economic contraction for 2022 is likely. Annual inflation is falling but is still high at 192 percent as of May 2022 while the Sudanese Pound (SDG) was trading at about 565 SDG: $1 in June 2022. The SDG has been stable for most of 2022 after steadily depreciating in recent years.
The agriculture and extractive industries are Sudan’s top economic drivers. Sudan’s vast amount of arable land and geographic proximity to the Persian Gulf economies position it to be a potential “breadbasket” for the region. However, numerous market challenges, including distribution bottlenecks, lack of credit, scarcity of inputs (e.g., seeds, fertilizers), and outmoded production methods have negatively affected the sector’s export potential and increasingly the country’s ability to feed itself. For 2022, a poor harvest season, lack of funding for imported agricultural inputs, government mismanagement, and the Ukraine crisis could push a third of the population into food insecurity by September 2022, according to the United Nations. Sudan’s domestic market currently offers little opportunity for growth. Unemployment is approximately 40 percent and low household incomes leave most Sudanese struggling to afford basic commodities, including food and fuel. Extractive industries offer differing opportunities and challenges, with gold a key export. Gold exports are a leading source of hard currency, but large portions of the supply chain lack transparency, making it difficult to accurately estimate the market’s annual output. Sudan has limited oil and natural gas reserves, but years of underinvestment in this sector have significantly reduced productivity.