Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
After many months of popular protests, the 30-year regime of former President Omar Bashir was ousted 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 government mismanagement, corruption, and the economic practices of the former regime.
Sudan’s CLTG continues to signal its determination to adopt market-based economic reforms, dismantle various government-controlled monopolies, curb popular fuel and food subsidies, and curtail the influence of powerful trading combines. These structural changes to Sudan’s economy could lead to short-term popular unrest but should facilitate the emergence of a more open and liberalized economy.
The United States lifted certain longstanding economic sanctions on Sudan in September 2017, ending a twenty-year embargo and opening the country to U.S. businesses. The United States government (USG) cited Sudan’s progress in combating terrorism and improved humanitarian access in its decision to lift the embargo. In October 2020, President Trump announced the USG would lift Sudan’s designation as a state sponsor of terrorism (SST), a change that will improve Sudan’s international stature and make it more attractive to foreign investors. SST delisting is expected to end Sudan’s isolation from the international banking system and facilitate increased trade and investment.
U.S. businesses are now generally able to transact with individuals and entities in Sudan, and the property of the Government of Sudan subject to U.S. jurisdiction has been unblocked. (Note: These changes, however, did not eliminate the need to comply with all other applicable provisions of law, including the Export Administration Regulations (15 C.F.R. parts 730 through 774) administered by the Commerce Department’s Bureau of Industry and Security (BIS)). Individuals should contact the Treasury Department’s Office of Foreign Assets Control (OFAC) or BIS for additional information.
The United States and Sudan have a small, but growing amount of bilateral trade. Cereals and machinery constitute the top two export categories of goods from the United States and the top two import categories are vegetable extracts and syrup and arts and antiques. Since 2011, the United States has maintained a positive balance of trade in goods with Sudan.
Sudan is a member of the Common Market for Eastern and Southern Africa, which has a Trade and Investment Framework Agreement with the United States.
Financial institutions, concerned with U.S. sanctions and the SST designation, have been reluctant to engage in Sudan. This reluctance has hampered businesses and the public’s 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 (240 SDG: $1 USD in October 2020) and the official exchange rate (55:$1) remain. The CLTG has announced it will seek to unify the two rates by early 2021. In November 2020, the CLTG initiated a program that permitted licensed companies to sell fuel at a commercial rate. These are the CLTG’s first steps at removing fuel subsidies that cost the government close to $2.8 billion annually. Fuel subsidy reform is the first in a series of planned reforms designed at improving government finances and stabilizing the Sudanese Pound.
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. Sudanese business contacts and government officials have expressed a strong interest in U.S. goods, services, technology, and training/capacity programs, particularly in the fields of agriculture, energy, and health care.