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Sudan investment profile

  1. 1. International Business Management Sudan ProfileProfessor Dr.: Ashraf Emam prepared by: 1- Khaled Nazeer 2- 3- Amin El Khodary Amir El Naghy Cohort : 4 4- Ahmed Galal Group: Cairo Date: November 2012
  2. 2. Sudan Overview National Name: Jamhuryat as-Sudan President: Lt. Gen. Omar Hassan Ahmad al-Bashir (1989) Current government officials: Total area: 1,156,673 sq mi (1,861,484 sq km) Population: 34,206,710 Note: includes the population of South Sudan (8,260,490), demographic data includes south sudan (July 2011 Est.) (Growth rate: 2.1%) Birth rate: 33.2/1000 Infant mortality rate: 78.1/1000 life expectancy: 52.5 Density per sq mi: 46 Capital (2003 est.): Khartoum, 5,717,300 (metro. area), 1,397,900 (city proper) Largest cities: Omdurman, 2,103,900; Port Sudan, 450,400 Monetary unit: Sudanese poundGeography Sudan, in northeast Africa, measures about one-fourth the size of the United States. Itsneighbors are Chad and the Central African Republic on the west, Egypt and Libya on the north,Ethiopia and Eritrea on the east, and South Sudan, Kenya, Uganda, and Democratic Republic ofthe Congo on the south. The Red Sea washes about 500 mi of the eastern coast. It is traversedfrom north to south by the Nile, all of whose great tributaries are partly or entirely within itsborders
  3. 3. Sudan Overview Cont.GovernmentIslamic, Military government.History BriefIn 1999, however, Bashir ousted Turabi and placed him under house arrest. (He wasfreed in Oct. 2003.) Since then Bashir has made overtures to the West, and in Sept.2001, the UN lifted its six-year-old sanctions. The U.S., however, still officiallyconsiders Sudan a terrorist state.A cease-fire was declared between the Sudanese government and the SudanPeoples Liberation Army (SPLA) in July 2002. During peace talks, which continuedthrough 2003, the government agreed to a power-sharing government for six years,to be followed by a referendum on self-determination for the south. Fighting on bothsides continued throughout the peace negotiations.In a historic seven-day secessionist referendum that began in southern Sudan onJanuary 9, 2011, 98.8% of voters chose independence from the north. Thereferendum was a provision of the 2005 Comprehensive Peace Agreement, whichended a 22-year civil war that killed 2.5 million people and displaced 4 million.President Bashir accepted the results and said he would not seek reelection when histerm expires in 2015.
  4. 4. Sudan Political ProfileWhat is now northern Sudan was in ancient times the kingdom of Nubia, which came underEgyptian rule after 2600 B.C. An Egyptian and Nubian civilization called Kush flourished untilA.D. 350. Missionaries converted the region to Christianity in the 6th century, but an influx of MuslimArabs, who had already conquered Egypt, eventually controlled the area and replaced Christianity withIslam. During the 1500s a people called the Funj conquered much of Sudan, and several other blackAfrican groups settled in the south, including the Dinka, Shilluk, Nuer, and Azande. Egyptians againconquered Sudan in 1874, and after Britain occupied Egypt in 1882, it took over Sudan in 1898, ruling thecountry in conjunction with Egypt. It was known as the Anglo-Egyptian Sudan between 1898 and 1955.The 20th century saw the growth of Sudanese nationalism, and in 1953 Egypt and Britain granted Sudanself-government. Independence was proclaimed on Jan. 1, 1956. Since independence, Sudan has beenruled by a series of unstable parliamentary governments and military regimes. Under Maj. Gen. GaafarMohamed Nimeiri, Sudan instituted fundamentalist Islamic law in 1983. This exacerbated the rift betweenthe Arab north, the seat of the government, and the black African animists and Christians in the south.Differences in language, religion, ethnicity, and political power erupted in an unending civil war betweengovernment forces, strongly influenced by the National Islamic Front (NIF) and the southern rebels,whose most influential faction is the Sudan Peoples Liberation Army (SPLA). Human rights violations,religious persecution, and allegations that Sudan had been a safe haven for terrorists isolated the countryfrom most of the international community. In 1995, the UN imposed sanctions against it.On Aug. 20, 1998, the United States launched cruise missiles that destroyed a pharmaceuticalmanufacturing facility in Khartoum which allegedly manufactured chemical weapons. The U.S. contendedthat the Sudanese factory was financed by Islamic militant Osama bin Laden.
  5. 5. Sudan Social ProfileEthnic groupsArabs 70%, others being Arabized ethnic groups of Nubians,Copts, and Beja. Others (Fur, Nuba, Fallata).Languages: Arabic, Nubian language, Beja languagePopulation: 34,206,710Note: includes the population of South Sudan (8,260,490);demographic data includes SouthSudan (July 2011 est.)Age structure0-14 years: 42.1% (male 9,696,726/female 9,286,894)15-64 years: 55.2% (male 12,282,082/female 12,571,424)65 years and over: 2.7% (male 613,817/female 596,559) (2011 est.)Population growth rate: 1.884% (2011 est.)Birth rate: 31.7 births/1,000 population (2011 est.)Death rate: 8.33 deaths/1,000 population (July 2011 est.)Net migration rate:-4.52 migrant(s)/1,000 population (2011 est.
  6. 6. Sudan Social Profile Cont.LiteracyDefinition: age 15 and over can read and writeTotal population: 61.1%Male: 71.8%Female: 50.5% (2003 est.)Maternal mortality rate750 deaths/100,000 live births (2008)Children under the age of 5 years underweight31.7% (2006)Health expenditures7.3% of GDP (2009)Physicians density0.28 physicians/1,000 population (2008)Hospital bed density 0.7 beds/1,000 population (2008)
  7. 7. Sudan Economic Profilesudan is an extremely poor country that has had to deal with social conflict,civil war, and the July 2011 secession of South Sudan - the region of the country that hadbeen responsible for about three-fourths of the former Sudans total oil production. The oilsector had driven much of Sudans GDP growth since it began exporting oil in 1999. Fornearly a decade, the economy boomed on the back of increases in oil production, high oilprices, and significant inflows of foreign direct investment. Following South Sudanssecession, Sudan has struggled to maintain economic stability, because oil earnings nowprovide a far lower share of the countrys need for hard currency and for budget revenues.Sudan is attempting to generate new sources of revenues, such as from gold mining, whilecarrying out an austerity program to reduce expenditures. Services and utilities have playedan increasingly important role in the economy. Agricultural production continues to employ80% of the work force and contributes a third of GDP. Sudan introduced a new currency,still called the Sudanese pound, following South Sudans secession, but the value of thecurrency has fallen since its introduction and shortages of foreign exchange continue.Sudan also faces rising inflation, which has led to a number of small scale protests inKhartoum in recent months. Ongoing conflicts in Southern Kordofan, Darfur, and the BlueNile states, lack of basic infrastructure in large areas, and reliance by much of thepopulation on subsistence agriculture ensure that much of the population will remain at orbelow the poverty line for years to come.
  8. 8. Sudan Economic Profile Cont.Sudan Structure of Goss Domestic Product (GDP)GDP - real growth rate -4.5% (2011 est.)
  9. 9. Sudan Economic Profile Cont.GDP (purchasing power parity)$97.21 billion (2011 est.)$97.41 billion (2010 est.)$91.49 billion (2009 est.)note: data are in 2011 US dollarsGDP (official exchange rate)$63.3 billion (2011 est.)GDP - real growth rate-0.2% (2011 est.)6.5% (2010 est.)4.6% (2009 est.)GDP - per capita (PPP)$3,000 (2011 est.)$2,400 (2010 est.)$2,300 (2009 est.)note: data are in 2011 US dollarsGDP - composition by sectoragriculture: 25%industry: 29.3%services: 45.7% (2011 est.)
  10. 10. Sudan Economic Profile Cont.Population below poverty line40% (2004 est.)Labor force11.92 million (2007 est.)Labor force - by occupationagriculture: 80%industry: 7%services: 13% (1998 est.)Unemployment rate18.7% (2002 est.)Household income or consumption bypercentage sharelowest 10%: NA%highest 10%: NA%Investment (gross fixed)24.6% of GDP (2011 est.)Budgetrevenues: $8.991 billionexpenditures: $11.89 billion (2011 est.)
  11. 11. Sudan Economic Profile Cont.Taxes and other revenues14.6% of GDP (2011 est.)Budget surplus (+) or deficit (-)-3.6% of GDP (2011 est.)Public debt100.8% of GDP (2011 est.)90.8% of GDP (2010 est.)Inflation rate (consumer prices)15.8% (2011 est.)13% (2010 est.)Stock of money$6.256 billion (31 December 2008)$5.549 billion (31 December 2007)Stock of narrow money$6.694 billion (31 December 2011 est.)$7.875 billion (31 December 2010 est.)Stock of broad money$19.36 billion (31 December 2011 est.)$14.53 billion (31 December 2010 est.)Stock of quasi money$4.264 billion (31 December 2008)$4.068 billion (31 December 2007)Stock of domestic credit$11 billion (31 December 2011 est.)$12.99 billion (31 December 2010 est.)
  12. 12. Sudan Economic Profile Cont.Market value of publicly traded shares$NAAgriculture - productscotton, groundnuts (peanuts), sorghum, millet, wheat, gumarabic, sugarcane, cassava (tapioca), mangoes, papaya, bananas,sweet potatoes, sesame; sheep and other livestockIndustriesoil, cotton ginning, textiles, cement, edible oils, sugar, soapdistilling, shoes, petroleum refining, pharmaceuticals, armaments,automobile/light truck assemblyIndustrial production growth rate3.5% (2010 est.)Electricity - production4.323 billion kWh (2008 est.)Electricity - production by sourcefossil fuel: 52.1%hydro: 47.9%nuclear: 0%other: 0% (2001)Electricity - consumption3.787 billion kWh (2008 est.)
  13. 13. Sudan Economic Profile Cont.Oil - production514,300 bbl/day (2010 est.)Oil - consumption98,000 bbl/day (2010 est.)Oil - exports383,900 bbl/day (2009 est.)Oil - imports11,820 bbl/day (2009 est.)Oil - proved reserves5 billion bbl (1 January 2011 est.)Natural gas - production0 cu m (2009 est.)Natural gas - consumption0 cu m (2009 est.)Natural gas - exports0 cu m (2009 est.)Natural gas - imports0 cu m (2009 est.)Natural gas - proved reserves84.95 billion cu m (1 January 2011 est.)
  14. 14. Sudan Economic Profile Cont.Current Account Balance-$5.003 billion (2011 est.)-$3.868 billion (2010 est.)Exports$7.705 billion (2011 est.)$11.4 billion (2010 est.)Exports - commoditiesoil and petroleum products; cotton, sesame, livestock,groundnuts, gum arabic, sugarExports - partnersChina 68.3%, Japan 12.6%, India 5.8% (2009)Imports$8.427 billion (2011 est.)$8.839 billion (2010 est.)Imports - commoditiesfoodstuffs, manufactured goods, refinery and transportequipment, medicines and chemicals, textiles, wheatImports - partnersChina 21.7%, Egypt 8%, Saudi Arabia 7.7%, India 6.1%, UAE 5.7%(2009)
  15. 15. Sudan Economic Profile Cont.Reserves of foreign exchange and gold$1.651 billion (31 December 2011 est.)$2.063 billion (31 December 2010 est.)Debt - external$39.71 billion (31 December 2011 est.)$37.7 billion (31 December 2010 est.)Exchange ratesSudanese pounds (SDG) per US dollar -2.8 (2011 est.)2.31 (2010 est.)2.3 (2009)2.1 (2008)2.06 (2007)Fiscal yearcalendar year
  16. 16. South Sudan Economic Profile Cont.Industry and infrastructure in landlocked South Sudan are severelyunderdeveloped and poverty is widespread, following several decades of civil warwith the north. Subsistence agriculture provides a living for the vast majority ofthe population. Property rights are tentative and price signals are missing becausemarkets are not well organized. South Sudan has little infrastructure - just 60 kmof paved roads. Electricity is produced mostly by costly diesel generators andrunning water is scarce. The government spends large sums of money to maintaina big army; delays in paying salaries have resulted in riots by unruly soldiers.Ethnic conflicts have resulted in a large number of civilian deaths anddisplacement. South Sudan depends largely on imports of goods, services, andcapital from the north. Despite these disadvantages, South Sudan does haveabundant natural resources. South Sudan produces nearly three-fourths of theformer Sudans total oil output of nearly a half million barrels per day. Thegovernment of South Sudan derives nearly 98% of its budget revenues from oil.Oil is exported through two pipelines that run to refineries and shipping facilitiesat Port Sudan on the Red Sea, and the 2005 oil sharing agreement with Khartoumcalled for a 50-50 sharing of oil revenues between the two entities.
  17. 17. Sudan Int’l Trade ProfileSudan has long had an adverse foreign trade balance. Foreigntrade has been negatively influenced by the civil war andinternational isolation. In August 1999, Sudan started exporting oil.Nearly 70 percent of the oil production is exported. In 1999-2000,the country experienced its first trade surplus. That surplus rose toUS$500 million in 2000 on exports of US$1.7 billion and imports ofUS$1.2 billion.Foodstuffs are the most important import into Sudan. But steeland alloy products were the main industrial items having beenimported to Sudan. Their imports accounted for US$76.6 million.Spare parts import accounted for US$88.3 million, audio and videodevices for US$43.1 million, refrigerators for US$112.2 million,personal cars for US$30.2 million, lorries and trucks for US$38.7million, and buses for US$6.8 million.
  18. 18. Sudan Import & Export ProfileIn 2010, Sudan has a current account deficit of US$5.79 billion.Crude oil and petroleum were the key export commodities of thenation, followed by cotton and sesame. Other chief Sudan Exportitems are:LivestockGum ArabicGroundnutsSugarA rise in imports is a key factor responsible for Sudan’s tradedeficit. According to the CIA, Sudan’s imports rise from $8.25billion in 2009 to $8.48 billion in 2010. Some chief Importcommodities of Sudan are:Manufactured goodsTransport equipmentMedicinesChemicals
  19. 19. Sudan Relationship with Egypt ProfileIn Relationship between Egypt & Sudan , as following news below :-Egyptian Bank to Fund in Sudan with 500 million dollars,Egypt and the Sudan agree to resume participation in EN_COM(EasternNile Technical Regional Office ).Egypt and Sudan are bilateral relations between Egypt and Sudan.
  20. 20. Our RecommendationGeneral Investment Scope by Sector:-Agriculture sector:Growing grain, Cane cultivation.Industry sector:Livestock farms.Poultry farms.Slaughter and freezing healthy.Dairy Products.Packaging grain.Sugar Industry.Motorcycle and bicyclePharmaceutical industriesService sector:HospitalsSoftwareTraining & EducationElectronic government programPharmaceutical
  21. 21. Our RecommendationTeam Recommended the sector (Agriculture):-The Reason behind choosing This Investment according to the following pointbelow:-As per our study about this country from different areas like (Economic – Social –Political – Trade Investment{Import & Export} and Finally the relation betweenSudan with behind countries and specially Egypt).In Economic Side, we notice Sudan has struggled to maintain economic stability,because oil earnings now provide a far lower share of the countrys need forhard currency and for budget revenues. Sudan is attempting to generate newsources of revenues, such as from gold mining, while carrying out an austerityprogram to reduce expenditures. Services and utilities have played anincreasingly important role in the economy. Agricultural production continues toemploy 80% of the work force and contributes a third of GDP. Sudan introduceda new currency, still called the Sudanese pound, following South Sudan’ssecession.
  22. 22. In Trade Investment (Import & Export), Agricultural products in total account forabout 95 percent of the countrys exports. In 1998 there was an estimated 16.9 millionhectares (41.8 million acres) of arable land and approximately 1.9 million hectares (4.7million acres) set aside for irrigation, primarily in the north of the country along thebanks of the Nile and other rivers. Cash crops (as of 1999) grown under irrigation inthese areas include cotton and cottonseed, which is of primary importance to theeconomy with 172,000 tons and 131,000 tons produced annually respectively, sesame(220,000 tons), sugarcane (5,950,000 tons), peanuts (980,000 tons), dates (176,000tons), citrus fruits, yams (136,000 tons), tomatoes (240,000 tons), mangoes, coffee, andtobacco. The main subsistence crops produced in Sudan are sorghum (3,045,000 tons),millet (1,499,000 tons), wheat (168,000 tons), cowpeas, beans, pulses, corn (65,000),and barley.] Cotton is the principal export crop and an integral part of the countryseconomy and Sudan is the worlds third largest producer of sesame after India andChina.In Relationship between Egypt & Sudan , as following news below :-Egyptian Bank to Fund in Sudan with 500 million dollars,Egypt and the Sudan agree to resume participation in EN_COMEgypt and Sudan are bilateral relations between Egypt and Sudan.Kindly note that we covered more detailed about event news A,B and C in above text.
  23. 23. General recommendation:Egypt must avail organizational cover to the investment process in Sudan,especially in the presence of the international restriction byinternational sanctions and chases International Court of Justice should the Egyptian stateto provide protection to investors and businessmen wanting to invest in Sudan throughthe establishment of Association for investors in Sudan is working to create anenvironment to invest in Sudan.Also must share in insurance policies to cover the risks of investing in Sudan to encouragebusinessmen to invest, especially with Sudan, which is a natural extension of the depth ofEgyptian.As part of the integration and also to create the appropriate environment for thedevelopment of business should expand in the establishment of scientific institutes of theEgyptian universities to create culture and thought, as is the case in Khartoum branch ofCairo University.As State must take policies that help convergence and the development of relations anddevelopment through a range of activities such as sports activities and technical andcultural exchanges and allow works of art Sudanese presence on the map of works of artin Egypt is also recommended cultural exchange through book fairs and cultural seminars.
  24. 24. As the State Egyptian cooperation with Sudan, north and south in the areas of health, especially the health of women and children because of its great impact on the development of relations between the two countries and especially that Sudan suffers from a high in infant mortality and women ofchildbearing age and recommend the appointment of expanding medical cooperationto include all areas and assign a percentage of Egyptian doctors to work in Sudan withappropriate financial compensation also recommend creating a hospital specializing inthe treatment of chronic diseases experienced by many of the citizens of SudanAs part of the integration and also to create the appropriate environment for thedevelopment of business should expand in the establishment of scientific institutes ofthe Egyptian universities to create culture and thought, as is the case in Khartoumbranch of Cairo University.From our standpoint, investors should exercise extreme caution in the case of long-term investment and recommend short-term investments (two years or less) or quicktransactions, but in the case of long-term investment must take political and economicchanges and inflation into account when making feasibility studies, and must provideappropriate protection from by the Egyptian government and the associationsproposed investors.