The Economy

Sudan Table of Contents

THE ECONOMY OF SUDAN continued to be in disarray in mid-1991. The principal causes of the disorder have been the violent, costly civil war, an inept government, an influx of refugees from neighboring countries, as well as internal migration, and a decade of below normal annual rainfall with the concomitant failure of staple food and cash crops.

The economic and political upheavals that characterized Sudan in the 1980s have made statistical material either difficult to obtain or unreliable. Prices and wages in the marketplace fluctuated constantly, as did the government's revenue. Consequently, information concerning Sudan's economy tends to be more historical than current.

In the 1970s, economic growth had been stimulated by a large influx of capital from Saudi Arabia and Kuwait, invested with the expectation that Sudan would become "the breadbasket" of the Arab world, and by large increments of foreign aid from the United States and the European Community (EC). Predictions of continuing economic growth were sustained by loans from the World Bank and generous contributions from such disparate countries as Norway, Yugoslavia, and China. Sudan's greatest economic resource was its agriculture, to be developed in the vast arable land that either received sufficient rainfall or could be irrigated from the Nile. By 1991 Sudan had not yet claimed its full water share (18.5 billion cubic meters) under the 1959 Nile Waters Agreement between Egypt and Sudan.

Sudan's economic future in the 1970s was also energized by the Chevron Overseas Petroleum Corporation's discovery of oil on the borderlands between the provinces of Kurdufan and Bahr al Ghazal. Concurrently, the most thoroughly researched hydrological project in the Third World, the Jonglei Canal (also seen as Junqali Canal), was proceeding ahead of schedule, planned not only to provide water for northern Sudan and Egypt, but also to improve the life of the Nilotic people of the canal zone. New, large agricultural projects had been undertaken in sugar at Kinanah and cotton at Rahad. Particularly in southern Sudan, where the Addis Ababa accords of March 27, 1972, had seemingly ended the insurgency, a sense of optimism and prosperity prevailed, dashed, however, when the civil war resumed in 1983. The Khartoum government controlled these development projects, but entrepreneurs could make fortunes through the intricate network of kinship and political relations that has traditionally driven Sudan's social and economic machinery.

In the early 1970s, public enterprises dominated the modern sector, including much of agriculture and most of large-scale industry, transport, electric power, banking, and insurance. This situation resulted from the private sector's inability to finance major development and from an initial government policy after the 1969 military coup to nationalize the financial sector and part of existing industry. Private economic activities were relegated to modern small- and medium-scale industry. The private sector dominated road transport and domestic commerce and virtually controlled traditional agriculture and handicrafts.

In the 1980s, however, Sudan underwent severe political and economic upheavals that have shaken its traditional institutions and its economy. The civil war in the south resumed in 1983, at a cost of more than £Sd11 million per day. The main participant in the war against government was the Sudanese People's Liberation Army (SPLA, the armed wing of the Sudanese People's Liberation Movement (SPLM)), under John Garang's leadership. The SPLA made steady gains against the Sudanese army until by 1991 it controlled nearly one-third of the country.

The dearth of rainfall in the usually productive regions of Sahel and southern Sudan added to the country's economic problems. Refugees, both Sudanese and foreigners from Eritrea, Ethiopia, Uganda, and Chad, further strained the Sudanese budget. International humanitarian agencies have rallied to Sudan's aid, but the government rejected their help.

When Jaafar an Nimeiri was overthrown in April 1985, his political party disappeared, as did his elaborate security apparatus. The military transitional government and the democratically elected coalition government of Sadiq al Mahdi that succeeded the exiled Nimeiri failed to address the country's economic problems. Production continued to decline as a result of mismanagement and natural disasters. The national debt grew at an alarming rate because Sudan's resources were insufficient to service it. Not only did the SPLA shut down Chevron's prospecting and oil production, but it also stopped work on the Jonglei Canal.

On June 30, 1989, a military coup d'état led by Colonel (later Lieutenant General) Umar al Bashir overthrew the government of Sadiq al Mahdi. Ideologically tied to the Muslim Brotherhood and dependent for political support on the Brotherhood's party, the National Islamic Front, the Bashir regime has methodically purged those agencies that dealt primarily with the economy--the civil service, the trade unions, the boards of publicly owned enterprises, the Ministry of Finance and Economic Planning, and the central bank. Under Bashir's government, Sudan's economy has been further strained by the most severe famine of this century, the continuation of the war in the south, and a foreign policy that has left Sudan economically, if not politically, isolated from the world community.


For more recent information about the economy, see Facts about Sudan.

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Source: U.S. Library of Congress