- Economic growth slowed in 2016 to an estimated 3% as a result of the decline in oil production and macroeconomic imbalances and is projected at 3.4% in 2017 and 3.6% in 2018 on the back of improved performance in the non-oil sector and temporary lifting of US sanctions.
- The government’s attempts to expand the democratic space in the context of national dialogue augur well for an improved economic performance and political stability.
- The share of Sudan’s entrepreneurs outside agriculture is sizable but the limited number of entrepreneurial programs, scarce technical training and the challenging business environment call for a coherent national strategy to boost and harness entrepreneurial energy and talent for inclusive growth.
Sudan’s economic growth was adversely affected by a number of factors, including the breakdown of correspondent banking relationships during the period 2014-16, declining oil revenues because of low export prices, ageing oil fields and reduced inflows of oil transit fees from South Sudan. Gross domestic product (GDP) growth is estimated at 3% in 2016, compared to 4.9% the previous year and forecast at 3.4% and 3.6%, respectively, for 2017 and 2018. In the short and medium terms, growth will be determined by developments in the agricultural and mineral sectors, skills development and prudent macroeconomic policies and structural reforms aimed at improving the business climate. Significant downside risks include continuing civil wars in some parts of the country and low global commodity export prices.
The macroeconomic imbalances and the consequent widening of the fiscal deficit by 0.2 percentage points in 2016, continue to constrain growth. Although the current account deficit narrowed by 1.1 percentage points in 2016, it is projected at a higher level in 2017 (4.9% of GDP) and expected to further widen to 5.6% in 2018. Closing the fiscal and current account deficits is a major policy priority especially in the face of low tax revenues and shortfalls in oil export receipts as well as difficulties in accessing concessional financing. However, the partial conditional easing of the US trade sanctions in early 2017 is expected to contribute to economic stability and boost foreign direct investment (FDI) and remittances from Gulf countries to the benefit of the most vulnerable.
During the period 2009-11, the share of Sudan’s entrepreneurs outside the agricultural sector declined from 56.8% to 47.3%, whereas the proportion of urban entrepreneurs increased from 46.3% to 49.8% and that of female entrepreneurs rose to 17.3%, up from 14.9%. Thus, there is need to improve the business environment, given that Sudan’s overall score on the World Bank’s distance from frontier rating has worsened from 49.3 in 2009 to 44.8 in 2017. Generally, entrepreneurship is not encouraged as a professional career and this is reflected in the lack of a national plan for developing entrepreneurship and by the small number of technical secondary schools (98) versus academic secondary schools (3 128).