Tag: doing business in sudan

Lifting of US Sanctions

The US Government announced the removal of Sudan from the US list of state sponsors of terrorism effective as of Monday 14 December 2020.

After 27 years of US sanctions, such step restores sovereign immunity for the Sudanese government in US Courts. It is also a critical step in the process of reintegrating Sudan into the global economy and offering a lifeline of international financial aid to Sudan.

While the Obama administration took steps to lift sanctions, unfreeze assets and remove financial sanctions in January 2017, the recent declaration that Israel and Sudan intend to normalize relations has played a major role in Sudan’s delisting as a state sponsor of terrorism.

Sudan

Sudan is one of the largest and most geographically diverse states in Africa, recently having been split into two countries (Sudan and South Sudan – July 2011) after the people of the south voted for independence. It borders Egypt, Libya, Chad, the Central African Republic, South Sudan, Ethiopia and Eritrea. Sudan is also a country of great economic potential: strategic location, gold reserves, oil and gas fields, mineral resources, a favourable climate, as well as excellent irrigation and soil conditions.

Investment Law

Sudan’s National Investment Encouragement Act (the “Act”) of 2013 promotes foreign direct investment and prohibits discrimination against foreigners in investments. The Act defines three types of investment projects: national, strategic and state. Sudan has put in place an open investment legislative framework with several laws and regulations that are modern and based on best practices. The Act also establishes the National Investment Council, chaired by the President of Sudan. The focus and objective

of this council is to facilitate investment in all sectors of the Sudanese economy. The Act allows foreign and domestic private entities to establish and own business enterprises and to repatriate capital and profits.

New Era

Given the recent removal of Sudan from the US list of state sponsors of terrorism and given the normalization of the ties between the US and Sudan, investment opportunities in Sudan have opened up. It has been reported that multinational US corporations have already signed MOUs to invest in Sudan. This is the beginning of a new era for Sudan and a promising time to invest. Early movers are likely to reap the benefits, provided investments are structured in a prudent manner. ■

On 11 April 2019, President Omar al-Bashir of Sudan stepped down, ending almost three decades in power. A Transitional Military Council (TMC) was formed to pave the way for civilian rule. TMC and the Forces of Freedom and Change (FFC) opposition coalition have reached a final agreement on the rule of the transitional period of 39 months. The agreement provides for the formation of a sovereign council, cabinet and legislative council. After the transitional period, Sudan is to become a democracy.

US Sanctions

In January 2017, the Obama administration took steps to lift certain US sanctions, unfreeze assets and remove financial sanctions against Sudan. A full lifting of US sanctions is expected in the short term given the recent occurrences in Sudan. Sudan has significant untapped opportunities which include its strategic location, significant mineral resources, a population of more than 40 million, a favourable climate and some of the most fertile land in the region. Indeed, Sudan has the potential to be one of the best economic success stories of our time.

Opportunities

Sudan offers multiple investment opportunities:

• Natural Resources/Mining: Sudan has always been known for its abundant natural resources, especially gold, oil, gas, chrome, manganese, zinc, aluminum, cobalt, and nickel. Gold production in Sudan reached 22.3 tons in 2016, ranking as one of the top producers in Africa.

• Agriculture: With the majestic Nile river running through it, Sudan has more than 150 million hectares of arable land. The climate is suitable for all types of crops, and water irrigation is readily available and/or natural. Sudan specialises in cereal production (sorghum, millet, wheat, corn and rice), crops (cotton, sugar, peanuts, sesame, and gum Arabic), and tropical fruit and vegetables.

• Livestock: Sudan is highly regarded in both the Middle East and Africa with regards to its livestock and animal resources. Sudan has national animal resources, which include cattle, camels, sheep, goats, poultry, horses, and an annual stock of more than 110,000 tons of fish.

• Transport: As Africa’s third-largest country and bordering seven countries, Sudan offers great opportunities for investment in the transport sector. The weakness in the improvement of the transport network remains one of the greatest constraints to the economy.

• Industry: Investment opportunities in the industry sector in Sudan include the following sub-sectors: agro-processing, food, spinning and textiles, leather, chemicals, pharmaceuticals, oil and soap, engineering, building materials and refractories, and printing and packing.

Given its recent move towards democracy, Sudan is an emerging market offering access to one of the few internationally untouched markets. ■