A land of vast potential - special advertising section

THE ECONOMIC growth of Sudan over the past 50 years has been mainly derived from irrigation development of the Nile--largely for cotton production, but more recently for peanuts, wheat and sugar cane.

A second spur to expansion occurred with the development, beginning in the early 1950s, of large-scale, rain-fed, mechanized production of sugar and sorghum. Both types of development were concentrated between the confluence of the Blue Nile and White Nile and the clay plains of east central Sudan.

This modern agriculture stands in strong contrast to the largely subsistence agriculture in the more remote areas of the west and the south, giving a dual nature to the Sudanese economy.

Sudan has a land area of about 600 million acres. More than 220 million acres are suitable for agriculture, 180 million are forests, and 200 million are uncultivable. Of the land suitable for agriculture, only some 20 million acres are officially estimated to be under cultivation (of which 4.5 million are under irrigation). So Sudan clearly enjoys a sizable land resource availability.

Agricultural processing is the basis of industrial development in the country and is likely to remain so for some time to come. Sugar processing, oil extraction from crops and textile development are all being expanded.

The agriculture sector dominates the economy, providing means of livelihood for 80 percent of the country's 22 million people, 40 percent of gross national product and 95 percent of exports. The government, hoping to achieve and average overall gross domestic product growth rate of 3.5 percent annually, has a three-year development program under way that ends in 1986.

A total of 2.3 billion Sudanese pounds (U.S. $1.1 billion) has been allocated for the program, of which 31.8 percent is for agriculture, 18.4 percent for transport and 7.5 percent for manufacturing.

Great emphasis is being placed on the rehabilitation of existing agricultural and industrial projects. A drive for self-sufficiency underlies efforts to develop the country's vast agricultural potential. Work is continuing on expanding existing facilities in the power, communications and transportation sectors. Measures to increase productivity and capacity utilization have been intensified, and the role of the private sector in economic development has been expanded and strengthened.

Investments proposed in the development program are directed mainly at increasing exports, which are expected to grow at an annual rate of 17 percent, adjusted for inflation.

In the manufacturing sector, the most important objectives being pursued are increases in the productivity and capacity utilization of the nation's four private sector sugar mills. The idea is to meet the full needs of domestic consumption and to export, too.

The government of Sudan is working with a number of international organizations and friendly countries to rehabilitate the Sudanese sugar industry. About $181.3 million has been allocated--by the World Bank ($60 million), Saudi Fund ($23.5 million), Arab Fund ($47.2 million), Federal Republic of Germany ($17.3 million) and the government of Sudan ($33.3 million).

Effective last April 1, all four mills were converted from public corporations to independent, private sector companies. This is only part of a privatization drive that is taking place in Sudan. Another example is the planned denatinalization of Sudan Airways.

In addition to supporting the private sector by investing in the economic infrastructure and implementing policies to encourage private investment, the government is taking measures to improve the efficiency of public sector enterprise. Among these measures is conversion of public companies to public-private co-ownership.

The country-s energy resources ar now thought to be significantly greater than they were considered to be only a few years ago. Sudan is focusing on the development of a 1,405-kilometer oil export pipeline, and a 70-kilometer spur line, from production facilities in the south and southwest to a new marine terminal at Marsa Nimeiri on the Red Sean near Port Sudan.

Although initial capacity of the pipeline and the terminal will be 50,000 barrels of crude oil a day, capacity can be increased efficiently and economically to 100,000 barrels a day, and ultimately to a maximum of about 200,000 barrels a day, by adding pumping stations, storage and other facilities.

The main pipeline will be 22 inches in diameter in its first part, starting at the oil fields, and 24 inches in its second part.

Chevron Oil Company of Sudan, a subsidiary of Standard Oil of California, is conducting oil exploration in the southern and soutwestern sections of the country and is taking part in development of the terminal on the Red Sea.

Sudan's economy has long been hampered by transportation and communication problems, stemming in part from the enormous logistical difficulties involved in taming vast swamps in the country's interior. The government has finished digging 270 kilometers of the 360-kilometer Jonglei Canal, which will link Sudan's southern and northern sections.

The canal will navigable throughout the year.

It will help settle a seminomadic tribal population of 350,000 by irrigating 3.7 million acres. The canal will channel enormous quantities of water that otherwise would be dispersed into the White Nile. The water will be shared with Egypt, which will bear half of the project's cost.

Sudan has long pinned much of its hopes for increased agricultural productivity on two major irrigation projects--known as Rahad and Gezira. But both have needed major infusions of capital to make them more effective.

Rehabilitation of the Rahad project, which involves 1.2 million acres, was completed recently. Thousands of tenant farmers, living in a region that now has a developed infrastructure--schools, clinics, shops, etc.--can expect a greatly improved living standard. Thousands of other workers are assured of seasonal employment in the area.

The Gezira project involves 2.2 million acres of highly productive land. Until last year, the project's production capacity had steadily declined since the early 1970s, due to fund shortages that resulted in growing backlogs of unmet maintenance and equipment replacement needs. The situation is being corrected.

Last year a 30 percent rise in production was recorded. This helped prevent a major decline in the country's economy as a result of adverse weather conditions that affected Sudan's rain-fed, nonirrigation agriculture.

Sudan's 1984 cotton crop totaled 1.2 million bales, up from 900,000 last year.

Cotton, Sudan's dominant crop, accounts for about 55 percent of the country's exports. It is followed by sesame (9 percent), and peanuts and gum arabic (each 8 percent). Other exports include livestock and hides. Recent crop diversification has concentrated on reduction of imports. Considerable expansion has taken place in wheat and sugar output. Sudan hopes for self-sufficiency in rice, coffee and tea.

Communication with the southern region should get a big boost when a new telecommunication system is installed by Japan's Nippon Electric. In addition, construction of a 600-kilometer road from Juba in the south to Lodwar in Kenya is planned.

Sudan no doubt will continue to provide a number of good opportunities for American firms. The country has an immediate need for machinery and technology to improve its agriculture, infrastructure and mineral industries. In the longer run, it has a potential that is virtually unlimited.

COPYRIGHT 1984 U.S. Chamber of Commerce
COPYRIGHT 2004 Gale Group