Any Sudanese you talk to, whether in Government or on the streets, will tell you that the economy is one of the biggest problems facing the country: high inflation, especially in food items, big public deficit, no foreign currency, little investment.
Of course even the strongest of economies would suffer after the kind of dislocation Sudan has suffered with the separation of South Sudan and the loss of a third of Government income and 75% of export earnings.
That is why implementation of the Addis agreements with South Sudan is so important. Quite apart from the security guarantees and the peace and stability that the agreements would bring they would also pave the way for the re-opening of the trading routes with South Sudan, for the oil (and the revenues it brings) to flow, for a financial package of support for Sudan to be mobilised, and would transform the international trading context for Sudan. The outside world wants to do business with Sudan. It is often and truly said that Sudan is a country of great potential. For example, 57% of total land in Sudan is suitable for agricultural development, but only 8.5% is currently being cultivated – this is a stark statistic at a time when global demand for food is rising, yet land is scarce. The loss of oil may be a blessing in disguise, for it will force the country to focus on developing its own economic strengths: agriculture, minerals and the provision of services to its rapidly urbanising population.
We know that these talks and the economy is of central importance to Sudan and so we are doing what we can. We have provided all documents and historical information to the African Union to facilitate progress in the talks and implementation of agreements. We, the UK, have led the way to help Sudan get full forgiveness of its debt, and are looking at ways to support Sudan’s economic diversification. We are now supporting Young Sudanese Entrepreneurs with training, linking them with entrepreneurs in the UK, and we have even delivered training for Sudanese investment lawyers to aid Foreign Direct Investment to Sudan.
But it’s hard to do business with Sudan in the current environment. Sanctions make a difference. But even without sanctions, investing or trading with a country with such a conflicted relationship with its neighbour and with serious internal conflicts unresolved is a risky business. And it is businesses, not governments, which take these decisions. Even setting aside conflict, the business environment is tough. The World Bank ranks Sudan as one of the most difficult countries in the world to do business. The new investment law is good, but not effectively implemented. And the financial and legal environments are opaque. So many companies stay away.
But not all. A number of British companies are active here, or are attracted by the potential. Some of them have long-standing historical links. Others are approaching Sudan for the first time. It is sometimes said that British companies have walked away from Sudan, as though that it is the fault of the UK. Of course our trading relationships are not what they were 50 years ago. The world (and Sudan and the UK) have changed. But the EU collectively is Sudan’s 3rd largest trading partner and the UK accounts for around 20% of that business. We do more trade with Sudan than with many African countries. We will offer support and advice to any British company interested in Sudan. But if in the event they go elsewhere, that’s not because the UK has “walked away”. It’s because in a competitive global market the Sudan offer is not sufficiently attractive.
We recognise the importance of the private sector to Sudan. It is the private sector here, as elsewhere that is the most effective driver of prosperity. Historically countries only thrive, politically as well as economically, where there is a strong private sector which can create more economic opportunities for people. So we are exploring ways of working with business here and with local government to help develop the supply chains to enable small producers and companies to grow and prosper in a way that benefits the poorest.