Ministry of Health’s wide-ranging development to comprise various projects in Saudi Arabian capital Riyadh.
Ministry of Health says project targets radiology and medical imaging services covering several hospitals in the greater Riyadh region
Saudi Arabia’s Ministry of Health has announced that it is seeking local and international healthcare service providers to take part in its first public-private partnership (PPP) project.
Firms have until July 1 to submit expressions of interest for the PPP project, which targets radiology and medical imaging services covering several hospitals in the greater Riyadh region.
The ministry said this marks a major step forward for PPP projects in the Gulf kingdom that is continuing to encourage private sector participation in a bid to meet rising demand for quality healthcare.
The PPP project is expected to improve healthcare access to over a million people in the Riyadh region, as well as improve waiting times and reliability of scans.
According to a report by Colliers last year, Saudi Arabia needs to recruit at least 3,700 additional doctors by 2020.
The Gulf kingdom also requires up to an extra 18,400 hospital beds, based on pessimistic population growth statistics of 1.02 percent from the World Bank.
Its Saudi Healthcare Overview 2018 report also said the country needs to invest up to $6.2 billion in healthcare real estate and a further $2.2 billion on medical fit-outs by the end of the decade.
The government of Sudan has identified 76 potential sites for tourist villages along the country’s 750km Red Sea coast, and is planning to build 10 in the next year.
Sudan is probably not the first destination that springs to most people’s minds when planning a couple of weeks in the sun: summer temperatures in Khartoum regularly exceed 43°C (110°F), and even at the cooler Red Sea Coast temperatures and humidity are stifling.
Then there is the reputation of the country – still designated a state-sponsor of terrorism by the US State Department – and the existence of hazards such as yellow fever in the south.
Nevertheless, there has been a significant growth in the country’s tourist industry over the past three years, and government agencies are eager to encourage foreign investment in what is almost entirely a blank page.
Nasruddin Ahmed al-Awad from the Ministry of Tourism told Al Arabiya that the government of Sudan is hoping to market itself to adventurous holidaymakers as a place to find winter sun. It has identified no fewer than 76 potential sites for tourist villages along the country’s 750km Red Sea coast, and is planning to build 10 in the next year.
The first of its kind: Imam Osman’s DeCock’s Red Sea Resort (Supplierd)
The plan aims to take advantage of two pioneers who explored the possibilities of the Sudanese coast. One was the legendary oceanographer Jacques Cousteau, who built an underwater station, Précontinent II, near a reef known as Sha’ab Rum in the 1960s, and televised the variety of flora and fauna and the clarity of the waters.
The other is Iman Osman DeCock, a businesswoman who opened practically the only resort on the entire coastline. This is the Red Sea Resort, about 30km north of Port Sudan, and it was opened in 2000 as eco-resort for divers. She is hoping to attract nature and diving enthusiasts to the area, which combines pristine dive sites with a wide variety of wildlife, including eagles, terns and camels.
She told the Al Arabiya news site: “The resort offers tourists the opportunity to enjoy untouched pristine beaches, the beauty of nature and the clean environment around the Red Sea mountain chain. We will be able to provide diving vacations and courses for those who want to learn.”
DeCock has also provide a template for the country’s nascent tourist industry – and the infrastructure that will come with it.
Top image: A school of barracudas above Sha’ab Rum (YouTube)
Sea port workers of the eastern Sudanese Red Sea province supported the country’s ongoing revolution by going on strike, protesting corruption and demanding civilian rule.
A political activist, Mohamed Al-Zaki, says that unlike Sudan’s earlier revolutions, protests started in the peripheries as opposed to the centre, specifically in the eastern province of the Red Sea and its ports.
“Port Sudan is among the first to participate in this revolution. It has a large and inspirational role, along with other states like al-Damazeen and Niyala. We can say that the revolution was launched from the edges of Sudan, and was later transported to the centre. This is opposed to the earlier revolutions, which started first from the centre and then spread to the edges of Sudan,” Al-Zaki added.
Port Sudan is among the first to participate in this revolution. It has a large and inspirational role.
Workers of the Sea Ports Corporation gathered at the headquarters, assembling outside the building, chanting and waving banners.
A member of the Sea Ports Corporation also said that the port has managed to bring in 9 million Euros since the 22nd and 23rd of March.
Sudan’s main protest group called for a general strike on Tuesday saying two late-night negotiation sessions with the military had failed to reach a deal on how to lead the country after the overthrow of former president Omar al-Bashir.
“A lot of countries observe the strategic issue of the Red Sea. They try to seize the ports for their own benefits, in order to meet its own strategic goal. They enter through the ports of the weak-hearted. Thank God, we are able to improve our condition. We ask the Military Council’s new government, which has put the agreement on hold (agreement allowing a company from the Philippines to purchase the southern port), to cancel the agreement. We want it to cancel the agreement,” said Head of Communications, Sea ports Corporation, sami Al-Sayegh.
Bashir, the former Islamist general under whose rule Sudan was placed on a U.S. list of sponsors of terrorism, was ousted by the army after months of protests against soaring prices, cash shortages and other economic hardships.
Apart from exploration licences, Sudan also has under-developed blocks up for licensing, where oil is proven to exist
Sudan is calling on investors to give it a second chance as the crisis-struck nation prepares to launch a bidding round for oil exploration in 2019. In the interim, it is open for direct negotiations.
Sudan has experienced much hardship, first from a decade-long imposition of US sanctions then the secession of South Sudan in 2011, which took the bulk of the oil output with it. This was compounded by a severe drop in oil prices and caused the government to default on contractual obligations, which severely hurt investor sentiment.
“Sudan has been suffering for quite some time, we feel confident that now is really the time for a second boom in this country,” Sudanese minister of petroleum, gas and minerals Azhari Abdalla told press at the Africa Oil Week conference in Cape Town. “We are open and willing to receive whoever wants to come and invest in our country with an open mind and open arms — no restrictions whatsoever.”
Although the sanctions were partially lifted by the US in October 2017, it has not translated into economic revival in Sudan where poverty is endemic and, last month, an emergency economic reform plan was launched and strict austerity measures announced.
Abdalla said the nation believes its issues will be behind it by the second half of of next year, including the remaining sanctions as the nation is now involved in a second phase of dialogue. At that time, Sudan plans to launch the bid round for exploration licences. In the interim it is in direct negotiations with potential investors and are looking at some offers received.
A previous attempt at a bid round in 2010 attracted 77 companies but the effort was frustrated by sanctions. “It was difficult and frustrating, particularly for an investor that wants to do exploration,” said Abdalla. “It’s capital intensive, it needs ease when coming in and out of the country and transferring funds.”
Apart from exploration licences, Sudan also has under-developed blocks up for licensing, where oil is proven to exist but where difficulties caused production to dwindle.
Sudan also holds other resource potential and is a also a major gold producer, the minister said.
Sudan is now also collaborating with South Sudan to bring significant resources, which have been idle for six years back on stream, Abdalla said.
The nation expects oil production to ramp up from 75,000 barrels per day (bpd) to 120,000 within a year and aims to begin exporting product again within the next three to five years.
This article was produced for the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation.
Sub-Saharan Africa is undergoing the largest wave of urban growth in history. Since the beginning of the century, the urban population in the region grew by more than 200 million people. Today, 430 million people, or 38% of the population of sub-Saharan Africa, live in a city. This relentless urbanisation process brings huge social, economic and environmental transformations.
Urbanisation is often seen as a negative evolution of the human condition. The increasing number of people living in urban centres brings up the demand for housing, services (electricity, water and sewerage), education and for jobs. If this demand is not met, the result is poverty. Nowhere is the rise of inequality clearer than in urban areas, where wealthy communities coexist alongside, and separate from, slums and informal settlements.
However, urbanisation, if done correctly, can generate many good fruits. Commuting becomes cheaper and faster as cities concentrate people and businesses in a smaller area. A city has a greater variety of markets and goods than rural areas. More diverse job opportunities and easier access to education make cities a potential source for economic growth and self-development. Cities converge consumers and their spending and create new markets for goods and services. In the next 15 years, consumer spending in African cities is projected to reach US$2.2tn, a three-fold increase from current levels.
With the highest urbanisation rate after Asia, the future cities in Africa will require fast but comprehensible planning. By 2030, cities in sub-Saharan Africa will be home to 715 million people (Figure 1), or 47% of the population of the region. Basic housing and public services in urban areas such as healthcare, education, and public safety will struggle to match the growth rates of the urban population across the region. The growth of urban concentrations will be such that by 2030, sub-Saharan Africa will have 82 cities with more than one million people (Figure 2). From these, at least five will be mega-cities with more than 10 million people.
Figure 1 – Urban and rural population in sub-Saharan Africa
Figure 2 – Number of cities with over one million people in sub-Saharan Africa
According to Tinashe Hatendi, business development manager for Africa at Surbana Jurong, urbanisation largely happens because of economic growth: “People move from place to place looking for new economic opportunities to better themselves, better their lives. At the heart of any urbanisation process, lies an economic driver.”
Surbana Jurong has a significant presence in Africa. Its footprint extends over 29 countries and includes 1,500 professionals in the continent. The company is involved in a range of different projects: from sewage treatment systems in Kenya, passing through capacity improvement of highways in South Africa to the rehabilitation of water dams for power generation in Malawi.
Across sub-Saharan Africa, there is a growing concern from mayors and governors about creating a long-term plan for the development of urban and industrial areas. Singapore, one of the world’s most densely-populated countries, brings its expertise in urban planning to Africa with the help of companies such as Surbana Jurong, Hyflux and Meinhardt.
In the past two years, Surbana Jurong acquired two companies that helped accelerate the expansion of business in Africa: SMEC, a large engineering company with downstream capabilities, and Robert Bird Group (RBG), which specialises in the construction of iconic buildings.
Surbana Jurong is responsible for the city planning of Kigali, the capital of Rwanda (Figure 3). Launched in 2011 and with the aim of guiding the city development for the next 20 to 30 years, this comprehensive venture includes the optimisation of the transit system and development of affordable housing in the suburban areas of Kigali. The city will have three districts: Nyarugenge district will serve as a financial hub, Kicukiro, as a knowledge hub, and Gasabo will be the employment and cultural heart of the city.
Kigali’s master plan is one of the most recognised projects undertaken by Surbana Jurong in the African continent, winning the 2010 Best Overseas Planning Project Award and the Best Planning Project Award, in 2013, from the Singapore Institute of Planners Awards. This project helped disseminate the idea that a city can only reach optimum standards through the development of careful planning and thorough execution.
Following the creation of the master plan in Kigali, Surbana Jurong organised the construction schedule. The company established an office in Kigali from where the team of engineers and architects could closely follow the project execution.
Figure 3 – Kigali’s city plan
Master planning in Lagos
Surbana is also responsible for the master planning of Lekki New Township, which will accommodate the residential demands of Lagos’s expansion in Nigeria.
With a population of 21 million people, Lagos is not only the most populous city in Africa, but it is also one with the highest growth rates. The fast population growth adds further strain to the already insufficient public services and housing conditions in the city. Lagos’ population is projected to reach the 30 million mark by 2030.
In total, the Nigerian government created 12 development plans to address the infrastructural challenges of Lagos for the next 15 years. Located on the outskirts of the economic capital of Nigeria, the Lekki peninsula is an important economic arm of metropolitan Lagos (Figure 4). Besides Surbana Jurong’s township planning, the Nigerian government has created the Lekki Free Zone (LFZ) as a landmark for the industrial development of Lagos.
The development of the LFZ is 40% funded by the State, with the remaining 60% provided by Chinese counterpart China-Africa Lekki Investment Ltd. Until May of 2017, 116 investors had registered with the LFZ, from which 16 had commenced full operations. The project will have a deep sea port (in which the Singaporean group Tolaram played a major role), a new airport, an industrial park, a warehousing area, and it will also host an amusement park, hotels, a cultural centre, a golf course, hospitals and schools. It will be home to 3.4 million people and have a non-residential population, such as touristic, hotels, commercial, offices, hospitals and industrial, of about 1.9 million people. Eventually, the LFZ will be turned into an industrial satellite city of Lagos.
Another urban development linked to Lagos is the upgrade of the Ikorodu township, which proposes to turn this rapidly expanding settlement into an eco-friendly contemporary development. Ikorodu is a suburban town, with 40% of its inhabitants driving daily to work in nearby Lagos. Besides the construction of residential areas and the expansion and improvement of roads and public transportation, the project includes an e-library, a fire station, a seaport and hospitals.
Figure 4 – Metropolitan Lagos
Master planning elsewhere in Africa
In 2016, Surbana Jurong secured its largest master planning contract to date. The company will be responsible for the conceptual planning of the Northern Savannah Ecological Zone of Ghana and the detailed master-planning of the cities of Buipe and Tamale. The zone covers 54.4% or 130,262km2 of the land area of Ghana.
In Gabon, Surbana Jurong was appointed by Singapore Cooperation Enterprise (SCE) as the master planner for the Greater Libreville region, estimated to be 1,000km2 or around 1.5 times the size of Singapore.
Surbana Jurong is also in charge of another huge master planning contract. Covering an area of 9,600km2, the company is designing the future of Kinshasa, the capital of the Democratic Republic of the Congo (DRC). The project includes a regional plan, a master plan of Kinshasa and a detailed master plan of 24 municipalities in the surrounding areas. Kinshasa has a population of about 10 million people. This figure is expected to double by 2050.
Hyflux in Africa
Many other cities in sub-Saharan Africa started having their master plans inked in the recent years. In Tanzania, the Star City Township project in the Tungi Special Economic Zone is an example. Tungi is located within the urban limits of Morogoro City, 160km from Dar es Salaam. The project is a partnership between Singapore company Hyflux and a local developer. Hyflux has an extensive track record in the construction of water desalination plants and power generation plants (waste-to-energy and gas turbine) in various locations around the globe. For the Star City project, Hyflux will develop the infrastructure, utilities and environmental solutions.
The Star City project will feature an industrial park, a residential area for 140,000 people and a university town with educational facilities. The project also includes plans for the construction of hotels, a golf course and a theme park, all aimed at attracting tourists. The development will also have its own power plant and water treatment facilities. Phase one of the project is expected to be completed by 2025.
Meinhardt in Africa
Another Singapore company that is gaining space in the urban infrastructure sector in Africa is engineering company Meinhardt. Meinhardt is a Singapore end-to-end engineering company responsible for the design and construction supervision of the Nairobi Pinnacle Tower in Kenya (Figure 5). When completed in December 2019, the 320m skyscraper will be the tallest building on the continent.Meinhardt is responsible for projects such as The Dubai Mall, the World Trade Centre 2 in Indonesia, the KL Central Station in Malaysia and the BHP Global headquarters in Melbourne.
Figure 5 – Nairobi Pinnacle Tower, 320m tall
Meinhardt started growing in Africa very recently. Sanjay Sharma, regional director for Africa at Meinhardt, assisted the group to enter into the East African market in 2016, by advising and identifying the acquisition of an engineering company in Nairobi, Kenya. The company continues to expand in the region and recently opened an office in Kigali, to manage its projects in Rwanda.
Sharma states that East Africa suffers from a huge infrastructural gap in terms of roads and railways. “Kenya needs about 10,000km of new roads today,” which will assist in the challenges facing urbanisation in Africa. Meinhardt is currently looking at road construction supervision projects in Kenya.
For all the good prospects of investments in urban development, it is not a surprise that Meinhardt has selected Kenya and Rwanda as strategic countries for investment. Sharma considers that these countries have been promoting multiple infrastructure projects in the recent years and that foreign companies can operate with little interference from the government. However, he emphasises that the government could be more proactive when it comes to giving the go-ahead on large construction projects.
Urbanisation across Africa is usually focused on the largest cities, sometimes neglecting mid-size and small towns. A more balanced urbanisation process has the benefit of giving more options to businesses and industries of different sizes to establish themselves closer to their target market. Rwanda, for example, is making a conscious effort to develop secondary cities and avoid putting pressure on Kigali’s infrastructure. The goal is to promote the local economy through investment in infrastructure and providing technical assistance to district governments in enabling and partnering with the private sector.
Otavio Veras is an adjunct researcher of the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation. Otavio can be reached at email@example.com
Sudan has featured prominently in the news the past few months. Among the reasons for this phenomenon, was the USA lifting sanctions against the country, although it still kept Sudan on the list of countries sponsoring terrorism. Qatar, Russia, Saudi Arabia, Turkey, and the UAE have all reached out to Sudan in one form or another. The latest news involved Sudan experiencing a serious cash-flow problem, to the extent that it is trimming its foreign diplomatic services quite seriously.
This article looks at the investment environment in Sudan. The article is based on secondary reseach material and the aim thereof is to gain a macro picture of the investment situation in Sudan. The country has a GDP of US$96bn, which is higher than East African favourites of Ethiopia and Kenya, in spite of having had to endure USA sanctions and embargoes. One could therefore ask what this country’s economy could have looked like had they not had to endure these economic constraints.
Setting the scene
In spite of the challenges that Sudan is experiencing in the financial services sector, the country presents numerous investment opportunities, several in the financial services sector. Many of these opportunities require funding. This is where Sudan needs serious development. Some of the opportunities can be difficult to tap into given the lack of liquidity, and the challenges in the political sphere are an additional deterrent to investors as well. Still, for the keen investor there is a wealth of opportunity to unlock.
From the World Bank’s ease of doing business index for 2018, it is clear that Sudan is not the easiest place to do business. Ranking globally at 170 out of 190 countries, there is scope for a lot of improvement. Figure 1 below provides a breakdown of the elements that constitute the rankings. These are issues that need urgent reforms to entice foreign investors into the country.
Figure 1: Rankings on Doing Business: Sudan. Source: World Bank, 2018
Another macro ranking that is of concern, is Sudan’s position on the Corruption Perception Index of Transparency International. Of the 180 countries on the index, Sudan only came in at 175, which is a serious indictment against the Sudanese leadership. It has not succeeded in the five years since 2012 to bring about meaningful change. Together with the rather bleak picture from the ease of doing business index, this low ranking on the corruption index is a source of serious concern. See Table 1 for information on Sudan’s corruption reality.
According to Chambers and Partners, Sudan is a country of great economic potential. It has a strategic location, gold reserves, oil & gas fields, other mineral resources, a favourable climate, as well as excellent irrigation and soil conditions.
Sudan’s National Investment Encouragement Act of 2013 promotes foreign direct investment (FDI) 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.
Investment opportunities in Sudan
Chambers and Partners have identified the following investment opportunities in Sudan:
Natural resources/mining: Natural resources, especially gold, oil, gas, chrome, manganese, zinc, aluminium, cobalt, and nickel. Gold production in Sudan reached 22.3 tonnes in 2016, ranking it as one of the top producers in Africa.
Agriculture: With the 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), and tropical fruit and vegetables.
Livestock: Sudan is highly regarded in both the Middle East and Africa for its livestock and animal resources. The country has national animal resources, which include cattle, camels, sheep, goats, poultry, horses, and an annual stock of more than 110,000 tonnes of fish. The most important animal products in Sudan are milk, meat, poultry, skins, fur and wool.
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 transport network remains one of the greatest constraints to the economy.
Industry: Investment opportunities in industry in Sudan include the following sub-sectors: agri-processing, food, spinning and textiles, leather, chemicals, pharmaceuticals, oil and soap, engineering, building materials and refractories, and printing and packaging.
Foreign investment in Sudan
Nevertheless, in spite of the mentioned challenges and constraints, potential investors were already moving into Sudan from the Gulf, Asia, Europe and South America in March 2017, some of them well before this time.
China has invested in various aspects of the industry until it now controls as much as 75% of the Sudanese oil industry. Sudan currently produces 133,000 barrels of oil per day – a fraction of what it produced before the south of the country seceded in 2011, taking most of the country’s proven oil reserves with it. Today, Chinese companies are looking for new oil deposits in Sudan as increasing oil production is one of the government’s priorities. While China started in oil, they now have other interests in trade, mining, and construction as well. Within the oil industry today, most of the engineers and technical experts in Sudan and South Sudan are Sudanese. They were trained in China. Sudan is the only country in Africa where, over time, more locals have been employed by Chinese companies (Hammond, 2017).
Saudi Arabia and the Saudi private sector are currently investing in maritime transport in Sudan, benefiting from the strategic situation of Sudan, to construct new harbours and ports at the Red Sea. The development of all transport units, particularly maritime transport, and the construction of new ports and harbours are deemed as very important.
The UAE agreed in the beginning of 2017 to provide the Central Bank of Sudan (CBoS) with a $400m deposit as a reserve. In addition, the Sudanese government had formed a joint business council with Bahrain to promote investments. A Saudi company was financing an industrial estate north of Khartoum with $150m.
Qatar has also been positioning itself in a meaningful way in Sudan. Qatari investments in Sudan represent a large proportion of foreign investment in this country, through Qatari institutions such as Qatar National Bank (QNB), Diar Real Estate Investment, Widam, Hassad Food Company, Barwa Real Estate Group and Qatar Mining, in addition to Silatech, Education Above All and Qatar Museums projects, as well as Qatar Charity, Qatar Red Crescent, the five Darfur projects and the UN Development Fund for Darfur projects. The current Qatari investment in Sudan amounts to more than $2bn and is expected to rise with the introduction of new sectors such as Qatar Mining Company (QM), which will invest more than $1bn in its field.
Turkey’s investment footprint in Sudan has become quite visible. Sudan needs an investment of approximately $500bn in various sectors, amongst others in its significant gold and copper mines. Given its lack of proper mining technology, Sudan has certain limitations. Turkish businesspeople were urged to establish a system to process those metals and integrate them with Turkey’s gold exchange market to provide overseas finance for Sudan. Five consortiums were created with Sudanese and Turkish businesspeople in the fields of construction, energy, mining, agriculture and machinery. The construction consortium includes building roads, bridges, hotels, schools and infrastructure works.
In 2014, Turkey and Sudan signed an agreement to rationalise resources and agricultural potential and contribute to sustainable food objectives. Under the agreement, around 780,000 hectares across five regions were earmarked for investment by Turkish entrepreneurs. Talks were concluded for establishing livestock laboratories based on international standards in Sudan, which is one of the largest animal-breeding countries in Africa. Turkey’s exports to Sudan totalled $395.2m in 2017, while imports from Sudan stood at $86.2m.
In February 2018, agreements totalling $50m in the fields of water and energy were signed, including the construction of a dam on the Nile river. Turkey also offered Sudanese officials cooperation in software education by providing a turnkey system for schools in the country. The Turks were willing to increase this investment if Sudan was prepared to remove bureaucratic hurdles and improve its financial infrastructure. A further indication of Turkey’s support for Sudan, is the announcement of a bilateral trade volume target of $10bn by President Erdogan during his visit to Sudan in December 2017. During this visit of President Erdogan, Turkey and Sudan agreed to establish a strategic cooperation council and to enhance trade agreements between the two countries.
Turkey also supported Sudan in its banking sector. A Turkish company will support the Central Bank of Sudan with $2bn, which will be used for the import of petroleum products and wheat. The amount is to be paid back within two years. In addition, two shipments of petrol have been sent to Sudan, along with four shipments of cooking gas.
In another venture, a Turkish company, Summa, will build the new Khartoum international airport at an estimated cost of $1.15bn.
Russia has agreed to supply Sudan with a small-capacity floating nuclear plant to produce electricity, and will endeavour to complete the technical studies to build Sudan’s nuclear power plant within eight years. The project is part of a plan to generate more than 5,000 megawatts by 2020 (Anon, 2018).
In a recent development, Sudan invited Russian companies (Rosneft, Gazprom, Lukoil, and Tatneft) to take part in the development of its oil industry. The Sudanese government offered Russian energy companies several oil sites, including both producing and untapped ones, as well as fields that are currently being developed by other foreign companies, whom the Russian players would help to increase production.
Several years ago, FDI, although low in value, was still visible in Sudan. FDI fell from $2.3bn in 2010 to $1.3bn in 2014, before recovering to $1.7bn in 2015. In 2010, a German petroleum company made a $1.6bn investment in a lubricant plant, and in 2015 there were two investments worth $1.1bn by an Egyptian pharmaceutical company.
Chinese companies, which control 75% of foreign investment in Sudan’s oil sector, may now face fierce competition. Executives at oil companies in the UAE say they are surveying oil-rich areas in the south of the country for potential business, assessing political stability and security concerns.
Sectoral investment opportunities in Sudan
Infrastructure development in Sudan has a national focus and is directed in five-year plans. Based on results of the first Five-Year Plan (2007-2011), Sudan has already invested heavily in infrastructure development, with total government spending on infrastructure of SDG 5.4bn ($297.05m) (representing 27% of total spending under the first Five-Year Plan). Key areas of investment included transport, water supply and sanitation, electric power and communication networks.
However, the country’s growing infrastructure needs are beyond the budget capacity of local and central governments. This is not unique to Sudan and is the case for all of Africa. In 2014, the country’s overall budget deficit amounted to SDG 4.4bn ($242.04m). In order to bridge the funding gap, long-term funding provided by commercial banks and the private sector through public-private partnerships (PPP) was essential.
Investment in infrastructure will be important as Sudan looks to increase the competitiveness of domestic trade and facilitate national integration. Currently, areas with poor infrastructure are isolated, resulting in high costs of goods and services and limited investment from reluctant capital providers.
Backed by government initiatives, Sudan’s banking sector has several growth opportunities to stimulate current economic development through infrastructure enhancement. The role of banks in financing infrastructure projects needs to be increased. Banks therefore need attractive and innovative infrastructure financing tools and clear marketing strategies. Currently, infrastructure projects are complex and have several distinct phases that require different banking instruments. To capture the potential growth of infrastructure financing, banks in Sudan should design products for each distinct phase of an infrastructure project, including planning, construction, and operations.
In the agriculture sector, Sudan has a lot of uncultivated arable land. According to foreign investors in agriculture, should Sudan have a sound strategy and an effective agriculture structure, it would be able to not only feed itself, but the entire MENA (Middle East and North Africa) region. As it is, Africa as a whole is a potential target market, given that the continent is a net importer of food to the tune of $35bn annually.
Tackling the agriculture sector is a key priority as its growth is directly linked to improving Sudan’s infrastructure environment. Today, agricultural lands are not well utilised in Sudan mainly due to inadequate roads, insufficient water supply, and a lack of electric power in these isolated areas.
After the South Sudan secession on July 2011, Sudan changed the focus of its economic plan to revive the agriculture sector given that southern oil production accounted for over 75% of the country’s total production (representing nearly 36% of Sudan’s revenues). The agriculture sector employs 80% of the country’s workforce and accounts for nearly one third of GDP. In general, the agriculture sector represents a business line that banks should focus on, especially with regards to financing trade, working capital, and capital expenditures.
Technology in Sudan’s agriculture
Sudan is looking to the agriculture sector as an important source of growth and diversification for the economy. However, the proportion of agriculture financing accounted for only 16% of banks’ finances in 2014, despite the fact that the CBoS offered commercial banks incentives to collaborate in financing productive sectors (agriculture and industry). Challenges facing the agriculture sector require numerous initiatives. Such initiatives should be focused on providing financing opportunities and innovative offerings:
Development of technical and functional capacity for policy and planning.
Enhancement of agriculture productivity and production.
Agricultural research and development.
Reforming land tenure and land-use systems.
Investment in rural infrastructure, e.g. irrigation systems, slaughterhouses, agro- processing facilities and markets.
Rehabilitation of rangelands (i.e. pastures and water supplies) and facilitation of fair resource sharing.
Expanding disaster risk management to include challenges arising from climate change
It seems that various European companies are interested in the agri-sector in Sudan. While much of the country is desert, it also has an estimated 20 million hectares of arable land – nearly as much as Mexico.
Food made up 16% of exports in 2017 from a country that lies close to markets with rapidly expanding or wealthy populations, such as in Egypt and the Gulf. In 2016, the UAE and Saudi Arabia were Sudan’s second- and third-biggest overall export markets respectively, behind China.
Table 2 provides an indication of the supply and demand of some agricultural products. It is clear that there was insufficient supply in 2017 of the following products: maize, wheat and rice. These therefore constitute significant investment opportunities to meet internal demand. However, there is always the potential to export into the rest of MENA, as well as to sub-Saharan Africa.
According to Ahmed Amin Abdellatif, the president of Khartoum-based CTC Group, given consumption patterns and population growth, agriculture is going to be, strategically, a very important sector over the next few decades.
Table 2: Supply and demand of selected agricultural products in Sudan, 2017. Source: FAO, 2018
Sectors like aviation, reduced to rundown and aged planes, could be on the brink of revival. Sudanese aviation companies have had approaches from global companies to begin trading spare parts. A new flight path from Port Sudan to Jeddah, Saudi Arabia, was set to start operating in early April 2017, indicating potential plans for tourism investment in Sudan’s untouched Red Sea reef.
According to Sudan’s State Minister of Investment, the profit margins in Sudan were higher than elsewhere in the region or the rest of the world, due to the high demand. In December 2017, his aim during his trip throughout Europe was to attract FDI inflows of $10bn a year, compared with the UN’s estimates of $1bn in 2016. He stated that he had already seen a surge in interest in Sudan’s agricultural, energy and mining sectors, as well as power generation projects.
The World Bank’s estimates of Sudan’s GDP at $96bn is considerably higher than two African countries more open to foreign investors, i.e. Kenya and Ethiopia. These countries have GDPs of about $70bn each, despite larger populations and no sanctions. The removal of sanctions against Sudan would hopefully create a strong attraction for Sudan for foreign investors. Should Sudan’s circumstances normalise, there would be considerable growth potential.
According to the Minister of Investment, Sudan’s first big projects are already on the horizon, with plans to sign mining concessions with European, Canadian and Russian companies. Oil concessions are also being discussed with Turkish companies and a big Norwegian group was in talks over a renewable energy project. Russian companies have also been invited to participate in the oil industry.
The Sudanese government must come to the party by instituting reforms to gain improvements in the World Bank’s ease of doing business index. Various other countries have committed themselves to bring about substantial changes and reforms. The same goes for their ranking on Transparency International’s Corruption Perception Index. Ranking at 175 out of 180 countries is a serious deterrent. Linking with its poor position on the ease of doing business ranking (170 out of 190), makes it a double whammy.
Having said all of the above, there is clearly significant investment potential in Sudan. With the lifting of sanctions and embargoes, it will not take too long for the more adventurous to move into Sudan. As a matter of fact, these are already in Sudan. Late movers will be left to pick up the crumbs, if anything.
The author, Johan Burger, is the director of the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation. Johan can be reached at firstname.lastname@example.org
Khartoum – The Ministry of Commerce is preparing to host the 21st COMESA summit in Khartoum in 2019 after the last summit held in Lusaka last July welcomed the hosting of Khartoum to the summit.
The Ministry of Commerce is in the process of developing a road map for the summit host, after the formation of a committee working in order to schedule the summit.
Secretary General of the COMESA Secretariat in the Ministry of Commerce, Mutasim Makkawi said that the hosting agreement with the COMESA Secretariat will be signed after the date of the Summit, expecting that Sudan will benefit from all COMESA projects, as well as EU partners and others, as well as to take advantage of certain jobs and expand the circle of participation in the organization, which will help in the future in all aspects of the organization.
It is noted that in the previous summit, Sudan stressed its support for all COMESA programs and full cooperation with member states for a bright future to the continent, referring to Sudan’s potential for integration into COMESA economic integration projects, the establishment of a free trade zone, and Free continental zone.
Currently, COMESA is rolling out instruments of Digital Free Trade Area (DFTA), that incorporates e-Trade, e- logistics and e-legislation to minimise physical barriers in its member States. The COMESA’s Digital Free Trade Area is a new concept and a first for Africa and for many other continents.
Job insecurity is a very real concern for all humans, rich and poor.
We go through the education process with the hope of guiding our skills and knowledge base into a profession that will one day reap its rewards. When we enter the education system, by that I mean primary school, secondary school and university we do so at a young age oblivious to the purposes of attendance.
When we reach maturity and “enter into the world” as my maths teacher used to say, the hunt for financially rewarding work and further skills begins.
Capitalism is the private ownership of production, distribution and exchange. Good education is a cornerstone of the capitalist markets.
Imagine yourself as a 17 year diploma graduate, you do not have the skills or experience to enter into any decently waged employment and so you have the option of further studies in your field of interest to take you to a better paid level of profession. Depending on your motivation, demographics and upbringing you choose a course that is best suited to match your knowledge needs and hopefully future financial needs.
Again your choice of studies here is critical as for the next 3–5 years you will spend your time and money learning a course that should raise your aptitude in a field which you hope will reward you financially.
Your location on the planet is where an educated, capitalist mindset forms. To know your regions strengths and the industry most likely to hire you at a good rate is part of your further education selection process.
Poking in a little further, one can recognise the different industries in the region and what is the most stable employment option.
If you are living in the West i.e. America, UK and Europe, sectors in Information Technology, Computer Sciences, Financial markets, Electronic Engineering related subjects, Aeronautical Engineering, bio-technology, law, accountancy and other sciences are fairly good options to study .
Across the Middle East, a wise choice of study would be chemical engineering, petrochemical engineering, mechanical engineering, structural engineering, civil engineering and medicine.
In Asia a decent and stable choice of studies would be industrial engineering, financial, business studies, administrations, economics, manufacturing engineering, design engineering and any other subject related to mass production and distribution.
This is a rough guide and is subject to change with the changes in the industry and improvements in technology and peoples demands.
However what if you are from Africa, or an impoverished region in the Asia or South Americas. Firstly, education prospects that provide accredited courses are limited, secondly, the economic activity within your location is limited certainly from a computer sciences and technological perspective. So the safest and most logical option is to embark on a generic form of engineering (civil, electrical, mechanical) and the most popular amongst impoverished parents being medicine, a stable and steady profession with continual demand.
As technology develops skills sets change. In Sudan, the vast acres of agricultural land that had employed hundreds of workers, plowing the soil and spreading the seed, now requires a single tractor and a correct rear attachment to either plow or seed the field.
The education required for a farmer position has changed from labour skills to driving tractors skills with some knowledge in mechanical works. As tractors across the agricultural fields replace hundreds of thousands of labourers, unemployment figures rise.
In 2018, the IMF recommended that Sudan float its currency in order to strengthen its economic position and enable the repayment of loans.
The African nation like many others was recipient of a $6 billion loan in 2011 which is currently under close scrutiny and in 2018 total debt has swelled to around $56.5 billion.
Previously Sudan benefitted from the oil reserves in the South but since the 2011 split, the country has lost 75% of its annual income and has focused its resources on agricultural production. Now the nation maintains an economy centered around the export of agricultural products such as wheat, rice, grain, barley, Arabic gum and other staple items
“Fiscal policy should be tightened to eliminate the monetization of deficits, thus helping to reduce inflation and buttress macroeconomic stability,” stated the IMF.
What this means is that currency is de-valuated to allow for greater exports.
In Dec 2017 the dollar was 27 SDG, today (October 2018) the dollar is hovering at around 50 SDG and is set to increase. From an IMF and Governmental perspective devaluation is good to increase exports and productivity, but for the local inhabitant this means an exhortionate rise in the costs of goods, foods and living expenses.
Furthermore, as we see an increase in the cost of living, including a rise in the house prices, rent rates, car ownership and wages not rising proportionately, an entire sector of people classified as middle income (i.e. owned two cars and a home and could afford to send their children to university) slowly fading into the lower income groups.
Since inflation began these same group of people have sold of their cars, struggle to meet rent and electricity payments consequently moving to cheaper areas on the suburbs, and those who could previously afford to pay university tuition fees now have to work another job in order to support their studies.
Not only are the middle-class declining into the lower income group but lower income families are also affected, and gradually recede into homelessness and poverty .
The recipe of cash injection, privatisation and currency manipulation to “balance the government budget“ has impacts the society directly and the financial sector is to blame for being unable to take control of the welfare of the middle and lower income class peoples.
In addition, improvements in technology and AI to improve production, output and export- something the IMF economist encourage as a solution to pay back loans — is adding to unemployment rates.
As businesses struggle to pay for increase costs of supplies and distribution, cost cutting measures of decreasing workforce take its toll on employment figures adding to the state of impoverishment.
When see on the news fully abled men, packed into small boats stranded in the Mediterranean between the Africa and Europe, risking their lives to enter into new lands of hope, we are looking at a manifestation of economic policy gone wrong.
What can be done to reverse the migration crises and maintain a balance of stability for both European and African states.
Double Body Slam
African government economists should firstly identify the middle and low income categories (this should be a relative exercise (i.e. do not compare to OECD countries) and should understand and draw out the threats and weaknesses that future inflation will bring to families incomes and work.
With the lower pyramidal base of the population identified, a welfare program should be implemented to ensure that foods, rent rates and education remain untouched. This is to ensure that people do not go hungry, homeless and uneducated. These are fundamental facets of any civil society and need to be maintained in order to maintain law and order.
This protection of the middle and low income groups cannot be solved with cash injections, as the aid and other cash incentives that manage to excape the pockets of few ends up losing its value with the rest of the currency.
Food stamps, tokens for the electricity payments and low income housing for families re sufficient to stop a low income person from begging on the streets
There is no magic wand to keep employment figures at bay. Technology in regions such as Sudan is not advanced enough to have a significant impact on unemployment.
“Unlike Silicon Valley where new companies such as Facebook can hire one technician for every 20,000 computers…”
Unlike Silicon Valley where new companies such as Facebook can hire one technician for every 20,000 computers, nations in Africa have not developed such capacity and so African workers losing their position due to super intelligent artificial intelligence is a far cry.
If anything an increase in digital and technological devices will help with the demand of new products. The import of items such as i-phones, Samsungs and others create demand for accessories that such as chargers, adapters, ear-phones and other accessories that can be made and sold locally.
With the rise of inflation and Sudanese pound losing its value, authorities are required to step in and ensure the capitalist process of private ownership of production, distribution and exchange are not handed down on a silver platter to an international conglomerate or a local enterprise that already has a monopoly on a vast array of products and services.
Small and medium businesses, something American Presidents often mention and refer to as SME’s during campaign rallies are actually a very important organ of the functioning economy. Ensuring that SME’s are not wiped of the face of the Earth due to a inflation should be priority on the authorities priority list.
“The free market cannot be legislated.”
Legislating the free market will be like undoing the laws of gravity and motion, buying and selling, supply and demand, however what can be done is to create incentives for large businesses and procurement divisions within government institutions to provide opportunities and support for smaller businesses in terms of supplies and orders.
More often then not, international conglomerates are the only entities capable of completing projects due to the man-power, technical expertise or assets required to undertake a significant project.
African public officials tend to dispatched contracts blindly based on these factors.
For example, ensuring that water pumps for public projects are procured from the local distributors is a way of maintaining economic activity by encouraging pump storage and assembly on a local level.
However a method to ensure that large contracts are not given away entirely to overseas players who for reasons of productivity and profits would prefer to operate in a vacuum, would be obliged to partner with local companies by law. Whether it be in the fields of construction, mineral extraction, consultancy or agriculture ensuring local content is stipulated in the procurement process is of fundamental value in keeping an educated and esteemed workforce.
“Ensuring local content is stipulated in the procurement process is of fundamental value in keeping an educated and esteemed workforce.”
Other strategies, to distribute small chunks of land to allow local farmers to provide community cooperative fruits and vegetables for locals on the poverty line are also effective in eradicating poverty.
Working in Inflation
So how does a country operate when facing hyper-inflation.
Well it is difficult to predict anything. The winds of fortune are operating against 95% of the workforce and the population.
People always look for a way out, to work abroad and send money back home. Unfortunately over time this leads to a phenomena called the “brain drain”, in which bright and intelligent minds travel overseas and take their knowledge and financial strength with them. A famous saying in Sudan is that if you have money “you build a restaurant or a hospital”.
What this really means is that if you have resources and bright mind your prospects of success lay within these two fields only. Any entrepreneurial spirit to delve into the technological landscape is quickly eradicated and there is a general sense of discernment and discomfort to new technology.
That is not to say people do not try, but it is frowned upon. Had Mark Zukerburg or any of the founders of Twitter, Whatsapp and and other successful social start-ups began in Sudan, they would of had their ideas quickly shot down for the following reasons :-
there would have been no finance to support them
the discomfort to new technology and communication would make it impossible for people to use it
the continuous cutting of electricity during peak times would have caused them to lose enough work and data for them to eventually give up mid-project
Online payments do not exist and the majority of the working population do not have a bank account to make card payments and such.
Innovation in the west cherished, funded and publicised a attitude to African innovators in which unless the product is absolutely necessary, life saving or can lead to phenomenal cost saving– is very unlikely to be looked at twice.
“Inflation makes it hard for people to plan and predict prices of items a week ahead.”
My friend runs a small construction company that builds villas and medium sized apartments. The majority of his clients live and work overseas making their earnings in dollars which gives them a layer of protection from the currency inflation. However as the price of construction materials soar locally, local clients who work and earn their money in Sudanese pounds often dry up in cash causing a stall in construction and half completed projects. This can be seen across the construction industry with many uncompleted projects and towers scattering the landscape.
Inflation is taking its toll.
I personally do not see a return to normalcy in the region and predict a spiralling out of control Sudanese pound and budget deficit that cannot be closed unless some serious economic regeneration implemented.
I predict the bankrupting of the government and either a public revolt, government shake up — which have already occurred twice in the last year — or something else in similar magnitude that will bring the demise of the Sudanese pound.
Sudanese living outside of Sudan and sending money back into their homeland are underestimated by government economists into the extent they support families, food, schooling and transportation. Families working overseas can provide significant relief to there families and kinship during such economic turmoil.
Sudans neighbouring countries, Egypt, Ethiopia and South Sudan are all tinkering on economic instability and face a local currency that is likely to spiral out of control at any given moment.
There are no other forms of currency that can stop what is happening to the Sudanese pound. Blockchain technology, a digital currency which Venezuela has attempted to implement as a consequence of its own hyper inflation has been unsuccessful in persuading its population to use it.
Sudan also does not have the infrastructure to implement such technologically advanced programs, nor will the population bear patience attempting to understand the wirings of such a development.
Living in Sudan for over two years during the most economically unstable period has shown me the affects of such economic policy I would have envisaged or learnt throughout my education.
I have witnessed high and middle income families slip into pangs of poverty needing assistance for basic foods, rents and medicine. I have seen university educated males with bachelors and masters from recognised institutions in fields such as engineering and medicine driving taxis and tucs-tucs for a living.
I have spoken to professors with Phd qualifications who are well under the age of retirement, driving amjads (a six seater taxi) as it more financially rewarding then teaching.
There is a mistrust in the education system and the promises of a better life after one has graduated. After all, one could have started his driving career at the age of 16 without having to waste 7 years of paid education, late nights at the library and stress of handing in dissertations, examinations and other course work.
“Employment thus becomes a lottery that may or may not improve your fortunes.”
It is safe to say that the nation of Sudan is in a period of depression, the policies that are implemented to climb out of it are varied and mostly intangible.
Khartoum – With a distinctive participation of geologists, engineers and minerals experts, students, the workshop on opportunities of exploiting Basalan Cement in Sudan convened yesterday 9th October 2018 at Sharjah Hall University of Khartoum.
It is organized by the Sudanese Minerals Resources Company SMRC – Ministry of Oil, Gas and Minerals, in collaboration with the Sudanese Engineering Society.
Consultant Geologist Azhari Abdulgadir Abdallah, Minister of oil, gas and minerals called for concern with the scientific researches and studies, and to apply the outcomes of these researches.
He said that the workshop is timely and he pointed to the importance of the Basalan Cement and its benefits to Sudan. He explained that his ministry support to such scientific project with specific timetable and cost to implement as soon as possible. He appreciated the efforts of the SMRC; he suggested looking seriously to all researches related to the development of building in Sudan.
Meanwhile, Dr. Mohamed Abu Fatima Abdallah General Director of the Geological Researches Authority Sudan (GRAS); addressed the workshop and shed light on the huge and multiple mineral resources. He pointed to that there are more than 40 minerals are explored in Sudan.
Dr. Abu Fatima added that Sudan is characterized by its diversity in different types of minerals that assist in developing minerals industry in Sudan. He considered it one of the pillars of development. He stressed on the strong will, capacity building in setting the mining policies.
He briefed on the importance of agricultural and industrial minerals and to exploit it scientifically to play a major role in increasing export and to provide the needs of the local market. He called for doubling efforts, setting of strategies to develop the additional value, enhancing the competitive environment.
Engineer Mujahid Al-Ballal, the General Director of the Sudanese Minerals Resources explained the objective of organizing this workshop is to increase demand for Cement industry. He pointed to the available minerals in Sudan and the available opportunities to develop this industry. He noted that other countries worldwide are used the Basalan Cement and preceded Sudan and pointed to its importance in Cement Industry.
Many scientific working papers are presented including the geographical distribution of Basalan raw materials in Sudan. The second paper is the characteristics of Basalan and Portland Cement, the third one is on opportunities and challenges of using Basalan (Cement factory experiments ), the fourth paper discussed the economic aspects of using Basalan in construction industry in Sudan.
10 Oct 2018. Khartoum- (Zuleikha / Shadia) National Prime Minister and Minister of Finance and Economic Planning Mutaz Musa attended at the Friendship Hall in Khartoum Monday the launching ceremony by Sudan Financial Services Company of gold investment bonds in the presence of ministers and Sudanese Businessmen Union besides financial companies.
Governor of the Central Bank of Sudan Dr. Mohamed Khair Al Zubair, addressing the launching ceremony of the bonds, affirmed that the door is open for all who want to invest in financing of gold, expressing optimism over the success of the gold bonds mechanism.
He indicated that establishment of gold bourse is responsibility of the financial markets authority, pointing out that it would start its work soon.
The Governor of the central bank pointed out that the fund would finance 24 tons of gold.
Director General of Sudan Financial Services Company Khamis Abu- Amir, on his part, said that the subscription in the fund would be open for individuals and companies, pointing out that the fund aim at purchasing gold and selling it to the central bank, expecting that it would realize profit returns starting from 25%.
He explained that the subscriptions to the fund would be presented during the period October 15-31, 2018, with a capital of SDG3 billion divided into 3000000 bonds at the value of SDG1000 each.