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Saturday, 24 July 2021

Sudan: A promising investment destination

Sudanese Investment Minister Abdel-Hadi Ibrahim explains that Cairo and Khartoum have a lot of economic deals on the table to Al-Ahram Weekly

Ahmed Abdel-Hafez, Thursday 24 Jun 2021
A promising investment destination
Ibrahim
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The first forum for the heads of African investment-promotion agencies was held between 11 and 14 June in Egypt in partnership with ministries and investment agencies from 24 African countries. Prime among the forum’s participants was Sudanese Investment Minister Abdel-Hadi Ibrahim.

Sudan’s presence at the forum comes amid growing international warmth towards Egypt’s southern neighbour. Sudan has been welcomed back by the international community, and international donor agencies are studying investment opportunities in the country.

As a result, the Egyptian and international media focused particularly on Ibrahim’s statements during the four-day forum due to the huge potential for investment in Sudan that was displayed in Sharm El-Sheikh, the Red Sea resort city where the forum was being held.

In an interview with Al-Ahram Weekly, Ibrahim explained some of the investment opportunities his country offers, despite its still-fragile infrastructure. “Sudan has suffered from a lack of investment in infrastructure for 30 years, but this is the case for all African countries, not just Sudan,” Ibrahim said.

He added that one of the pillars of the current reforms to the economy was the adoption of short- and long-term plans to bridge the gap in infrastructure.

Sudan is confident that it can treat structural problems in its economy, starting with the exchange rate, the budget deficit, the trade balance, the current account, and inflation. Its readiness to treat these problems had already led to increased revenues from exports and the inflow of foreign investment, Ibrahim said.

Bridging the gap between exchange rates for the Sudanese pound had reflected positively on the economy, he said. “In previous years, the difference between the official and the unofficial price of the US dollar in Sudan was huge,” Ibrahim said, noting that at one point the official price of the US dollar was 55 Sudanese pounds, but it often changed hands on the black market for 260.

Shedding the country’s accumulated debts had freed the Sudanese economy from the shackles that were hindering efforts to integrate with the international economy, Ibrahim said. The fact that foreign countries had cancelled many of these debts had been an incentive to bring about more legislative reforms to attract foreign investors and encourage the private sector.

“Nations that have given their private sectors a leading role in the economy have been able to develop,” Ibrahim said, adding that “Sudan is currently looking into investment proposals from US, French, Canadian, and British companies.”

Meanwhile, the Sudanese government is focusing on infrastructure projects and is paying attention to road and electricity networks. Ibrahim said that during Sudanese Prime Minister Abdalla Hamdok’s visit to Egypt three months ago, Cairo had promised to raise the electrical linkage capacity with Sudan from 70 to 300 MW.

Egypt has already started the technical procedures required, seeing the change as part of a bigger plan to deliver 1,000 MW of electricity from Cairo to Khartoum in a year’s time, he added.

During the forum in Sharm El-Sheikh, a number of Egyptian and Sudanese companies held meetings, some of which focused on energy. They discussed the implementation of small-scale solar energy projects to generate between five and 15 MW to serve irrigation purposes.

They also tackled the implementation of some 40 or 50 projects to produce clean energy and alternatives for energy generated from dams to minimise the space needed for energy production. Producing 200 MW of solar power needs five square km of land, for example.

Reviewing the projects discussed at the forum, Ibrahim told the Weekly that “Sudan offered Egyptian investors stakes in 112 projects ready for investment in six different economic sectors, ranging from infrastructure and transportation to railways, air lines, agriculture, livestock, communications, digital transformation, energy, and mining.”

The total investment in these projects is estimated at billions of dollars, he said, adding that one of the agricultural projects alone needs some $6 billion in investment.

One advantage for Egypt is proximity, which is why the Sudanese government has tailored a set of preferential regulations for Egyptian investors, such as treating Sudanese nationals and Egyptian investors equally in granting them a three-year period to implement a project, exempting projects from taxes for the first three years of operation, and exempting capital goods from customs.

Egyptian investors will be given land at a nominal rent for usufruct rights, Ibrahim explained.

He said that a plan to cultivate 1.5 million feddans of land in Sudan could be a “strategic project” that required solid political will from both Egypt and Sudan. The area targeted for the project is located in the northeastern part of Sudan. If planted with wheat, the harvest would reduce or eliminate the two countries’ wheat imports, he said.

Egypt and Sudan import 15 and 2.5 million tons of wheat annually, respectively, Ibrahim stated. This amount could easily be covered by the project, which can produce between 18 and 20 million tons on an annual basis. 

Ibrahim attributed the current electricity crisis in Sudan to the Grand Ethiopian Renaissance Dam (GERD), which saw the first filling of its reservoir last summer and will undergo the second filling in July this year.

The GERD has resulted in a decrease in water flows from Sudanese reservoirs at Roseires, Meroe and Sennar, reducing the electricity produced from the Sudanese dams by 200 to 300 MW. This has exacerbated the power crisis in Sudan.

Sudan needs 3,200 MW of electricity annually, but it produces only 2,500 MW, Ibrahim noted, saying that things were starting to look better due to the rainfall in southern Sudan that has increased the water levels in the reservoirs of all three dams.

 

*A version of this article appears in print in the 24 June, 2021 edition of Al-Ahram Weekly

 

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