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- GDP (PPP):
- $90.5 billion
- 3.4% growth
- 1.3% 5-year compound annual growth
- $2,631 per capita
- Inflation (CPI):
- FDI Inflow:
Sudan’s economic freedom remains unrated due to the lack of reliable data. Those facets of economic freedom for which data are available have been individually scored. The last time Sudan was fully graded and ranked was in the 2000 Index, when it received a score of 47.2.
Civil war, political conflict, and unrest have undermined the development of a stable society ready for sustained economic growth. Although the petroleum sector provides some economic stability and foreign exchange earnings, other parts of the economy are underdeveloped and face serious structural and institutional headwinds. Continued conflict with rebels and South Sudan promotes uncertainty and undermines investor confidence.
Further diversification of the economy is undermined by poor governance and inefficient regulations. A large informal economy remains trapped by business regulations that inhibit registration and a rigid labor market that discourages formal hiring. High tariffs discourage imports and protect domestic industry, while investment remains largely reserved for the hydrocarbon sector.
Omar Hassan al-Bashir, who came to power in a 1989 military coup and still rules the country, faces two international arrest warrants on charges of genocide in the conflict in Western Darfur, where over 2 million people were displaced and over 200,000 killed. In October 2013, 30 members of al-Bashir’s National Congress Party broke away and formed a new opposition party. Cross-border violence, political instability, poor infrastructure, weak property rights, and corruption hinder development. Export growth, other than with respect to oil, is largely stagnant, and 80 percent of the workforce is employed in agriculture. Following the secession of South Sudan in 2011, Sudan lost two-thirds of its oil revenue to the South. Subject to multiple comprehensive sanctions, Sudan has begun austerity measures to reduce government spending. Reports of an upsurge of violence in Darfur have raised concerns.
Sudan is considered one of the world’s most corrupt countries. Power and resources are concentrated in and around Khartoum, leaving outlying states impoverished. Members of the ruling party control the national economy and use their wealth to buy political support. There is little respect for private property, and the legal framework is severely hampered by years of political conflict.
Sudan’s top individual income tax rate is now 10 percent. The top corporate tax rate is 35 percent for the oil and gas sector. Other taxes include a value-added tax and a capital gains tax. The total tax burden is 5.7 percent of domestic income. Public expenditures are equivalent to 13.6 percent of domestic output, and public debt equals 91 percent of GDP.
Political instability, a poor regulatory environment, and inadequate infrastructure significantly deter business formation and operation. The labor market is dominated by the agricultural sector and informal hiring practices. Violent protests in September 2013 against dramatic cuts in fuel subsidies prompted the state to reduce some subsidies to investors to free more revenue for social services.
Sudan’s average tariff rate is 14.7 percent. International trade and investment flows are impeded by regional instability. The underdeveloped financial system is dominated by banks that practice Islamic banking, which prevents banks from charging interest. The government is heavily involved in the system, and the banking penetration rate is very low and uneven across the country.