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Quick Facts
- Population:
- GDP (PPP):
- $89.0 billion
- -3.9% growth
- 3.5% 5-year compound annual growth
- $2,726 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
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Sudan’s economic freedom is not graded because of 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 was in 2000, when it received a score of 47.2.
Political instability and prolonged lawlessness have wracked Sudan and ruined the country’s prospects for long-term investment and economic development. Although the small services sector has been marginally expanding, the large informal economy continues to be an important source of production and employment in the fragile economy.
Despite the political settlement that established a new breakaway Republic of Sudan in July 2011, security and political uncertainty remain formidable challenges. The rule of law continues to be fragile and uneven. The inability to deliver even basic services on a reliable basis, often exacerbated by systemic corruption, has severely eroded confidence in the government.
Background
In April 2010, President Omar Hassan al-Bashir, who came to power in a 1989 military coup, won Sudan’s first multi-party elections in 24 years. International observers criticized the elections for polling and vote-counting irregularities. The International Criminal Court indicted Bashir in 2009 for war crimes and crimes against humanity in Darfur, where more than 2 million people have been displaced and more than 200,000 have been killed. In July 2011, southern Sudan became the independent Republic of Sudan. Cross-border violence related to citizenship status, borders, and oil rights threatens a return to war. The border areas of Abyei and South Kordofan also pose challenges. Political instability, poor infrastructure, weak property rights, and corruption hinder development, and exports other than oil are largely stagnant. Sudan has lost two-thirds of its oil revenue to the South.
The rule of law remains fragile and uneven across the country, especially after the secession of South Sudan. There is little respect for private property, and the legal framework is severely hampered by years of political conflict. The government influences the judiciary, and the military and civil authorities do not follow due process to protect private property. Corruption is widespread.
The top income tax rate is 10 percent, and the top corporate tax rate is 35 percent. The government remains highly dependent on the oil sector, and overall tax revenue equals 6.5 percent of total domestic income. Government spending is below 20 percent of total domestic output, but public debt exceeds 70 percent of GDP. Violence in the border regions with South Sudan and the failure to negotiate an oil revenue–sharing agreement affect the fiscal climate.
Inconsistent enforcement of regulations and other institutional shortcomings often impede business activity and undermine economic development. Launching a business takes more than 30 days, and completing licensing requirements costs over twice the level of average annual income. The labor market remains underdeveloped, and much of the labor force is employed in the informal sector. Monetary stability has been severely undermined.
The trade-weighted average tariff rate is relatively high at 14.8 percent, and non-tariff barriers further constrain trade freedom. Political instability, coupled with an outmoded regulatory environment and inadequate infrastructure, significantly deters private investment. A large portion of the population remains outside of the formal banking sector, and access to credit remains limited.