With its large size and varied climatic zones stretching from the lush vegetation of the equatorial south to the arid deserts of the north, Sudan is endowed with huge natural as well as human resources as follows:
1. Extensive stretches of cultivable land estimated at 200 million fertile feddans.
2. A huge livestock wealth, among the top largest in Africa and estimated to be over 116 million head of camels, cattle, sheep and goats. There are also more than 200 million feddans of forest, bushes and natural pastureland.
3. Great water-supply reserves in forms of rain waters, rivers, surface and underground water reservoirs.
4. Huge deposits of mineral wealth which have not yet been fully explored, exploited or utilized, such as gold, silver, chromium, asbestos, manganese, gypsum, mica, iron, lead, uranium, zinc, copper, cobalt, granite, marble, in addition to petroleum and natural gas.
5. Sudan is now an oil-producing country. The first shipment of Sudanese oil sailed to the international market on 30th August, 1999. Investment in the oil and energy sectors is a top priority in the country.
6. In Sudan, there is a surfeit of qualified manpower in the agricultural, industrial and economic services sectors. There are specialized research centres in food industries, leather and tanneries, weaving industry, oceanography and marine science, administrative sciences besides numerous institutes for banking, accountancy and computer studies, constituting a solid basis for successful interaction with the latest developments in science and technology.
Present Investment Climate in Sudan
The government is making serious efforts to create conditions to attract foreign investment to Sudan. Some of the important steps taken by it in this direction are as follows:
1. A three-year economic salvation programme (1990-1993) was formulated whereby several reforms were introduced, including abrogation of state monopoly of agricultural and industrial products, the economic services sector and marketing. The state has also withdrawn from some public sector corporations and institutions.
2. Radical changes in Investment Acts and Laws that regulated all economic activities has lifted all the curbs on private sector participation.
3. Economic, trade and financial policies supportive of the country's move towards a market-driven economy have also been adopted. These include:
i) Lifting of major consumer-goods subsidies.
ii) Freeing the Sudanese Dinar vis-a-vis other international currencies.
iii) Removing control on the prices of agricultural and industrial commodities to provide incentives to producers and encourage growth.
iv) Abrogation of the former import license system, except with the defrayal and preferential trade countries.
v) Abrogation of the mandatory declaration of hard currencies carried by travellers, who are now allowed to carry any amount of hard currencies in whatever form.
vi) Lifting of all restrictions on the movement of hard currency accounts. Now the client is allowed to feed such accounts by all possible methods of payment.
4. Promulgation of a new Investment Encouragement Act, 2000, the older 1990 Act and the ammended one of 1988.
The Investment Act consolidates the legal base for investment and while aiming at promoting and encouraging investment activities, endeavours to ease, unify and simplify procedures for foreign investors.
Salient Features of the Investment Encouragement Act, 1999
1. The Act encourages investment in the following sectors: agricultural (animal and crop), industrial, energy, mining, transport, warehousing, tourism, marine resources, information technology, health, education, electricity, roads, ports, water, communication, environment, storage, housing, contracting, basic infrastructure, economic services, etc.
2. It encourages investment in projects that endeavour to evolve alternatives for the country's main imports and projects that depend, to a large extent, on local raw materials for their inputs.
3. It grants the following incentives to investors:
i) Exemption from business profit taxes for not less than 10 years effective from the year that follows commercial production or commencement of activities.
ii) Total exemption from taxes and custom duties, and any other fees, as may be levied on imports during the period of exemption of the project.
iii) Total or partial exemption from customs and excise or any other duties pertaining to imports related to the project's requirements.
iv) Production and consumption tax cuts.
v) Foreign capital investors may transfer their profits and initial financing costs or debts provided that all the legally binding commitments pertaining to the project are met and settled. The transfer shall be in the original currency or currencies the capital was transacted in.
vi) Import of raw materials for project in whatever quantities without being restricted by the procedures of importers/ exporters registrars.
vii) Freedom of movement, residence or transfer of the project's expatriate employees is guaranteed in accordance with the prevailing laws.
4. Some of the most significant guarantees of the investment Act are:
i) The investor's project shall not be liable to nationalization or confiscation, whether totally or partially.
ii) The project's funds shall not be distrained, seized, freezed, confiscated, provisionally seized or sequestrated.
iii) Remittance of invested capital in its currency or currencies of origin in case the project has not started, or in case the project got liquidated or disposed off wholly or partially, provided that all legally binding commitments are met.
iv) Sudan is one of the signatories to several international and regional bodies concerned with investment disputes. The Act also stipulates ways and means and procedures for the settlement of any legal dispute that might arise.
5. Projects shall be granted licenses and/or privileges, facilities, guarantees as set in the Act, unless after submission of a technical and economic feasibility study of the project and a preliminary approval is obtained.
The Investment Authority
The Ministry of Investment has been established as the ministry responsible for setting up, advertising and publicizing for investments in Sudan.
It is also responsible for the creation of an ideal investment climate that attracts national and foreign capital in Sudan and removal of all obstacles to capital inflows. It is the body that draws encouraging investment policies, simplifies procedures for investors, issues licenses of investment projects and the relevant facilities and guarantees, follows up the actual execution of the proposed projects, prepares investment maps and saves the investors the trouble of data collecting by providing them with all the necessary information and data. The ministry shall also follow up all procedures of the investment licensing with relevant government circles on behalf of the investor.
The Investment Ministry enjoys close relations with local, regional and international corporations and organizations concerned with investment such as the Arab Organization for Investment Guarantee, the International Investment Guarantee Agency, the United Nations Industrial Development Organization (UNIDO) and other regional and international grouping and institutions of which Sudan is a part.
Some of the major economic policies pertain to freeing the Sudanese economy from bureaucratic control and ensure let it be a market-driven entity. Besides, more open policies towards the private sector are recommended and implemented.
Under the aforesaid guidelines, the state monopoly over agriculture, industry, economic services, internal and external marketing sectors have already been abrogated, and the government has actually begun to pull out from many public sector corporations, establishments and companies operating in these fields.
The government has made radical amendments in all acts and lifted restrictions on investments and economic activities so as to encourage greater private sector participation in all sectors.
The government has also placed some state assets and public sector companies on the block for sale, partnership or transfer. Some of these units operate in the agricultural and industrial sectors (spinning and weaving, ready-made clothes, food industries and tanneries), others are in the services sector (hotel keeping, transportation, communication and telecommunication services) and some are trading and marketing corporations.
Certain guidelines are strictly observed throughout the privatization processes such as competitive bidding, prior publicity for sale, transparency so as to ensure justice and fair play.
Licensing and Facilitation Procedures for Investment:
1. The investor shall submit an economic "feasibility study of the project.
2. The investor shall file applications for licensing, privileges or facilities for an investment project against payment of prescribed fees. The form shall be issued by the investor's services section in the ministry.
3. The Investment Ministry shall review the application form and consult the competent technical organs if necessary.
4. Upon receipt of the provisional approval from the Ministry of Investment regarding the particular project, the investor shall then register a business name or company whose activities shall be limited to its specific field of licensing only.
5. Upon approval of the business name of company, the investor shall submit all the relevant documents to the Ministry in order to obtain the license covering the facilities granted and location of the plot where the premises of the project in question shall be sited.
6. Upon completion of all licensing procedures and issuance of the license, the investor may then import the project's requirements in accordance with "an itemized requisition list" which the Ministry must consent to in advance.
7. The Ministry shall then contact the customs authorities upon clearance of the project's imported items through the custom's co-ordinator in the Ministry.
8. The Ministry shall also contact the taxation authorities to exempt the project from tax duties in accordance with the granted privileges.
It is to be reiterated again that the Ministry follows up all procedures with the relevant government bodies on behalf of the investors.