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WEEKLY NEWSLETTER
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Sudan
Index
Craftsman engaged in jewelry making, Omdurman
Courtesy Embassy of the Republic of Sudan, Washington
The development of modern manufacturing received little
direct encouragement in Sudan during the condominium period.
British economic policies were aimed basically at expanding the
production of primary products, mainly cotton, for export.
Imports and traditional handicraft industries met the basic needs
for manufactured goods. Indirectly, however, the vast Gezira
Scheme cotton-growing project induced the construction of
ginneries, of which more than twenty were in operation by the
early 1930s. A secondary development was the establishment of
several cottonseed oil-pressing mills. During World War II, small
import substitution industries arose, including those
manufacturing soap, carbonated drinks, and other consumer items.
These operations did not survive the competition from imports
after the war's end. Foreign private interests invested in a few
larger enterprises that included a meat-processing factory, a
cement plant, and a brewery, all opened between 1949 and 1952.
At independence the Sudanese government supported an
industrial development policy to be effected through the private
sector. To facilitate this process, Khartoum adopted the Approved
Enterprises (Concessions) Act of 1956, to encourage private
Sudanese and foreign investment. The act placed few restrictions
on foreign equity holdings. By 1961, however, the government had
concluded that the private sector lacked interest or funds to
establish enterprises important to the national economy, and so
it entered the manufacturing field. The first government project
was a tannery opened that year, and this was followed in 1962 by
a sugar factory. In 1962 Khartoum formed the Industrial
Development Corporation (IDC) to manage government plants. During
the decade, several additional government enterprises were built,
including a second sugar factory, two fruit and vegetable
canneries, a date-processing plant, an onion-dehydrating plant, a
milk-processing plant, and a cardboard factory. During this time,
the private sector also made substantial investment, which
resulted in factories making textiles and knitwear, shoes, soap,
soft drinks, and flour. Other private enterprises included
printing facilities and additional oil-pressing mills. Among the
largest private undertakings was the foreign-financed and
foreign-built oil refinery at Port Sudan, which opened in 1964.
Well over half the private sector investment during the decade
came from foreign sources.
Government participation in the manufacturing sector
increased dramatically after the 1969 military coup and the
adoption of a policy aimed at placing the country's economic
development in government hands, although private ownership
continued. During 1970 and 1971 Khartoum nationalized more than
thirty private enterprises. In 1972, however, to counter the drop
in foreign private investment that followed, Nimeiri announced
that private capital would again be accorded favorable treatment,
and the government passed the Development and Promotion of
Industrial Investment Act of 1972, containing even more liberal
provisions than precoup legislation.
As the economy remained dependent on private capital, as well
as capital investment from developed nations, the government
incorporated further incentives for the favorable treatment of
such capital in a 1974 revision of the industrial investment act,
and added provisions against arbitrary nationalization. Moreover,
in 1972 Khartoum denationalized some enterprises nationalized
earlier, and returned them to their former owners under an
arrangement for joint government-private ownership. One of the
largest of these enterprises was the Bata Shoe Company, which was
returned in 1978 as a reorganized joint company in which Bata
held a 51 percent interest and the government 49 percent. The
most successful such enterprise, however, was the Bittar Group,
which in 1990 had become the largest undertaking in Sudan. Begun
in the 1920s, nationalized in 1969 but returned to its owners in
1973, it has diversified into products ranging from exports of
vegetable oils to imports of wheat, sugar, and insecticides. The
firm has been active in a wide range of projects involving
agriculture, electricity, and such industrial products as
household and office equipment, soap, and detergents.
Throughout the 1970s, the government continued to establish
new public enterprises, some state-owned, others in conjunction
with private interests, and some having foreign government
participation, especially by the Arab oil-producing states. The
new plants included three sugar factories, among which was the
Kinanah sugar-milling and refining factory; two tanneries; a
flour mill; and more than twenty textile plants. A joint venture
with United States interests built Sudan's first fertilizer plant
south of Khartoum, which was in operation by 1986. Private
investment continued, particularly in textiles. About 300 million
meters of cloth were produced annually in the 1970s, but output
fell to 50 million meters in 1985. In 1988, the textile industry
functioned at about 25 percent of capacity. The latter figure
reflected the effects of the civil war, the dearth of hard
currency for spare parts to maintain machinery, and the debt
crisis.
Since independence Sudan's modern manufacturing establishment
has emphasized the processing of agricultural products and import
substitution. The production of foodstuffs, beverages, and
clothing has accounted for a large part of total output.
Significant import substitution industries included cement,
chemicals, and dry battery manufacture; glass-bottle-making;
petroleum refining; and fertilizer production. In the late 1980s,
estimates of the contribution of modern manufacturing to GDP
varied from about 7 to 8 percent a year, including mining
(compared to about 2 percent in 1956). Employment in the sector
had risen during that period from possibly 9,000 in 1956 to
185,000 in 1977, including wage earners in government
enterprises. Almost three-quarters of large-scale modern
manufacturing was located in Al Khartum, attracted by market
size, higher per capita income, better transportation and power
infrastructure, and access to financial and government services.
Total manufacturing output, however, had not met expectation
by the end of the 1970s and steadily declined in the 1980s.
Overall output in some subsectors had grown as new facilities
began operating, but the goal of self-sufficiency had generally
not been attained. Shortages of domestic and imported raw
materials, power failures, transportation delays, lack of spare
parts, and shortages of labor ranging from qualified managerial
staff and skilled workers to casual laborers had been drawbacks
to effective operations and increased output. Losses of skilled
labor and management to the Persian Gulf states have been
particularly debilitating. In the 1980s, many factories operated
below capacity--frequently at well under 50 percent of their
potential. In some instances, low production also was related to
poor project planning. For example, the government cannery at
Kuraymah in Ash Shamali was already constructed when scientists
found that the surrounding farming area could not produce the
quantity of crops the plant could process. The milk-processing
facility at Babanusah south of Khartoum had a similar record of
poor planning. Efforts to improve the transportation and power
infrastructure, whose deficiencies have been major contributors
to the manufacturing problems, and rehabilitation of existing
plants were among the basic goals of the 1977-82 Six-Year Plan of
Economic and Social Development
(see
Economic Development;
Foreign Aid
, this ch.). That plan was never effectively
implemented. Some progress has been reported, but in 1990 the
production problems faced earlier by manufacturing persisted.
Data as of June 1991
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