Sudan: Investing
According to UNCTAD’s 2021 World Investment Report, FDI inflows to Sudan decreased by 13% to USD 717 million in 2020 (compared to USD 825 billion in 2019), mainly due to the health economic crisis triggered by the Covid-19 pandemic. FDI stocks amounted to USD 29.2 billion in 2020. In 2021, global FDI flows rebounded strongly, but FDI flows to African countries (excluding South Africa) rose only moderately (UNCTAD’ Investment Trends Monitor). Political instability, foreign exchange shortages and expensive banking channels constrain FDI to the country, despite the lifting of sanctions by the United States. Of the transition countries in the Horn, Sudan’s FDI flows are the highest. Investments are mainly directed towards the hydrocarbons sector, business services and transport. China, Germany and Qatar are the country's largest investors (AfDB). Despite the military coup, investments are expected to continue in the oil, transport and agriculture sectors (Coface).
Until recently, the factors that encouraged FDI were tax exemptions given to foreign investors, easy repatriation of profits by foreign companies, the development of a financial market, limited state monopoly in various industrial sectors, the allocation of free land to foreign investors for strategic projects and the authorisation to transfer foreign capital if the investor decides to withdraw from the country. The country is strategically positioned between the Middle East and West Africa, and it benefits from a huge unexploited agricultural potential. However, these advantages are offset by the lack of a qualified workforce, insufficient infrastructure, weak rule of law, rigid labour markets, an inefficient regulatory regime, corruption and political instability. Sudan is ranked 171st out of 190 in the latest available Doing Business ranking published by the World Bank, down 9 places compared to the previous year. Sudan has decreased the reliability of the electricity supply, weakened access to credit and made resolving the insolvency more difficult. In August 2019, the companies China National Petroleum, Petronas (Malaysia) and ONGC Videsh (India) left the country, not receiving the dividends due by the government since 2011 (Coface).
| Sudan | Sub-Saharan Africa | United States | Germany | |
|---|---|---|---|---|
| Index of Transaction Transparency* | 3.0 | 5.5 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 1.0 | 3.5 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 6.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
| Foreign Direct Investment | 2019 | 2020 | 2021 |
|---|---|---|---|
| FDI Inward Flow (million USD) | 825 | 717 | 462 |
| FDI Stock (million USD) | 28,493.9 | 29,210.8 | 29,727.6 |
| Number of Greenfield Investments* | 2.0 | 2.0 | 5.0 |
| Value of Greenfield Investments (million USD) | 78 | 330 | 102 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Personal income tax | Progressive rates from 0 to 30% |
| Up to SDG 3,000 | 0% |
| SDG 3,000 to 6,000 | 5% |
| SDG 6,000 to 10,000 | 10% |
| SDG 10,000 and above | 30% |
| Sudan | Sub-Saharan Africa | United States | Germany | |
|---|---|---|---|---|
| Number of Payments of Taxes per Year | 42.0 | 36.6 | 10.6 | 9.0 |
| Time Taken For Administrative Formalities (Hours) | 180.0 | 284.8 | 175.0 | 218.0 |
| Total Share of Taxes (% of Profit) | 45.4 | 47.3 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
| Setting Up a Company | Sudan | Sub-Saharan Africa |
|---|---|---|
| Procedures (number) | 10.00 | 7.51 |
| Time (days) | 34.50 | 21.30 |
Source: Doing Business.
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Latest Update: February 2023
