Economic Trends

Agriculture continues to be the most important sector of the economy. Since independence, agriculture has contributed about 60% of total production in the northern and central provinces, whereas industry accounted for 5% and services about 35%, but there is now a shift toward increased industrial production. Agriculture accounted for almost 39% of GDP in 2001, whereas industry and services had increased to 18% and 43% of GDP respectively. New products, including oil, have entered the production base. In agriculture, production of some traditional crops such as cotton and  Arabic gum have declined but with livestock has maintained its dominant position accounting for about half of GDP of the agricultural sector. At the same time, new crops such as vegetables and fruits are growing in importance.

As a result of dependence on agriculture, GDP growth figures have fluctuated wildly and there were a series of recessions in the 1980s and 1990s. Since 1993, however, growth has been steady, at 3-6% a year in real terms. Agriculture remains the dominant sector but the emergence of the oil sector has begun to shift the balance. In 1999, for example, the value of the manufacturing and mining sector grew by 30% in nominal terms (a 12% real rise) lifting its share of GDP to almost 10%, compared with 6.5% in 1994/95. On the demand side, private consumption is the dominant share of GDP, accounting for 85% of demand in 1999. Investment levels have also picked up over recent years, rising by 31% in 1998 and 16% in 1999, with much of this linked to the oil industry and power generation.

The monetization of the government’s budget deficit created severe inflationary pressures in the past and price rises averaged over 56% a year in 1995-99. In 1996 money supply growth reached 88%. This fell to 28% in 1999, and the fall was reflected in the sharp downward trend in inflation. Annual price increases fell from 133% in 1996 to 46% in 1997, when the structural adjustment process began, and to under 20% in 1998-99. The trend continued into 2000 with inflation falling to 10%. Sudan has benefited from lower import costs over the recent years, as average international non-oil commodity and manufactured goods and prices have fallen.