Sudan: Economy stiffened amidst conflicts-analysis

(SomaliNet) There are many positive developments taking place in the economy of Sudan, but, whenever the name of the country is mentioned, one will unconsciously recall the humanitarian crisis in Darfur and row over Southern peace deal.

Unfortunately, the negative image of the country is overshadowing the positive economic gains.

Sudan started the liberalisation of its economy in February 1992. The economic policies pursued led, at the beginning to social and economic problems in the 1990s, the most important of which were widespread unemployment, high rates of inflation and deterioration of the income of the middle class.

But, gradually the country started to reap the benefits of these policies through the macroeconomic stability that was achieved. The economy grew by an average of six per cent annually in the period 1990-2001, inflation rate was reduced to one-digit, and the exchange rate of the Sudanese Dinnar against foreign currencies stabilised.

Macroeconomic stability and sound economic policies paved the way for attracting the badly-needed foreign investment.

The energy sector received the lion’s share from foreign investments. As a result, Sudan began to export oil for the first time in its history in August 1999.

In an acknowledgement of the country’s oil potential, the Organization of oil Exporting Countries (OPEC) granted Sudan an observer status in 2001.

Now the country produces around 500,000 barrels per day and is third in sub-Sahara Africa after Nigeria and Angola and plans to be producing one million barrels per day of crude oil by the end of 2008.

As a result of these developments in the oil sector, the country attracted even more investments and the government was able to engage in an ambitious development programme.

The government started the construction of Merwe Dam, a hydropower project that will produce 1,250 megawatts of electricity. It is supposed to be commissioned by the end of next year.

The country’s Growth Domestic product grew from $14.9 billion in 2002 to $37.4 billion in 2006. –Nation