Sudan sits at the crossroads of Sub-Saharan Africa and the Middle
For most of its independent history, the country has been beset by conflict. Under the terms of a peace agreement in 2005, its southern states seceded, forming the Republic of South Sudan in 2011.
The secession of South Sudan induced multiple economic shocks. The most important and immediate shock was the loss of the oil revenue that accounted for more than half of Sudan’s government revenue and 95% of its exports. This has reduced economic
In 2013, the outbreak of civil war in South Sudan damaged both economies depriving Sudan of
Following the global oil price slump in 2015/2016, Sudan and South Sudan agreed to lower oil transit fees for South Sudanese oil via Sudan’s pipeline, as it became uneconomic to export it. In December 2016, they extended their 2012 agreement on oil for three years on the same terms, with the exception of provisions for the adjustment of transit fees in line with global oil prices.
Armed conflict in Sudan’s westernmost region of Darfur has subsided but many parts of the region remain precarious because of the proliferation of arms and banditry. Efforts to settle another conflict in South Kordofan and
Comprehensive U.S. sanctions on Sudan, levied in 1997 and expanded in 2006, were lifted in October 2017. This generated initial optimism, but foreign investors and commercial banks have been reluctant to reengage. Trade and financial transactions between Sudan and the World economy remain very limited as Sudan continues to be designated by the U.S. as a state sponsor of terrorism, preventing full normalization of relations with the U.S. While there was optimism late 2018 that talks to remove the designation are expected to begin soon, the protests that escalated in December 2018 might have hampered progress on the talks.
Last Updated: Apr 02, 2019