Investment Sector in the Post-War Era…Looming Opportunities

Sudanhorizon– Nazik Shamam

Sudan has lost a significant amount of financial resources that are used to feed its public treasury due to the ongoing war between the Sudanese army and the Rapid Support Forces (RSF) militia, which has lasted for nearly 17 months. As the war approaches a year and a half, the country’s investment sector faces many difficulties and obstacles, preventing it from contributing to the public treasury and achieving economic stability. This is in addition to the impact on the labour market, which could have alleviated unemployment.
In the early months of the war, several investment institutions announced the suspension of their projects and the layoff of employees until further notice after the war destroyed infrastructure, factories, and facilities in the affected states. As a result, investment obstacles have emerged despite the Sudanese government’s continued efforts to attract both foreign and domestic investments to operate in safer states.
Some sources estimate the economic losses from the war at more than $100 billion, with 70% of economic activity in Sudan coming to a halt. According to unofficial estimates, the daily cost of the battles in Sudan is estimated at around half a billion dollars.
World Bank reports revealed a decrease in the economic growth rate to -18.3% for 2023. Additionally, Sudan’s gross domestic product (GDP) is expected to shrink by 151.1%, falling to $43.91 billion in 2023.
The war has severely devalued the Sudanese currency against the dollar, with the Sudanese pound losing more than 70% of its value. The dollar is now traded at over 2,600 Sudanese pounds, compared to 600 pounds before the war.
The war has also increased the unemployment rate in Sudan, rising from 32.14% in 2022 to 47.2% in 2024, according to International Monetary Fund (IMF) statistics.
Inflation has also surged, with IMF data showing that in Sudan, it rose to 256.17%, representing an increase of 117.4%. Additionally, the export movement has declined by over 60%.
Acting Minister of Investment and International Cooperation, Ahlam Mehdi Sabil, acknowledged the negative impact the war has had on the country since the Rapid Support Forces militia rebelled against state leadership, complicating national interests with the regional interests of external powers.
Sudan has suffered massive destruction to its infrastructure, factories, and institutions, especially in the capital and some states. In a conversation with Sudanhorizon news site, Minister of Investment and International Cooperation Ahlam Mehdi Sabil emphasized that investment, like other vital economic sectors, has been impacted by the war in its three main areas: agriculture, industry, and services. Projects in Khartoum state, in particular, have been affected by destruction, lack of funding, and the shortage of production inputs and transportation means.
The minister revealed that the Ministry of Investment and International Cooperation has developed plans to align with the post-war phase, noting that the investment sector remains promising. She highlighted the ministry’s participation in various forums to sign new investment agreements and reactivate and revive previous agreements.
She stated, “We are moving forward in attracting more qualitative investment partnerships that will push the economy forward and rebuild what the war has destroyed. Our promotional efforts have focused on infrastructure projects in various fields, such as renewable energy, electricity, roads, bridges, railways, and others.”
Despite the war, the minister emphasized that the ministry continues to receive investment applications, and no investments have been cancelled thus far. Investment is proceeding as planned. She noted that the Sudanese government actively seeks to attract numerous investments, especially after offering several incentives, guarantees, and privileges that will undoubtedly attract many investors.
She explained that the war served as a greater motivation, rather than a deterrent, for attracting more national and foreign investments.
Economic expert Dr Waleed Daleel believes that the experience of post-war economic reconstruction depends on each country’s unique circumstances and the extent of the destruction inflicted on the economy. In Sudan’s case, he considers the damage substantial, given the fragile state of the Sudanese economy before the war and the many social and political problems surrounding the scene before the conflict broke out.
Daleel pointed out some general aspects that could be part of this experience, including the need for a realistic reconstruction plan that takes into account Sudan’s economic conditions and the regional and international circumstances surrounding it. He emphasized the importance of utilizing available resources to make the reconstruction plan successful.
In his conversation with Sudanhorizon news site, Daleel said, “to ensure the effectiveness of the plan, it is essential to focus on key economic sectors that can directly contribute to redevelopment. Priority should be given to reconstructing infrastructure by contracting with international companies to construct and reconstruct roads, bridges, airports, and ports destroyed by the war, using contracts based on the ‘build-operate-transfer’ (BOT) model.”
He added, “To ensure that global companies agree to such contracts, trust between these companies and wise leadership must be established. This can be achieved by attracting professional cadres to form a future government with a special composition, ensuring that it is a transitional government that helps matters progress in various economic, social, and political areas. Such a government should enjoy broad national and societal consensus.”
Daleel stressed the need for the reconstruction plan to enhance job opportunities and political stability and provide necessary support to small and medium-sized enterprises, which are the main drivers of Sudan’s economy. He noted that the reconstruction experience requires solid local leadership, joint efforts from all concerned parties, and rebuilding destroyed infrastructure. It also necessitates restructuring local and foreign debts under favourable, non-burdensome conditions and undertaking many economic and political reforms. Additionally, international cooperation should be strengthened. Sudan should move away from regional bloc politics, focusing instead on economic and social development while ensuring the country’s political independence from divisive policies.
Daleel emphasized that Sudan has the potential to become a significant economic hub due to its promising economic sectors. Agriculture is a major sector, contributing to job creation, food security, and the provision of essential goods, which are critical for economic, social, and political stability. The mining sector also plays an important role in investment opportunities, contributing to revenue diversification. Sudan is rich in mineral resources such as gold, chrome, and iron, alongside other sectors like trade, which can play a central role in reconstruction due to Sudan’s strategic location as a crossroads between the south and north of the continent and as a significant waterway for Asia.
Daleel also highlighted the role the land, sea, and air transport sectors could play in development if investments are wisely directed toward them. Additionally, Sudan could become a tourist destination thanks to its mild climate and numerous ancient and neglected archaeological sites. Other sectors, such as financial services, technology, and military industries, could also contribute. If these sectors are effectively developed, Sudan could achieve more significant economic growth and improve its citizens’ living standards.