Economic performance
Higher oil and non-oil revenues have turned the overall fiscal balance into a surplus in 2003 and 2004, despite higher spending. Total fiscal revenues reached 21,5% of GDP in 2004 compared to 16,8% in 2003. Non-oil revenues rose from 8% of GDP in 2003 to 10,4% in 2004, largely because of improved efficiency from the new taxpayer unit, a reduction on exemptions and a telecom license fee. Oil revenues continued to increase in 2004 mainly because of higher production and prices, a-which allowed 1,6% of GDP accumulation in the oil savings account.
Sudan embarked on a number of policy and institutional reforms in recent years aimed at sustained economic growth, maintaining macroeconomic stability and meetings the challenges of the peace process. These policies have translated into a favourable economic performance, marked by a pickup in foreign investment, a strengthening of the external position and single-digit inflation. While oil production increased sharply, growth of the non-oil sector has also been strong, evidencing progress in diversifying the economy.

As a result of the economic program aimed at increased production and diversification of revenues, the share of the industrial sector in the GDP formation increased to reach 15% by the end of the 1990s and 21,4% at the beginning of 2000. The agricultural sector continues to occupy a leading role, contributing 46,6% to the GDP in 2000. The start of the oil industry and the first shipment of oil in 1999 totally transformed the shape of the country's trade relations. Sudan historically had a negative balance of trade, with imports more than double the export value. Oil exports in 2002 led to the first trade surplus and petroleum products now comprise 70% of the export value.
There are nevertheless still constraints to the development of exports. The agricultural sector continues to suffer from low productivity, high taxes, poor distribution and marketing in addition to a difficult climate. Agricultural exports mainly consist of primary products such as sesame, Gum Arabic, livestock, cotton, sorghum and sugar. The European Union remains a major trading partner but the start of oil exports explains the rise in importance of the Asian countries such as China and South Korea.

Economic prospects

Improved economic performance and international relations led to more investment flowing into the country, including US $ 3,5 billion in the oil sector. Industry, mining , agriculture and services do attract considerable investment as well and establishing a sound legal frame-work to promote investment has become one of the major features of the economic policy of Sudan. In 2000, the government amended the investment encouragement act to offer more concessions and opening the country to increased international cooperation. Successes so far were obtained in the sectors of oil and mining, telecommunications, textiles and the sugar industry.
In 2002, the Ministry of Industry announced a list of more than 400 investment projects for a cost of US$ 7 billion. A particular field of investment is the electricity sector, where private investment should lead to a tenfold increase in power generation. Investment priorities here include the construction of thermal power generation units, the realization of hydro-electric power plants and the development of the distribution grid. A long-term plan for the production of electricity was elaborated by a Canadian consultant under the auspice of the World Bank.
Along with the economic reforms Sudan has witnessed the emergence over the past years, of a growing number of large companies , belonging either to the private or the public sector. These companies are capable of giving a new impetus to the economic development. Best known examples are the industrial complex of GIAD, an affiliate company of the holding Sudan Master Technology and a leader in the field of automotive industry (representing an investment of US$ 500 million) and the Khartoum Refinery Company, a joint venture with Chinese Petroleum Company, standing for an investment of US$ 620 million.
Sudan Master Technology is a joint venture company between the private sector and the government and it has established a series of successful industrial ventures, including projects such as the Saria industrial complex which includes seven factories in the area of electronics and electrical appliances, car batteries, plastic products, cardboard, ready-made clothes and shoes.
GIAD is the biggest industrial complex in the country and is located at 40km from the capital Khartoum The zone is home to a steel factory and a rolling mill, an aluminum and copper plant and a plant producing electric wires and cables. The GIAD complex offers an excellent investment opportunity to both local and foreign investors, either by the acquisition of shares or by introducing new industrial ventures making full use of the available infrastructure.
Sudan's relations with the international community have also substantially improved, with the IMF commending the successful implementation of reform measures. The government started paying arrears and loan charges to funding institutions and resumed cooperation with the country's main donors, such as the Arab funds, IDB and the OPEC fund. The total debt toll is still a main hindrance to development but the country should be able to benefit from the international debt relief initiative. After years of isolations and problems, Sudan can thus look forward to a new period of change and development, wherein international cooperation and firm macroeconomic management are of vital importance.

The importance of agriculture in the Sudanese economy can not be over-estimated. More than 80% of the country's population are involved in agriculture and the sector's output accounts for one third of Sudan's GDP and an important part of exports. Sudan's huge agricultural potential, the continuous flow of investments into the sector and the government's efforts to introduce rules leading to a market-driven agriculture gave a new impetus to this sector which has become over the past years increasingly diversified and now offers a wide range of products for exports.

Basic Economic and Financial Indicators, 2001-2004

Source.: Sudanese authorities and International Monetary Fund