The resurgence of Sudan: From zero to…

Sudan’s capital Khartoum

Sudan has for long been the skunk in Africa. The International Criminal Court issued two arrest warrants against its president, Omar Al-Bashir: five counts of crimes against humanity, two counts of war crimes and three counts of genocide. Sudan was also involved, for all practical purposes, in a civil war in Darfur. In 2011, South Sudan voted to secede from Sudan. This was an economic disaster for Sudan as the rich oil fields were in South Sudan. The country has long been struggling, given amongst others, the economic sanctions the USA imposed against it.

According to Trading Economics, Sudan has the sixth-largest GDP in Africa, in spite of US and EU sanctions and embargoes. It has a population of approximately 40 million people. While it has a somewhat subdued GDP growth rate of only 3.5% (relative to some of its neighbours), what is worrying is its inflation rate of 52.4%. It also has an unemployment rate of 13.3%. Its balance of trade is close to negative US$1bn in January 2018.

This article addresses the very recent past of the developments regarding a perceived renewal of interest in Sudan as an investment destination. It will be addressed against the backdrop of the interest shown by China and the USA.

Sudan and the USA

The United States recently lifted a number of sanctions on Sudan, motivated by the perception that Sudan had begun addressing concerns about terrorism and human rights abuses against civilians in its Darfur region. The lifting of sanctions rescinds measures imposed in 1997 related to terrorism concerns and other steps put in place in 2006 in connection with the conflict in Darfur. The sanctions were temporarily eased in January just before President Barack Obama left office, with his administration citing the same progress the Trump administration noted. In July 2017, President Trump extended the review for three months, angering the Sudanese, who stopped some lower-level meetings with USA officials in retaliation, but maintained contacts between senior officials (Morello, 2017).

Lifting the sanctions and ending an economic embargo came after the Trump administration removed Sudan from the list of countries whose citizens are subject to travel restrictions. Other sanctions, however, are still in place for the time being, including those against individuals with arrest warrants related to atrocities committed during the conflict in Darfur. Sudan is also still on the list of state sponsors of terrorism (Morello, 2017).

In addition, there has been progress on the humanitarian front. Sudan’s government has announced unilateral cease-fires in areas where the Sudanese army has been battling rebels; stopped aerial bombardments that killed civilians; and created safe routes for humanitarian aid to get through (Morello, 2017).

There also are geopolitical factors. Both Israel and Saudi Arabia have urged the United States to ease up on Sudan, to encourage it to distance itself from Iran. The USA also wants to encourage a regional effort to end the fighting in South Sudan, to end one of the biggest waves of refugees since the Rwanda genocide. The absence of the USA in Sudan, however, created an open playing field for China and others.

Sudan and China

Chinese-Sudanese relations date back to 1959, when Sudan became the first country in sub-Saharan Africa to recognise China. Today, China is the largest investor in Sudan, as it is in Africa as a whole. However, China’s relationship with Sudan is exceptional because of the absence of competition from the United States. Other than Coca-Cola, very few American products are readily available to Sudanese consumers.

In 1995, President Omar al-Bashir signed Sudan’s first oil deal with China. Some Sudanese government officials noted sarcastically that it was a surprising coincidence that USA sanctions began around the same time China invested in Sudan’s oil industry. In June 1997, the Greater Nile Petroleum Operating Company was established with the China National Petroleum Corporation (CNPC) taking 40% ownership and Malaysia’s Petronas taking 30%. India’s ONGC Videsh acquired 25% when a forerunner of Canada’s Talisman Energy had to leave due to sanctions (Hammond, 2017).

China has invested in other aspects of the industry until it now controls as much as 75% of the Sudanese oil industry. Sudan currently produces 133,000 barrels of oil per day – a fraction of what it produced before the south of the country seceded in 2011, taking most of the country’s proven oil reserves with it. Today, Chinese companies are looking for new oil deposits in Sudan as increasing oil production is one of the government’s priorities. While China started in oil, they now have other interests in trade, mining, and construction as well. Within the oil industry today, most of the engineers and technical experts in Sudan and South Sudan are Sudanese. They were trained in China. Sudan is the only country in Africa where, over time, more locals have been employed by Chinese companies (Hammond, 2017).

Though not typically seen as a part of the Belt and Road Initiative, Sudan sees itself as playing a critical role in the development of China’s plan to link East Asia with western Europe. The Sudanese government believes Port Sudan on the Red Sea will be an important loop in that belt (Hammond, 2017). Given that Djibouti is becoming a crowded space with many countries developing military bases, looking at harbours such as Port Sudan and Suakin does provide flexibility to whoever needs to traverse the Red Sea.

Whereas the USA was reluctant to engage in transaction diplomacy back in 1996, when Sudan offered to turn over Osama bin Laden for sanctions relief, China has proved a willing partner. While the Trump administration is poised to lift economic sanctions on Sudan, it will be a while before Sudan warms up towards the USA. Despite some resentment among the local Sudanese toward the Chinese, due to noncompliance with a Sudanese requirement that the labour force of international companies in Sudan consist of 80% local labour, China’s influence will likely continue unabated (Hammond, 2017). Given that China is already busy with developing its military base in Djibouti, its increasing presence in Sudan and along the Red Sea en route to the Suez Canal should be a source of concern for the USA.

Sudan and Saudi Arabia

Saudi Arabia and the Saudi private sector are currently investing in maritime transport in Sudan, benefiting from the strategic situation of Sudan, to construct new harbours and ports at the Red Sea. Makkawi Mohamed Awad, Sudan’s minister of transport, roads and bridges, pointed to the importance of development in all transport units, particularly maritime transport, and of constructing new ports and harbours. He also referred to the long coast of the Red Sea in Sudan. The Saudi Ambassador to Sudan expressed the Saudi desire to develop bilateral relations to realise joint interests. He noted the vast capabilities and experience of Saudi Arabia in this field, and the strategic situation of Sudan (Anon, 2018a). However, while this new development indicates a rapprochement between Sudan and Saudi Arabia, there are irritations on the side of Sudan due to a failure by Saudi Arabia to deliver on its promises.

President al-Bashir is currently working on winning Qatar and Turkey over to his side to make up for Saudi Arabia’s broken promises. Eager for economic and financial assistance, Sudan severed diplomatic relations with Iran in January 2016 in the hope of securing Saudi investment in agriculture and hydroelectric dams. However, Sudan is still waiting to see these investments. To aggravate matters, Saudi Arabia recently banished tens of thousands of Sudanese nationals on the grounds that they had no residence permit (Anon, 2018b).

In a bid to win the favour of the two main players within the Gulf Cooperation Council (GCC), namely Saudi Arabia and the United Arab Emirates (UAE), Sudan nevertheless agreed to contribute 4,000 soldiers to the war effort in Yemen. Saudi, unfortunately for Sudan, considered these soldiers as behaving like mercenaries. Also, Saudi Arabia is of the view that Sudan is not firmly committed to severing links with Iran, having constructed its security apparatus with the help of the Iranian Revolutionary Guards (Anon, 2018b).

Saudi Arabia is also unhappy about Sudan maintaining relations with Qatar. Sudan’s diplomatic honeymoon with Turkey, which resulted in the handover of Suakin Island to Ankara in return for promises of investment, reconstruction and military cooperation, is another source of unhappiness (Anon, 2018b).

The effect of this unhappiness on the part of Sudan, has led to it reaching out to other countries for development support. This included countries not only in the Middle East, but also further afield.

Sudan and Qatar

Sudan and Qatar have recently started to develop a more intense relationship. Qatar’s Minister for Foreign Affairs and deputy prime minister, Sheikh Mohamed Bin Abdul Rahaman Al Thani, recently visited Sudan in an effort to boost the strategic relations between the two countries in various domains. His visit to Sudan was seen as a historic event that would boost the strategic relations between the two countries in various domains (Anon, 2018c).

Sheikh al-Thani also announced that Qatar and Sudan would form a committee for political consultations and the follow-up of joint projects that would meet twice a year. In addition, he delivered a second message to the Sudanese president from the Qatari Emir in less than two weeks. He and his Sudanese counterpart discussed bilateral relations and means to support and promote them, in addition to topics of mutual interest. They also discussed regional developments in the Middle East and agreed to improve bilateral relations. The Sudanese minister of foreign affairs also expressed his thanks to Qatar for its support to Sudan. The talks covered bilateral co-operation in the economic and political fields, and those related to peace and development in Darfur (Anon, 2018d).

The Sudanese minister of tourism, antiquities and wildlife, Mohammed Abu Zaid Mustafa, in turn has praised the role of Qatar in developing tourism in Sudan through continuous support and the rehabilitation of monuments in northern Sudan. Qatar has been working since 2013 on the restoration of monuments in Sudan and has achieved great successes in this area. The programme to develop the antiquities will continue until 2020. The Sudanese minister said that he would visit Qatar soon to take advantage of the Qatari experiences in the field of tourism. He also seeks to expand Qatari support to all the states of Sudan.

An analysis of Qatari projects in Sudan in the tourism sector showed that they opened wide horizons for Sudan in the field of archaeological tourism, and the areas where the missions of Qatar are the most attractive tourist destinations, especially for tourists coming from European and Asian countries (Anon, 2018e).

The governor of the Red Sea state in eastern Sudan, Ali Ahmed Hamid, praised the significant role played by Qatar in promoting economic stability in Sudan. He referred to the construction of the new Suakin port that would be a model to strengthen relations between the two countries. He noted that the new port would be the most modern on the Red Sea coast in terms of operational equipment at an estimated cost of more than $4bn. The construction of the first phase costing $500m, began with the signing of the agreement in the last week of March. It would be completed in 30 months. He emphasised that a maritime transport line would be inaugurated between Hamad Port in Qatar and Suakin Port and all the Sudanese ports on the Red Sea. Hamid pointed out that all preparations for receiving Qatari ships would be completed by the beginning of next April (Anon, 2018f). Sudan last year signed a separate deal with Turkey whereby Ankara would restore part of Suakin and construct a naval dock to maintain civilian and military vessels (Reuters, 2018).

The above development could anger Egypt, who has been accusing Qatar of supporting the banned Muslim Brotherhood movement – which Doha has denied – and who joined a Saudi-led boycott of Qatar last year. Sudan’s strengthening ties with Turkey and Qatar come as it pledges further cooperation with Egypt after a year of unstable relations between Sudan and Egypt (Reuters, 2018).

Economically, from a more detailed perspective, it seems that Qatar has been positioning itself in a meaningful way in Sudan. Qatari investments in Sudan represent a large proportion of foreign investment in this country, through Qatari institutions such as Qatar National Bank (QNB), Diar Real Estate Investment, Widam, Hassad Food Company, Barwa Real Estate Group and Qatar Mining, in addition to Silatech, Education Above All and Qatar Museums projects, as well as Qatar Charity, Qatar Red Crescent, the five Darfur projects and the UN Development Fund for Darfur projects. The current Qatari investment in Sudan amounts to more than $2bn and is expected to rise with the introduction of new sectors such as Qatar Mining Company (QM), which will invest more than $1bn in its field (Anon, 2017).

Hassad Food’s agriculture project is the most prominent, where the company will contribute to the cultivation of 260,000 acres in the River Nile state. The company is also implementing an electricity project in the area with a value of more than $200m, where many phases have been completed. Widam Food focuses on the field of live red meat and butchery and exports it to Qatar and other Gulf states and now seeks to extend its investments to include poultry and other types of meat. In addition, Qatar National Bank (QNB) has 14 branches in Sudanese cities, whereas QM is investing in seven mining blocks, considered to be among the most promising blocks in the field of exporting gold and other minerals (Anon, 2017).

Within the framework of the Qatar-Sudan Archaeological Project in the River Nile and Northern states, Qatar provided more than $50m to the archaeological missions working there since its launch in 2012. Qatar Museums also facilitated the transport of Sudanese to the archaeological sites and developing the skills of Sudanese academic institutions and refining their expertise (Anon, 2017).

In the humanitarian field, Qatar Fund for Development (QFFD) signed a number of Qatari developmental projects worth $70m in Khartoum, as part of Qatar’s initiative for the development of Darfur. The initiative will implement comprehensive projects in villages and complexes of voluntary return in the five Darfur states, with two projects per state (Anon, 2017).

Sudan and Turkey

According to the acting president of A New World Industrialist and Businessmen’s Association (YENIAD), Sudan needs an investment of approximately $500bn in various sectors. The country is among the top three African countries having gold and copper mines. Given the lack of proper mining technology, Sudan has certain limitations. Turkish businesspeople were urged to establish a system to process those metals and integrate them with Turkey’s gold exchange market to provide overseas finance for Sudan. Five consortiums were created with Sudanese and Turkish businesspeople in the fields of construction, energy, mining, agriculture and machinery. The construction consortium includes building roads, bridges, hotels, schools and infrastructure works (Anon, 2018g).

This support goes back further in time. In 2014, Turkey and Sudan signed an agreement to rationalise resources and agricultural potential and contribute to sustainable food objectives. Under the agreement, around 780,000 hectares across five regions were earmarked for investment by Turkish entrepreneurs. Talks were underway for establishing livestock laboratories based on international standards in Sudan, which is one of the largest animal-breeding countries in Africa. Turkey’s exports to Sudan totalled $395m in 2017, while imports from Sudan stood at $86.2m (Anon, 2018g).

In February 2018, agreements totalling $50m in the fields of water and energy were signed, including the construction of a dam on the Nile river. Turkey also offered Sudanese officials cooperation in software education by providing a turnkey system for schools in the country. The Turks were willing to increase this investment if Sudan was prepared to remove bureaucratic hurdles and improve its financial infrastructure. A further indication of Turkey’s support for Sudan, is the announcement of a bilateral trade volume target of $10bn by President Erdogan during his visit to Sudan in December 2017 (Anon, 2018g). During this visit of President Erdogan, Turkey and Sudan agreed to establish a strategic Cooperation Council and to enhance trade agreements between the two countries (Anon, 2018h).

Turkey also supported Sudan in its banking sector. A Turkish company will support the Central Bank of Sudan with $2bn, which will be used for the import of petroleum products and wheat. The amount is to be paid back within two years. In addition, two shipments of petrol have been sent to Sudan, along with four shipments of cooking gas (Anon, 2018h).

In another venture, a Turkish company, Summa, will build the new Khartoum international airport at an estimated cost of $1.15bn. Summa pledged to finish the first phase of the project worth $800m within 30 months. Sudan sees the agreement as representing a new initiative in the field of private sector infrastructure investments in the country, which is in keeping with Sudan’s policy aimed at affordable investment opportunities for local and foreign investors. Sudan is further of the opinion that the direct involvement of Summa in infrastructure projects will encourage several international firms to invest in similar projects in the country (Anon, 2018j).

Sudan and Russia

While it is generally perceived that it is a situation of the USA versus China as far as Africa is concerned, it does seem that they are getting competition from further afield. Russia has agreed to supply Sudan with a small-capacity floating nuclear plant to produce electricity, and will endeavour to complete the technical studies to build Sudan’s nuclear power plant within eight years. The project is part of a plan to generate more than 5,000 megawatts by 2020 (Anon, 2018k).

President al-Bashir recently announced that Sudan and Russia had agreed on a programme to boost Sudan’s military capabilities. The plan aimed to enable the Sudanese military to counter any threat. Russia would develop the Sudanese armed forces in a way that will deter anybody who intends to harm the country.

Apparently it was during this trip to Russia in November 2017 that al-Bashir asked for Russia’s cooperation in the field of nuclear power. Sudan’s air force is comprised mainly of Russian warplanes, and the bulk of its military equipment has also been traditionally supplied by Russia (Anon, 2018l).

During the mentioned trip to Russia, al-Bashir blamed the USA for the secession of South Sudan in 2011, and claimed that the USA was now planning to split the rest of Sudan into five countries. Bashir apparently also discussed the establishment of military bases on the Red Sea coast with President Putin and his defence minister. In addition, he expressed support for Russia’s role in Syria (Adam, 2017). According to Ismail (2018), al-Bashir also offered Sudan as a gateway into Africa for Russia.

The relationship between Russia and Sudan are by no means new. For decades, there were economic, political and military relations between the two countries. Russia as a permanent member of the UN Security Council, along with China opposed initiatives to send peacekeeping missions to Darfur, although the Sudanese accepted the peacekeeping mission through the Comprehensive Peace Agreement in 2005. In addition, Russia has been a major arms supplier for a considerable time. The programme referred to above regarding developing the Sudanese military is therefore a mere continuation of a historical trend (Ismail, 2018).

Sudan and the UAE

In addition to Turkey supporting the Sudanese Central Bank with its foreign exchange crisis (as referred to above), the UAE has stepped in and offered $1.4bn to Sudan’s Central Bank. According to Sudan’s state news agency (SUNA), the deposit was provided by the Abu Dhabi Fund for Development. The UAE aid comes just days after the Central Bank had agreed to a $2bn loan from Turkish conglomerate Ozturk to help Sudan purchase petroleum products and wheat (Anon, 2018m).

The minister of finance and economic planning, Dr Mohamed Osman Al-Rikabi, has stressed the depth of the economic relations between Sudan and the UAE, pointing to UAE’s continued support to Sudan. The UAE ambassador in Khartoum, in turn, praised the efforts by Sudan from all financial system units, including the private sector and banks, to support the investments of the UAE in Sudan. The UAE ambassador Al- Junibi said that the Sudanese minister of finance had expressed his readiness to provide facilities to the UAE investments in Sudan to support Arab food security projects (Anon, 2018n).

Sudan and the United Kingdom

Sudan’s deputy prime minister and minister of investment, Mubarak Al-Fadil, recently welcomed British investors in Sudan at a forum. He identified several fields available for British investment, emphasising Sudan’s desire to establish strong economic relations with Britain to benefit from the industrial and technical development of the United Kingdom (UK). A number of British businessmen expressed their willingness to invest in Sudan in the fields of alternative energy and agro-industrial projects, especially after the lifting of US economic sanctions, pointing out that Sudan has promising opportunities for investment (Anon, 2018p).

The representative of the British Ministry of International Trade and Regional Head of Trade in East Africa, Daniel Rathwell, said the forum aimed at the creation of a platform for exchanging information and experiences with the government and the private sector. The British charge d’affaires, David Liliot, said the forum came within the framework strategic dialogue with the Sudanese government as part of the UK’s commitment to contribute to Sudan’s economic growth. A number of experts from the British Chamber of Commerce in Kenya and the British International Chamber of Commerce participated in the forum (Anon, 2018p).

Sudan in Africa

Sudan has not just been a passive recipient of foreign support and investment. It has also turned towards Africa, more specifically the Horn of Africa. The government of Sudan announced that an economic coalition will be created among the countries of the Horn of Africa during a summit of its member countries on 12 April 2018. The summit will be held in Khartoum and be attended by heads of state or government from Sudan, Ethiopia, Eritrea, Djibouti and Somalia. The coalition of the Horn of Africa seeks to achieve economic integration and association amid these countries on investment and trade, while sharing information and experiences (Anon, 2018r).


For a long period of time, we saw very little investment activity in Sudan, with the exception of China. The sanctions imposed upon it by the USA had a severe negative effect. In the past few months alone, one saw Russia, the UK, Turkey, Qatar and the UAE being active in Sudan. There is now clearly a trend of foreign governments and companies investing in Sudan. The question is whether this is a short-term phenomenon or is this a trend that will grow into the future? As it is, China is Sudan’s biggest trade partner, importing oil from Sudan while exporting low cost items as well as armaments to Sudan. China’s footprint in Sudan has grown exponentially the past 20 years. The USA’s sanctions against Sudan means a zero US-footprint in the country, while it gave China the gap to increase its presence substantially.

There are undoubtedly many challenges to investing in Sudan, but this increasing number of countries that have identified Sudan as an investment destination, show that there is an appetite for investments in Sudan. Some countries, like Qatar and Turkey, in addition to the obvious role of China in Sudan, are increasing their footprint in this country. The reasoning behind these moves are not just economic, but also geostrategic, given the location of Sudan along the Red Sea and the busy sea lanes to and from the Suez Canal. As it is, Djibouti, a bit further south, has become very busy, and one can even say a bit crowded. Developing other options in Sudan generates more strategic flexibility for the various stakeholders.

To state the obvious, it is also good for Sudan to receive these investments given the long period of sanctions against it, driven by the USA. While Ethiopia had also been looking at developing links to Port Sudan further up north of Suakin, a more developed Suakin could reduce travelling time from Addis Ababa and provide additional flexibility for Ethiopia and reduce its dependence on Djibouti. As it is, Port Sudan has also become busy. The main port at Port Sudan is about to reach its limit due to the expansion of the city, which pushed them to look into alternatives. An option was deepening the Suakin harbour by some 700 metres and enable it to handle sizeable freight.

For Saudi Arabia and Egypt, the location of the island is geopolitically very sensitive as long as it is under Turkish control. Suakin’s development by Turkey can be seen as an expansion of Turkish influence in the region at the expense of Egypt. Handing over Suakin to Turkey has apparently also created an internal crisis in Sudan, however, with many Sudanese opposing the action. This is due to the brutal Turkish crimes in Sudan during its colonisation. Suakin is therefore not an ordinary place in Sudanese memory, but it is an island associated with the colony and resistance against Turkey historically (Minawi, 2018).

Whereas some countries are casting a doubtful eye on Sudan, others are seeing the opportunities waiting to be exploited. While it is so that the risk averse amongst us would be hesitant to venture into Sudan, others are clearly aspiring to be first movers in obtaining the benefits of investing in the country. Those investors with the necessary risk profile can jump in early and tap into various opportunities.

On a side note, we also see Turkey increasing its investment footprint in Africa. The trade figures show that there is a significant trade surplus in Turkey’s favour. Sudan will hopefully benefit from the agreements to the extent that its deficit with Turkey can be reduced. Turkey has been quietly building its presence in Africa. There are now over 40 Turkish embassies in Africa, and Turkish Airlines flies to more than 50 African destinations. Turkey also recently opened a military base in Somalia, its first in Africa and the largest of its overseas bases. Given the views that the USA and EU have of the Turkish president, it will probably not be long before these countries start campaigning against Turkey’s presence in Africa.

Qatar’s outreach to Sudan gains greater clarity when seen against its isolation by its former partners in the Gulf Cooperation Council (GCC). Sudan provides it a destination for the expansion of its financial services industry. In addition, given that Sudan has one of the largest animal-breeding industries in Africa, it can serve as a source of beef for Qatar within the context of the sanctions and embargoes against it by its former GCC partners.

Reaching out to Russia to obtain support and assistance with its nuclear energy aspirations is one thing. Offering Russia the opportunity to establish military bases in Sudan is a totally different kettle of fish. Although such a presence of Russian forces in Sudan would deter military action against Sudan by its neighbours (most likely Egypt), it does make Africa a potential future battleground. It also provides Russia with geo-military influence beyond its current areas of influence. It currently has a presence in Crimea, in Syria and now potentially in Sudan, alongside the strategically important Red Sea avenues to the Suez Canal. The geo-strategic importance of this is that it provides Russia with a global military reach. Reaching out to Russia could also entice (probably already did) the USA to soften its stance towards Sudan and lift all the sanctions it had imposed against the country.

It does seem that underlying the developments in Sudan, there are a number of political issues with a religious underpinning. This tends to complicate the developmental initiatives in the country. These issues are by no means of a superficial nature, and those interested in investing in Sudan, should do a proper due diligence lest they be caught off guard.

Given the entrenched Chinese presence in Sudan, and the overtures Qatar, Russia and Turkey are evidently making towards Sudan, the USA, if it is interested in curtailing the influence of China and the others, should not take too long before it reaches out to normalise relations with Sudan. The country’s strategic location along the Red Sea makes it a potentially valuable ally.

The author, Johan Burger, is the director of the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation. Johan can be reached at [email protected]