The Effect of the

American Sanctions

on

Sudanese IndustriesBy:

Eng. Mohamed Suliman

MBA – Project ManagementMember of the Foreign Agreements Secretary

Sudanese Businessmen Federation

• The US government first imposed sanctions in 1997, after theyfound that:

“the policies and actions of the Government of Sudan, includingcontinued support for international terrorism, ongoing efforts todestabilize neighboring Governments, and the prevalence of humanrights violations, including slavery and the denial of religiousfreedom, constituted an unusual and extraordinary threat to thenational security and foreign policy of the United States”.

• These sanctions were designed to restrict foreign investment,ban defense exports and sales, and terminate commercialactivities between the two Countries.

Overview Of US Economic

Sanctions

• There were further sanctions imposed in relationship to Darfur in 2006.

• These were designed to maintain economic sanctions against the governmentof Sudan while allowing relationship with the Southern regional governmentestablished after the Comprehensive Peace Agreement was signed.

• These sanctions, US EO 13412, were also designed to especially hit Sudan’spetroleum industry.

• The current number of Sudanese companies blacklisted by the Americangovernment now comes to 160.

• One of these companies is GNOPC, the consortium responsible for most ofthe oil production in Sudan.

• Equally, these sanctions singled out members of al Bashir’s government –Ahmed Haroun, the state minister for humanitarian affairs, and Awad ibnAuf, the country’s director of military intelligence – for directed personalsanctions.

Overview Of US Economic

Sanctions

Activities of the Industrial

Sector

The industrial sector is composed of the following sub sectors:-

1. Food Industries

2. Spinning And Textile Industries

3. Leather Industries

4. Chemical And Pharmaceutical Industries

5. Oil And Soap Industries

6. Engineering Industries

7. Building materials and refractories

8. Printing and packing

9. Mining & Petroleum

10. Telecommunication

11. Transportation

Activities of the Industrial

Sector

1/ Food industries sub -sector:-

• This is a principal sector in the country considering its

necessity and it's linkages with the agricultural sector,

which represents the backbone of the Sudanese economy.

• Available capacities are very high and can supply the

requirements of the local market with surplus for export.

Activities of the Industrial

Sector

2/ Textile Industries sub sector:-

• Considering the availability of raw materials (cotton)

textile industry has emerged in the country.

• The total capacities of spinning 59 thousand tons, textile

300 thousand tons million yards and 21 million pieces of

ready-made clothes.

Activities of the Industrial

Sector

3/ Leather Industries sub- sector:-

• Leather can be considered as one of the important economic sub- sectororiented for export. Animal wealth of the country is estimated at 125million heads of cattle, sheep, goats, camels,…etc. The raw hides andskins are distinguished by hard fibers and consistent texture.

• The available infrastructure is composed of about 20 tanneries (large,intermediate and small) having design capacity of about 15 millionpieces of sheep and goat and about 3 million pieces of cattle hides.

• The sector is also distinguished by high install capacity for production ofleather products and in particular leather shoes to about 17 million pairsof leather shoes.

Activities of the Industrial

Sector

4/ Chemical and pharmaceutical Industrial Sector:-

• This is a large sector and includes a number of importantproducts such as:

• Tires,

• Batteries,

• Matches,

• Plastics,

• Pharmaceuticals and

• Medical gases and

• Paints

Activities of the Industrial

Sector

5/ Oil and Soap Industries sub- sectors:-

1.Soap Industry: -

Soap industry is distinguished by high range of manufacturingcapacities estimated at 520 thousand tons washing soap, 40 thousandtons powder, 20 thousand tons toilet soap which can supply all thedemands of the country and also and there is surplus for export.

2. Oil Industry:-

Installed capacity of is estimated at about 3 million tons and can dealwith cotton, seeds, sunflowers, sesame and peanuts and groundnuts, etc.

Activities of the Industrial

Sector

6/ Engineering industries:-

• It represents an important sub-sector in the economy andincluded basic industries such as foundries, spareparts, refractories, metal products and Corrugated sheets.

• The installed capacity of this sector is estimated totally at 250thousands tons a year.

• In addition, there is a factory for cars, tractors and agriculturalequipment assembly.

Activities of the Industrial

Sector

7/ Building Materials:-

• This sub-sector distinguished by the abundant of its raw materials.Natural marble is available in abundant and granite with capacity of 9square meters yards also available in the country.

• Portland cement is manufactured in 5 factories with a capacities up to800 thousand tons a year, now there are some exports to neighboringcountries.

• Ceramic industry had also started in the recent years and now thereare two big factories producing tiles for the local market

Activities of the Industrial

Sector

8/ Printing and packing sector: -

• This sector that feed other sectors with their requirements

of packing materials along with feeding the open market

with all needed printed material from books to other

stationary related printed material.

Activities of the Industrial

Sector

9/Mining and Petroleum:-

This is the biggest industry in Sudan divided into two sectors:

• Mining: After the discovery of big reserves of gold and otherindustrial chemicals raw material mines a big attention had been giveto this sector and a lot of investment is now drawn to this sector

• Petroleum: This is the main source of revenue for the governmentand a promising sector though it was affected by the separation of theSouth of Sudan but still Sudan have its own resources and there isstill of exploration which is going on, also the pipe line which wasconstructed is still the best way for the South of Sudan to export itscrude oil

Activities of the Industrial

Sector

10/Telecommunication:-

• Though it is not an industrial activity, but it can be considered an industry and a the same time it is a main service that affects the industrial sector

• Sudan have 4 operators, three of which are providing mobile services while two provide fixed terminal services, all operators provide internet services

• The sector is the biggest in the size of investment and labor contribution to the economy after the petroleum sector

Activities of the Industrial

Sector

11/Transportation:-

Same as Telecommunication, though it is not an industrial activity but it is a main service

that is defined as industry, it consist of three main activities:

• Road Transportation

• Air Transportation

• Water Transportation

This is a field where there is a lot to be done as it depends on the countries’ strategy on

development as it needs a lot of infrastructural support such as roads, ports and airports to

support the development of such sectors

This sector highly affect the costing of all other sectors as all are transporting something

to somewhere , the sector have developed in the road transportation capacity but not

distance travelled, the water transportation and air transportation are still to develop more

Sector MembershipFood Industries 990Spinning And Textile Industries 112Leather Industries 152Chemical And Pharmaceutical Industries 182Oil And Soap Industries 295Engineering Industries 1190Building materials and refractories n/aPrinting and packing 190Mining & Petroleum 675Telecommunication 4Transportation n/a

how big are they?

Banking transactions

Exchange rate losses

Import Export Services Technology

Engineering Industries x x x x

Textile x x x

Leather & Footwear x x x

Food industries x x

Chemicals & Pharmasutical x x x x x

Oil & Soap x x x

Printing & Packaging x x

Plastic & Paints x x

Telecommunication x x x x

Mining & Petrolume x x x x x x

Transportation x x x x x

effects on Sudan's

various industries

The most affected sectors are:

• Petroleum and mining

• Chemicals and Pharmaceuticals

• Transportation

• Engineering Industries

which ones are affected

most?

Side effects

• The EU and the Gulf countries though they are

not imposing sanctions they have an undeclared

boycott or un-willingness in cooperation to avoid

American reaction same as what happened to

BNP Paribas when discovered helping Sudan in

transactions

• The main components of the effects are:

- Transaction – Using other currencies

- Exchange rate – Doing deals with fixed currencies

- Export – alternative markets (Africa, Asia and Europe)

- Import – alternative markets (Africa, Asia and Europe)

- Services – alternative suppliers (Asia and Europe)

- Technology – alternative suppliers (Asia and Europe)

which ways out do and

can industries find?

THANK YOU