Gulf cash flows into post-war Sudan
DUBAI and CAIRO – An 18-hole golf course might not seem a priority for the capital of Sudan as the country embarks on a shaky power-sharing transition aimed at ending Africa’s longest war.
It comes as part of a new US$4-billion Gulf-funded commercial and residential development, construction of which began in Khartoum this month.
U.S. government sanctions forbid American companies from direct investment in Sudan, while European and Asian companies are focusing on oil concessions in the mainly Christian and Animist south.
Businesses in neighbouring Egypt, meanwhile, are cautious about entering a market they still see as volatile.
This has left the field open for Gulf investors — flush with cash from the oil boom and seeking to expand beyond the Arabian peninsula — to get in at the start of what they hope will be Sudan’s postwar recovery.
Designed and planned by consultants in the United Arab Emirates and Malaysia, the Almogran development in Khartoum bears many of the hallmarks of projects raising billions for developers in the Gulf.
Its appropriateness for what is now a poor and dusty African city is predicated on Sudan’s own oil-fuelled economy spawning a new era of prosperity. It is only the most ostentatious example of a growing number of Gulf projects there.
Despite its ethnic mix, Sudan is a member of the Arab League, and the Arabized north has strong ties to the Gulf due partly to generations of war-weary Sudanese seeking employment across the Red Sea.
According to Osama Abdellatif, the chairman of the Sudanese conglomerate DAL Group and one of the partners in Almogran, it is “culturally simply a lot easier for us to do business with the Gulf.”
Mr. Abdellatif says he has relocated DAL’s London office to Dubai and has transferred all the accounts of his diverse engineering and distribution businesses to Middle Eastern banks.
“They find it easier to understand our needs than western banks, who we basically can’t work with after Sept. 11,” he explains.
“Too many questions, too many rules and no service.”
Dubai Islamic Bank is the largest foreign investor in Almogran, according to its promoters, and by spending $150-million on construction it will bring its investments in Khartoum to about US$1-billion.
In Egypt, which attaches strategic value to relations with its southern neighbour, trade is picking up but businesses are more cautious about investing.
Hassan Badrawi of Egypt’s construction group Orascom, said, “We are a likely investor in Sudan. It’s a matter of safeguarding shareholder interests and picking the right time to go in.”
(Financial Post)