World Bank urges Sudan to diversify its economy: report

September 25, 2016 (KHARTOUM) – The World Bank Group (WBG) has advised the Sudanese government to accelerate structural transformation and economic diversification in order to reach a more stable economic growth path.

Sudan’s economy was hit hard since the southern part of the country declared independence in July 2011, taking with it about 75% of the country’s oil output.

In its newest Country Economic Memorandum (CEM) for Sudan entitled “Realizing the Potential for Diversified Development” released on Sunday, the WBG pointed that Sudan needs to implement a combination of institutional, macroeconomic, and sectoral reforms to reach a more diversified, non-natural resource economy.

“Economic diversification is high on the Government of Sudan’s agenda”, said Michael Geiger, lead author of the report.

“While the authorities have succeeded in reducing inflation and slightly recovering from the negative growth rates of 2011 and 2012, more must be done to ensure a more stable medium-term outlook,” he added.

The report mentions a number of barriers that have been preventing Sudan from effective economic diversification including the “high and volatile inflation, a long overvalued exchange rate, low productivity in agriculture, among others”.

It proposed several measures to remove these barriers including “removal of exchange restrictions to unify the official and black market rates, increasing agricultural productivity through key policy changes, improving the management of natural resources rents, addressing broader business environment constraints and building human capital to support structural change”.

WBG Country Director for Ethiopia, Sudan and South Sudan, Carolyn Turk, pointed the report encourages Sudan to apply a set of direct and indirect approaches in order to “embark on the structural transformation necessary to accelerate inclusive economic growth leading to sustained poverty reduction”.

Xavier Furtado, WBG Country Representative in Sudan, for his part, said that Sudan needs to implement a road set of reforms to diversify its economy, saying the WBG would launch several initiatives to help the Sudanese government in this regard.

(ST)