Khartoum- Industrial facilities in Sudan have begun moving from the capital, Khartoum, to safe states after being affected by the war to varying degrees, with 90% of them damaged, according to official estimates.
Sudan has become dependent on importing its goods, which has put pressure on the country’s foreign currency reserves and contributed to the deterioration of the exchange rate of the national currency (the pound).
economic pillar
The industrial sector in Sudan, despite its decline in recent years due to several factors, is one of the pillars of the national economy, most notably the cement, iron and steel, agricultural equipment, oil refining, car assembly, ethanol and pharmaceutical industries.
These industries are added to the manufacturing industries that depend on agricultural products, both plant and animal, including textile, sugar, edible oils, meat, leather, food and packaging industries.
About two months before the outbreak of war in April 2023, the Ministry of Industry stated during a forum on the reality of industry and its challenges that it contributes 17% of Sudan’s gross domestic product, in addition to agriculture (32%) and services (51%), according to reports from the Central Bank of Sudan.
The ministry acknowledged that 40% of the country’s factories, or 2,655 factories out of 6,660, had stopped operating due to weak financing, high operating costs, the energy crisis, multiple fees imposed by local authorities, and flooding of markets with goods imported from the Common Market for Eastern and Central Africa (COMESA) countries that are cheaper than those manufactured locally.
Bullet of mercy
An official report seen by Al Jazeera Net revealed that the destruction due to the war, systematic destruction and looting by the Rapid Support Forces affected 90% of the industrial sector, as 3,493 industrial facilities were damaged, distributed between medium and large facilities in Khartoum State, in addition to the states of South Kordofan and Al Jazirah. The sector employs more than 250 thousand workers.
According to the report, the destruction and looting led to the loss of capital assets, production lines, raw materials, production inputs, and even semi-finished products in warehouses.
The report explains that the repercussions of what the industrial sector has been exposed to extend to the displacement of workers and the loss of families’ source of income, in addition to the damage to the economy due to the halt in the production of products with economic and social impact, especially essential goods, medicines and food products.
Last May, the official Sudanese News Agency quoted the Secretary-General of the Arab Union for Export Development at the Arab League, Abdel Moneim Mohamed Mahmoud, as saying that the losses of the industrial sector in Sudan due to the war are estimated at about 20 billion dollars, as Sudanese banks do not have the capacity to provide comprehensive financing to rebuild the sector, according to him.
For her part, Minister of Industry Mahasin Yaqoub said during a forum for the reconstruction and development of Sudanese industry in Port Sudan last week that her ministry is working with the states to prepare industrial zones and encourage local and foreign investors, to attract them and establish industrial sectors in the states to achieve balanced development in the country.
She stated that the ministry approved a plan and map to rebuild what was destroyed by the war, as a number of local and foreign investors began their procedures to invest in the states of the Red Sea, Kassala, Al-Qadarif, the River Nile and the Northern, to establish industries for food and pharmaceutical products, mills and strategic industries, according to the comparative advantage of each state.
She pointed out that the Ministry is coordinating with the states to provide incentives to investors to attract them and establish many industrial sectors in the states to achieve balanced development in the country.
In the first initiative to revive the industrial sector, the governor of the Northern State, Abdeen Awad Allah, announced that the state government would begin establishing a pharmaceutical manufacturing city, after the war destroyed all 27 pharmaceutical factories in Sudan. He allocated a site for it in the city of Dongola, the state capital, which is adjacent to the Egyptian border.
poor planning
For his part, the Secretary-General of the Federation of Chambers of Industry, Abbas Ali Al-Sayed, believes that the war revealed poor planning in the country, as industry was concentrated in Khartoum by more than 70%, then in the states of South Darfur and Al-Jazeera, which led to its destruction and the halting of industrial production in the country.
Al-Sayed revealed to Al Jazeera Net that the damages suffered by businessmen in the industrial sector have greatly affected their capital, as the losses of a single investor range between 3 million and 100 million dollars, and include capital capabilities, production capacities, raw materials, semi-manufactured products, machinery, equipment, and even buildings.
He explained that many businessmen had obtained bank loans to operate their factories before the war, adding that they had suggested to the banks to reschedule the loans to enable the factories to resume work and pay their obligations.
Regarding the migration of factories from the capital – which used to account for more than 70% of the factories – to the states, Abbas Al-Sayed says that businessmen headed to the states to transfer what remained of their equipment and devices there, but the state governments set high prices for land. He called on the government to develop a clear plan regarding the industrial map to avoid repeating previous mistakes.
Regarding the reconstruction of the industrial sector, the Secretary-General of the Federation of Chambers of Industry spoke about:
- The necessity of proper planning and developing a binding investment map.
- Entering into foreign partnerships.
- External financing is available for a relatively long period of time, ranging from 10 to 15 years.
- Technical support with foreign expertise and benefit from other experiences such as China, Turkey and Malaysia.
Practical obstacles
Mohamed Al Mubarak, owner of food and packaging factories in Omdurman, complains that his factory was destroyed and his machines and even the electricity cables were looted.
Al-Mubarak told Al Jazeera Net that the great destruction of the industrial sector led to the disappearance of the majority of locally produced goods from the markets, after they had covered goods and products with specifications superior to imported ones, which led to an increase in the import movement and pressure on foreign currencies and the deterioration of the Sudanese pound exchange rate, which reached 2,450 pounds against the dollar in the parallel market, while the dollar was equal to 680 pounds before the war.
He added that some investors have started establishing new factories or branches of their factories in the states to resume production and maintain their products and brands in the local markets, but they have not found facilities from the state authorities who are considering fees and raising land prices, according to him.
Al Mubarak points out that manufacturers are facing an energy and financing crisis due to the weak capabilities of local banks.
For his part, industrial economics expert Salim Abdullah says that the industrial sector will face major challenges in the coming period, most notably:
- Financing after many investors lost their capital due to the war.
- Migration of skilled and trained workers, especially those who have sought refuge abroad.
- Infrastructure and electricity problems in the states.
In an interview with Al Jazeera Net, Abdullah said that there is no investment map, and he spoke about the absence of information that would allow the investor to make the appropriate decision, despite the relative advantages available in each state, where agricultural raw materials, livestock and minerals are available, in addition to its proximity to the borders with Libya, Chad and the Central African Republic to the west, Egypt to the north, and Ethiopia and Eritrea to the east, which facilitates the export of its products to large markets.
The expert suggests establishing industrial cities, providing electricity and water services, and linking them to a road and communications network to make them attractive to investors, in addition to reducing the fees imposed on goods in the states, so as not to affect the price of the final product, and to increase its competitiveness.
