Sudanâ€™s economy has been facing challenges since the secession of South Sudan in 2011. This political development gave a shock to the economy by it losing almost 75% of its oil production, 55 percent of its fiscal revenues, and about two-thirds of its foreign exchange earnings. Inflation increased to 44.4 % in 2012 which eventually declined to 27% in 2013 indicating a gradual improvement of the situation. Fiscal performance exceeded budget projections on account of an improvement in tax collection as well as higher imports. Current spending was contained at 4.9 percent of GDP, in line with the budget target. The overall fiscal deficit reached 1.3 percent of full-year GDP, against a budget target of 1.6 percent of GDP. The reform process which was adopted in 2012 and the 2013 follow up to it which yet needs to be implemented along with the 2013 agreement with South Sudan on oil and security matters would provide a much needed window of opportunity for the economy to revive. Real GDP is expected to grow at 2.5% in 2014.
Sudan has failed to adequately diversify its economy and the oil sector, despite losing most of its production to South Sudan, accounts for half of Sudanâ€™s government revenue and 95% of exports. Agriculture accounts for 35-40% of GDP, with livestock â€“ mostly sheep â€“ comprising half of production. Still Sudan is a net importer of food as only 20% of its 84 million hectares of arable land is cultivated. Sudanâ€™s industrial sector represents about 31% of GDP and produces military equipment including assembly of armored vehicles. Sudan also has Africaâ€™s largest gold refinery, with the capacity to process 600 tons annually. The services sector provides about 41% of GDP.
Sudanâ€™s overall doing business ranking (ranked 149 out of 189 economies) has declined by 6 ranks in in 2014 from 2013. Almost all of the indices declined their rankings from 203 to 2014. The rankings across indices were â€“ starting a business ( 131), dealing with construction permits(167), getting electricity(113), getting credit (170) and enforcing contracts( 154). In the region the country ranks 16th.