Mohammed Al-Sheikh Hussein Although the revenues from our agricultural exports, both plant and animal, do not constitute a significant portion of the country’s hard currency earnings, the current state of the national economy requires greater efforts to promote exports. This is crucial to reviving the long-forgotten story of diversifying exports and improving their quality to compete in global markets. Here is the first part of the prescription for a solution. (1)Returning to this old story begins with a question: Is it due to poor planning and management that the country’s agricultural exports represented one-sixth of the gross national product in the 1960s, only to decline five decades later to one-fiftieth of the gross national income? Does this mean that diversifying exports, or revitalizing agricultural exports for a country once called the “breadbasket of the world,” has become a forgotten chapter in our history? (2)Historically, Sudan enjoyed success in exporting many agricultural products, such as cotton, oilseeds, gum arabic, livestock, and other products that were important at different times, like sorghum and sugar. (3)Over time, traditional exports stagnated, causing Sudan to lose its market share. It had previously been a leader in some sectors, such as gum arabic and sesame. Furthermore, exports became concentrated in specific countries; for example, live sheep were exported to Saudi Arabia, cotton to Egypt, and sesame to Saudi Arabia, Egypt, and the UAE. (4)In reality, Sudan’s exports experienced a boom due to oil. It was the third largest oil producer in sub-Saharan Africa after Nigeria and Angola, with production estimated at around 500,000 barrels per day in 2008. After the secession of South Sudan, we were excluded from this market. (5)However, the reality was not entirely positive. A study entitled “Diagnosing Trade Integration for the Integrated Framework Program” revealed that while investments in petroleum resources increased national wealth, they complicated macro-economic management by creating internal and external imbalances and hindering the development of other sectors crucial for balanced growth and equitable distribution. (6)According to the study, petroleum revenues enter public finances and generate fluctuations in monetary policy. Furthermore, the current account deficit increased with the surge in oil prices, leading to an appreciation of the national currency. This situation resulted in a loss of competitiveness, adding to the existing supply-side constraints on goods production. (7)The overall objective of the study can be summarized as follows: revitalizing non-petroleum exports aligns with national priorities. Before delving into the details, it’s worth noting that this study was prepared by the Integrated Framework Program focal point of the Commission on World Trade Affairs, which serves as a laboratory for developing economic policies to address the requirements for joining the World Trade Organization. This important study, aimed at preparing Sudanese exports to meet the requirements of international trade and the demands of market competition, was prepared with the participation of experts and specialists from all relevant government agencies involved in exports, as well as experts from the World Bank. (8)According to Dr. Mohamed Ali Dengel, the study’s coordinator, revitalizing agricultural exports can play a crucial role in leveraging Sudan’s vast resources to integrate into the global economy and achieve broad-based economic development, while simultaneously improving living standards for large segments of the population. (9)The study clearly indicates that oil has been the primary driver of economic growth. However, for this growth to be sustainable, it is essential to consider increasing income through diversifying the resources utilized to achieve inclusive growth, thereby accelerating and expanding non-oil exports. (10)This situation necessitates integrating trade into development and poverty reduction efforts, including revitalizing exports that have generated substantial revenue for over half a century. In the long term, it becomes clear that Sudan needs to move up the value chain to develop processed exports such as meat and other manufactured products. (11)The study argues that Sudan cannot achieve economic growth and combat poverty by focusing solely on the needs of the domestic market. Producers must consider the needs of the global economy, not only to sell their products but also by relying on investment partnerships and collaborations with entities that supply production inputs. (12)In examining the internal and external obstacles to Sudan’s integration into the global economy, the study reveals that most of these obstacles are domestic. Aside from the US embargo, Sudanese exports do not face any significant impediments in the global market. Customs tariffs imposed by importing countries are generally low and do not pose a barrier, with the exception of specific cases such as the exorbitant fees imposed by South Korea on Sudanese sesame imports exceeding quotas. (13)Sudan enjoys preferential treatment in most industrialized markets globally, in addition to its membership in regional free trade areas. This preferential treatment has facilitated the export of sugar to the European Union and Kenya. In the case of Sudan, diversifying its exports, especially manufactured goods, would be beneficial to the economy, even though many countries increase tariffs as industrialization progresses. (14)The study focused on the tariffs applied to Sudanese imports, noting that their categories represent a form of import restriction. The current average is around 20 percent, and while this figure is significantly lower than the protectionist measures imposed before the 1990s, it is still higher than the tariffs imposed by a vast number of developing countries. (15)The study concludes that these high tariffs hinder exports because they encourage producers to sell in the domestic market rather than exporting. They also discourage producers from using imported inputs needed to increase productivity and develop their capacity to integrate into the global value chain. (16)The study also clarified that the measures taken by some countries to the anti-export bias, such as that exhibited by free zones, has not yet proven successful in Sudan. Furthermore, numerous fees limit the competitiveness of Sudanese exporters in global markets. (17)The study clearly states that the competitiveness of Sudanese exports is constrained by low productivity. Productivity in agriculture and livestock production is lower than that of other developing countries, particularly in the south and west of the country. (18)The study attributes this situation to the scarcity of resources available for agricultural research and extension services. Most industries suffer from dilapidated assets and idle capacity. Two sources of capital are needed for investment in modern technologies to increase productivity: foreign direct investment (FDI) and loans from local banks. However, currently available capital has been allocated to sectors benefiting from oil revenues, such as construction and retail. (19)There is now an urgent need to increase investment in agricultural research and extension services, and to transfer technologies that can help increase the productivity of exportable crops and livestock, such as cattle, cotton, peanuts, gum arabic, sesame, sheep, and sorghum. This highlights the importance of financial assistance from donors to support these efforts. (20)On the other hand, the exorbitant transportation costs and the continuous decline in the value of the Sudanese pound against foreign currencies limit Sudan’s competitiveness. (21)Perhaps the most unfortunate aspect of this is that the fees levied at Port Sudan are the highest in the region, and ships may be delayed for five to six weeks before unloading their cargo, further increasing costs. We must also consider that the lack of global logistics services has prevented Sudan from benefiting from the container shipping revolution. Furthermore, there are the long marketing channels required for exported goods to reach Port Sudan, in addition to the fact that the infrastructure for facilitating transportation is still undergoing rehabilitation in the north and central regions. (22)The continued depreciation of the Sudanese pound, which increased by approximately 2000 percent between 2006 and 2026, is reflected in a decrease in exporters’ net profits. This necessitates an assessment of the real exchange rate that supports competitiveness and prevents the dollar from becoming a commodity that generates higher profits at less effort.