The Determinants of Foreign Direct Investment in Sudan(1990-2000

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Abdal Rahim Alhassan Mohammed, Osman
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The purpose of this study is to examine whether the Sudan has the ability and capability to attract foreign direct investments. The study focuses on the determinants that have been most significant in attracting FDI Inflows The study used both historical and descriptive methods to analyze the current stance of Sudan with respect to the general set of determinants of FDI. The result, although Sudan has improved in a number of FDI determinants, a lot is still needed to be done in order to make the country more attractive location. As regards the national policy framework, advances have been made towards ensuring more economic stability as well as general trend towards more open trade regimes. However, the privatization still does not seems to be attractive for foreign investors, and perhaps the most distressing factor on the Sudan economy is the continuing civil conflict and political unrest. As for business facilitation, Sudan has made continuous efforts to improve the business environment for foreign investors. As regard macroeconomic policies Sudan is seriously lagging in policies behind many developing countries. Sudan market (measured in term of GDP) is still relatively small. The long-term growth in the market is lagging behind other developing countries. With respect to resources, Sudan still to a large extent natural resource ridden. The poor and deteriorating quality of its physical infrastructure and the low level of skills in the labour market also characterize Sudan. Both factors contribute to the low levels of productivity and relative high production costs. The fact that Sudan has not succeeded so far in establishing strong regional integration frameworks contributes to that the country is not being attractive for efficiency seeking FDI. On the bases of these findings the study most important recommendations are: Sudan government should be transparent in pursuing its policies. Sudan should impose quality standard to comply with the international market requirements. Sudan should strengthen the relation with the international and regional economic groups and the Regional Trading Blocs (RTBs) in particular, COMESA and WTO
93 Pages
The Determinants of Foreign Direct Investment in Sudan(1990-2000