The Impact of Oil on Sudan Economy (1999-2009)

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Moatz Mahmoud, Mohamed
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This research investigates the impact of oil on the Sudan economy. It endeavors to know this impact. The research adopted the panel analysis approach, on the consideration that the GDP per capita growth, is the stand for economic growth, beside the other dependent variables, which explain the economic growth, the contribution of the oil exports in the GDP and degree of openness, investment and the final government consumption expenditure, it is inevitable that the entry of the Sudan, in the circle of the oil-producing states, would have an impact on the Sudanese economy. Therefore, the research problem rotate around the following question: Did oil cause rotate a positive impact, on the Sudanese Economy?. Also this research, had presented a theoretical an empirical framework, for analyzing the hypothesis of curse of resources, in the Sudan, the symptoms of the Dutch Disease, the interaction between oil and final government consumption expenditure, all these was investigated, on the basis of a critical view. The research depended on the secondary sources for data collection; such as the reports of the Central Bank of States, the World Bank and the International Monetary Fund (IMF). For testing the hypothesis, the research used the following tool: the Ordinary Least Squares Method, for the analysis of the variables of the research. The results were positive, when the research tried to isolate of oil, on growth. There was also, a further positive impact, when the variable of openness was introduced. Likewise, the positive impact appeared, when the investment and final government consumption expenditure, were adopted respectively. The results showed that there is a negative relation, but is insignificant, between Oil and final government consumption expenditure. This means that there is no severely better Dutch Disease; or (the resources curse), in the Sudan. Yet, the experience of the Sudan, in the period 1999-2009; showed that there is a negligence of the productive sectors (agriculture- industry), with a major growth, in the services sector, which means that there was a greater growth in imports. So the research recommended the following: Caring for the oil and gold exports; and the use of their returns, for the development of the agriculture and industrial exports. The establishing of a development fund, in which a ratio of these returns of oil and gold, are ret ended for use in the agriculture and industrial infrastructural projects; regardless of (the results of the referendum) when various types of procedures could be taken; such as, the changes in tax law and government expenditure.
The Impact of Oil on Sudan Economy (1999-2009)