The development of modern manufacturing received little direct
encouragement in Sudan during the condominium period. British
economic policies were aimed basically at expanding the production
of primary products, mainly cotton, for export. Imports and traditional
handicraft industries met the basic needs for manufactured goods.
Indirectly, however, the vast Gezira Scheme cotton-growing project
induced the construction of ginneries, of which more than twenty
were in operation by the early 1930s. A secondary development
was the establishment of several cottonseed oil-pressing mills.
During World War II, small import substitution industries arose,
including those manufacturing soap, carbonated drinks, and other
consumer items. These operations did not survive the competition
from imports after the war's end. Foreign private interests invested
in a few larger enterprises that included a meat-processing factory,
a cement plant, and a brewery, all opened between 1949 and 1952.
At independence the Sudanese government supported an industrial
development policy to be effected through the private sector.
To facilitate this process, Khartoum adopted the Approved Enterprises
(Concessions) Act of 1956, to encourage private Sudanese and foreign
investment. The act placed few restrictions on foreign equity
holdings. By 1961, however, the government had concluded that
the private sector lacked interest or funds to establish enterprises
important to the national economy, and so it entered the manufacturing
field. The first government project was a tannery opened that
year, and this was followed in 1962 by a sugar factory. In 1962
Khartoum formed the Industrial Development Corporation (IDC) to
manage government plants. During the decade, several additional
government enterprises were built, including a second sugar factory,
two fruit and vegetable canneries, a date-processing plant, an
onion-dehydrating plant, a milk-processing plant, and a cardboard
factory. During this time, the private sector also made substantial
investment, which resulted in factories making textiles and knitwear,
shoes, soap, soft drinks, and flour. Other private enterprises
included printing facilities and additional oil-pressing mills.
Among the largest private undertakings was the foreign-financed
and foreign-built oil refinery at Port Sudan, which opened in
1964. Well over half the private sector investment during the
decade came from foreign sources.
Government participation in the manufacturing sector increased
dramatically after the 1969 military coup and the adoption of
a policy aimed at placing the country's economic development in
government hands, although private ownership continued. During
1970 and 1971 Khartoum nationalized more than thirty private enterprises.
In 1972, however, to counter the drop in foreign private investment
that followed, Nimeiri announced that private capital would again
be accorded favorable treatment, and the government passed the
Development and Promotion of Industrial Investment Act of 1972,
containing even more liberal provisions than precoup legislation.
As the economy remained dependent on private capital, as well
as capital investment from developed nations, the government incorporated
further incentives for the favorable treatment of such capital
in a 1974 revision of the industrial investment act, and added
provisions against arbitrary nationalization. Moreover, in 1972
Khartoum denationalized some enterprises nationalized earlier,
and returned them to their former owners under an arrangement
for joint government-private ownership. One of the largest of
these enterprises was the Bata Shoe Company, which was returned
in 1978 as a reorganized joint company in which Bata held a 51
percent interest and the government 49 percent. The most successful
such enterprise, however, was the Bittar Group, which in 1990
had become the largest undertaking in Sudan. Begun in the 1920s,
nationalized in 1969 but returned to its owners in 1973, it has
diversified into products ranging from exports of vegetable oils
to imports of wheat, sugar, and insecticides. The firm has been
active in a wide range of projects involving agriculture, electricity,
and such industrial products as household and office equipment,
soap, and detergents.
Throughout the 1970s, the government continued to establish new
public enterprises, some state-owned, others in conjunction with
private interests, and some having foreign government participation,
especially by the Arab oil-producing states. The new plants included
three sugar factories, among which was the Kinanah sugar-milling
and refining factory; two tanneries; a flour mill; and more than
twenty textile plants. A joint venture with United States interests
built Sudan's first fertilizer plant south of Khartoum, which
was in operation by 1986. Private investment continued, particularly
in textiles. About 300 million meters of cloth were produced annually
in the 1970s, but output fell to 50 million meters in 1985. In
1988, the textile industry functioned at about 25 percent of capacity.
The latter figure reflected the effects of the civil war, the
dearth of hard currency for spare parts to maintain machinery,
and the debt crisis.
Since independence Sudan's modern manufacturing establishment
has emphasized the processing of agricultural products and import
substitution. The production of foodstuffs, beverages, and clothing
has accounted for a large part of total output. Significant import
substitution industries included cement, chemicals, and dry battery
manufacture; glass-bottle-making; petroleum refining; and fertilizer
production. In the late 1980s, estimates of the contribution of
modern manufacturing to GDP varied from about 7 to 8 percent a
year, including mining (compared to about 2 percent in 1956).
Employment in the sector had risen during that period from possibly
9,000 in 1956 to 185,000 in 1977, including wage earners in government
enterprises. Almost three-quarters of large-scale modern manufacturing
was located in Al Khartum, attracted by market size, higher per
capita income, better transportation and power infrastructure,
and access to financial and government services.
Total manufacturing output, however, had not met expectation
by the end of the 1970s and steadily declined in the 1980s. Overall
output in some subsectors had grown as new facilities began operating,
but the goal of self-sufficiency had generally not been attained.
Shortages of domestic and imported raw materials, power failures,
transportation delays, lack of spare parts, and shortages of labor
ranging from qualified managerial staff and skilled workers to
casual laborers had been drawbacks to effective operations and
increased output. Losses of skilled labor and management to the
Persian Gulf states have been particularly debilitating. In the
1980s, many factories operated below capacity--frequently at well
under 50 percent of their potential. In some instances, low production
also was related to poor project planning. For example, the government
cannery at Kuraymah in Ash Shamali was already constructed when
scientists found that the surrounding farming area could not produce
the quantity of crops the plant could process. The milk-processing
facility at Babanusah south of Khartoum had a similar record of
poor planning. Efforts to improve the transportation and power
infrastructure, whose deficiencies have been major contributors
to the manufacturing problems, and rehabilitation of existing
plants were among the basic goals of the 1977-82 Six-Year Plan
of Economic and Social Development (see Economic Development;
Foreign Aid , this ch.). That plan was never effectively implemented.
Some progress has been reported, but in 1990 the production problems
faced earlier by manufacturing persisted.
Data as of June 1991