Saudis Shying Away from Sudan as Currency Issues Linger

The widespread implementation gap of Gulf agro-investments that I discuss in Oil for Food in the eighth chapter continues.

Riyadh-based Hadi Property Investment firm has put an investment on hold that it has considered with a Turkish partner, citing the inability to repatriate profits.

Theoretically a repatriation of 60 percent would be allowed, but as a result of Sudan’s plummeting currency there is a constant shortage of hard foreign exchange and the official exchange rate is not attractive.

Currency weakness is to persist as oil production has been lost with the independence of South Sudan. Both sides engaged in renewed military conflict in 2012 over oil fields and transit fees. The agreement over oil transit fees, that had been reached recently has become brittle again.

Thus, Sudan’s currency remains weak and it is unlikely that the government will receive as many cash infusions from Gulf states as it hopes for.

The project of Hadi eyed the production of  wheat, soya, sorghum and animal feed in Sudan’s northern state. The Sudanese state pushes projects in this area with capital intensive center pivot irrigation schemes.

Yet beside the currency issue, there are numerous other problems (see Oil for Food ch. 6), associated with maintenance, infrastructure and water.

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