Sudan is buffeted by civil war, chronic political instability, adverse weather, high inflation, a drop in remittances from abroad, and counterproductive economic policies. The private sector's main areas of activity are agriculture and trading, with most private industrial investment predating 1980.
Industry mainly processes agricultural items.
Sluggish economic performance over the past decade, attributable largely to declining annual rainfall, has reduced levels of per capita income and consumption. A large foreign debt and huge arrearages continue to cause difficulties. In 1990 the International Monetary Fund took the unusual step of declaring Sudan noncooperative because of its nonpayment of arrearages to the Fund. The government implemented a comprehensive economic reform program in 1992 that included slashing the fiscal deficit, liberalizing foreign exchange regulations, and lifting most price controls, but it had backtracked on most reforms by mid-1993 because of its fear of generating a domestic backlash. The government's failure to pursue economic reform, its continued prosecution of the civil war, and its growing international isolation have led to a further deterioration of the non-agricultural sectors of the economy during 1993.