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. Agricultural, cotton and peanuts being the major exports. Vast distances hinder developments. Civil war and collapse of the economy have stopped irrigation schemes and exploitation of southern oil deposits.
Industry mainly processes agricultural items.
Sluggish economic performance over the past decade, attributable largely to declining annual rainfall, has kept per capita income at low levels. A large foreign debt and huge arrears continue to cause difficulties. In 1990 the International Monetary Fund took the unusual step of declaring Sudan non-cooperative because of its nonpayment of arrears to the Fund. After Sudan backtracked on promised reforms in 1992-93, the IMF threatened to expel Sudan from the Fund. To avoid expulsion, Khartoum agreed to make payments on its arrears to the Fund, liberalize exchange rates, and reduce subsidies, measures it has partially implemented.