SUDAN’S INFRASTRUCTURE: A CONTINENTAL PERSPECTIVE Sudan already spends approximately $1.5 billion per year on infrastructure, equivalent to about 6 percent of its GDP. Two-thirds of Sudan’s spending consists of investment, with Chinese funds accounting for 40 percent of investment finance. Private investment in Sudanese infrastructure is also significant, at 23 percent of the total, while official development assistance (ODA) is negligible. In contrast to its peers, Sudan’s capital spending on infrastructure is strongly skewed toward the power sector.

A further $580 million a year (equivalent to 2.7 percent of GDP) is wasted due to inefficiencies, largely due to mispricing of power. Over 80 percent of these inefficiencies derive from the power sector. Electricity is currently priced at 50 percent of its cost-recovery threshold, leading to losses worth $378 million annually. The mispricing of power results in inefficiencies on the order of $380 million for the utility, while distribution losses are worth $106 million annually.

Sudan’s annual infrastructure funding gap is $2.9 billion per year, equivalent to almost 14 percent of its GDP. Most of the funding gap is associated with the water and transport sectors, each of which is more than $1 billion short of resources. But these gaps could each be reduced by half by judicious choice of lower-cost technologies for water and sanitation services and road surfacing. No funding gap is found for power, due to the relatively high level of spending in recent years and the magnitude of inefficiencies that could be captured to bolster sector finances.

To bridge the funding gap, Sudan could build on its existing success in capturing infrastructure finance both from China and the private sector. Sudan has done quite well in attracting about 1 percent of GDP in private investment for infrastructure; but a number of other African peers have done even better, capturing two to three times as much in proportional terms. Nevertheless, the largest funding gaps in transport and water may be less amenable to private finance. One option would be for Sudan to draw increasingly on its Chinese and Arab partners to support transport and water investments, and allow the private sector to play a larger role in the power sector, where it has not been active to date. Nevertheless, the funding gap remains substantial relative to the Sudanese economy.

# The continental perspective

The Africa Infrastructure Country Diagnostic (AICD) has gathered and analyzed extensive data on infrastructure in more than 40 Sub-Saharan countries, including Sudan. The results have been presented in reports covering different areas of infrastructure—ICT, irrigation, power, transport, and water and sanitation—and different policy areas, including investment needs, fiscal costs, and sector performance.

This report presents the key AICD findings for Sudan, allowing the country’s infrastructure situation to be benchmarked against that of its African peers. Sudan is a relatively well-off low-income state richly endowed with oil; therefore, both low-income and resource-rich benchmarks will be used to evaluate its performance. Detailed comparisons will also be made with immediate regional neighbors in the East African Community (EAC) and with countries in North Africa in some cases.

Several methodological issues should be borne in mind. First, because of the cross-country nature of data collection, a time lag is inevitable. The period covered by the AICD runs from 2001 to 2006. Most technical data presented are for 2006–07 (or the most recent year available), while financial data are

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