Public Disclosure Authorized

I RFSTR!GTE D

LLE COPX|- Repo r o.AS-64a

N

This report was prepared for use within the Bank. In making it
available to others, the Bank assumes no responsibility to them for
th n2rrirnr%i nr rnmnlitonecc nf tho infnrmatinn rcntainedl herein.
Public Disclosure Authorized

1 INiTERNAi ITOLNAL BA NK rFO RSIJECONTni RUCT IOJiN AtLN DI L,V rEVELOPMiVE1N T

THE ECONOMY OF THE SUDAN

Public Disclosure Authorized

MAIN REPORT
Public Disclosure Authorized

February 25, 1958

Department of Operations
South Asia and Middle East
 _
DV1~JN V D^r-rw1'.../IN
r i%- XTo

LS 1.00 = LE 1.00 . $2.8716

$1.00 _ LSO.345
1 ieddan a i.038 acres . 4,20u square metres

1 kantar of seed cotton o 3nI185 bs. _ ca. 100 lbs. of in

 TABLE OF COI]TE27IS

Page

I. Average Annual Rainfall

II. 1hin Agricultural Regions (Soils)
III. Principal Agricultural Products

CHLRTS AND GRAPHS

Foreign Trade - Total Value and Composition

Geographic Distribution of Foreign Trade
Value of Principal Imports and Exports
Cotton Ebcports by Destination

BASIC STATISTICS

SUMMARY AND CONCLUSOIO1 i-iii

MAIIN REPORT

I. Introduction ....... ...................... 1

Government and Administration ....... 1
Physical Features and Climate ....... 2
The People ...... .................... 3

TT. The Economv ........................... 4

Natural Resources . .................. 4
Manuifactuiring . ..................... 4
Forestry ...... ...... 5
TonA Potential 5
Animal Husbandry ...... ............. 6
Arn1ltal P. ....... 7
Foreign Trade and Balance of Paynents.. 9
Governmernt Finance . - -=-. i.-.
10
Currency and Banking ..... ........... 11
Trnsor..a.......-. .. - 12~

TTT. Recent Econoric Gro-,th ........................ I

The Rate of Expansion .... ........... 12
Financial Stability .- 4
Deficiencies in Cotton Marketing Policies 15
FIoreign,
Forei
v-cchnge
AL" lae 6
Io Re-sei-,es.1
vTe .,. . . . . . . ... 1

V. Development ProgrI,s anAd Priority Investment 17

Irrigation Projects .................. 18
The Rfu lwa±y-s ..........
....... .. .... ..

Electric Power ............ .......... 21

V. Creditworthiness .. ....................... 21
Future Economic Growth ............. 22
APPENDICES

STATISTICAL APPENDIX ....... ...................... 25a

Tables
1 - Area and Output of Cotton, 1946-1957 .... ..... 26
2. - .Expor+l
J and 1 I ces of Pw Cotton 27
0.................................aL....

2a - Gezira Board: Reserve Prices on Cotton ..... 28

3 te 4e A Breakd .s of G v r n w e u s ...........................
2
4 _ Classification of Government Revenues ....... 30
5 - L.4Uver.Lflh1ient P.LL cu ± ±I
rn. endlAJ Q1u.J. ±1 +0..LYJI ........................... ,1.

6 - Balance of Governmrent Income and Expenditure 32

7I- Gover,-e
ouverrximelu4 Expenditurs
ijj xjiUu±UUr.3
..... .................... 3
8- 1951-56 Development Program ......... ........ 34
- ca' CounciLLs ! 'Irivestuiit Z2penditure9 35
10 - Index of Volume and Value of Foreign Trade ... 36
I - Sudan?s Balance of International Payments 37
12 - Principal Liabilities and Assets of Banks
Operating in the Sudan .... ............. 38
13 - Gold and Foreign Exchange Reserves 1952-1956 39
14 - Breaksdown of Actual Government Revenues,
1948-1955/56 ............................ 40
15 - Service on Sudan's External Debt during the
Next Ten Years ..... .................... 41

NOTE ON ANTICIPATED GOVERNMENT REVENUES AND

RECURRENT EXPENDITURES ..... ................. 42

ANNEKES

A. Transport and Communications

B. Irrigation
C. Electric Powder
 M'Cr~~~~~~~~~~~~ r3A* l

g ~~~AVERAGE ANNUAL RAINrALLl

|L I B Y A !
i r9
|International EBoundartes-- - -*- * -< -
-; - - -95
- -i -of
X X XX
Provincial Boundaries -------
i /< :$'
RaUlwas -

)
25j,.

1100 Z) _ lnno~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.0

214 R4\ E / , 0

5 _ u _ ~~~~~~~~~
D-ei 2 ~ ~~~

w
JANURY958i Iwv. zuw zuu!,lv Iwviltw!wilu !bU, jvv aw lwv BRDB27^ IO.
 MAIN AGRICULTURAL REGIONS MAP

L I B Y A E G Y P, d

Internatlonai Boundarles _-- … - N . .

Provincial Boundaries- . \---\|

Railways

5,~~~~~~~o
I ~~~i - 6zt p

~~~~~4' I 0 J?~~~~~~~~~~~~~~~~~~~~~ ____ T HI 0 P I

4 L

W t2'"
I _________ '

U- '5s1 ' 'Deser t E T H OtP I A

| _ _ DeSertl-df ert
Pastoral Reg on
<'l 7

IrrIgated
Rlheraln Areas

QnvzSands v/i \/$ A

Central Clay Plains S /
- i Nortnern and Scsuthern' -
V Flood Platn Regiton
Ironstone Region JUDO
RMGreen Belt
iNot nLcluded eLsewhere, _ BELGIAN
I 7::!;: Mountain Regions
: ::A:: Sl(Not included elsewhere) tNG
' !uduo/l
*i t -) I_P"A--
Based on informatlon dated October 1953. N(UG A N D A
° 50 100 eo 200Mib K N

JANUARY 1958 IBRD-427 8

 g ~~PRiNCiP-AL AGiRICULTURAL PRODUCTS |

L I B Y A E G Y P/
,___________~ G___ r- p

International EBoundaries - -i ---------- -------- -----

Railways iDfJ eES&;

* '~~~~~~~--------
r.- T OS 9 Sinliot; SUdwn l~~~C"

0~~~~~~~~~~~~~~~~~~~~~~~~~A
' H /miSedrh

R EdDrN,^

i j ,-1 uT "<,0; WTSgi 8Don

t < .i
tR D
C A
U
,
\
oF L
b tF
#
FD (
r~~~~~~~\i
to.G,edKrerimov)
F / D IC
- GOATS To

| _ (15; Gene El Fash~~~~~~~~~~~~er.\Ors

< g \ Gondo-~Dt

I .\ GOATSELE - ZSTTLF _ / z) ff~Meo.e

PLJ/AS W

|~~~~~~~~~~~~~
| _s1 - c
Ir4ed---->j
, ------- =----
- A;}---
s /NE
X 6-------b ^
UNtNUJS O R
>~~~~UT
i
LAmeriegnR^C^nl ° * l U//J
NoJishot~~~~~~~~~~~~~~~~!

r1_ S 0 10 20Ml%- V/orier -Xv

L/[ I I I I I ,$ \ K ~~~~~~~~~~~~~~~~~
Y As rJ
JANUAMY~~~~~~~~~~~~~~~~~~~~~~~~~~~ 195 lo G-sh
 SUDAN
TOTAL EXPORTS AND IMPORTS
(MILLIONS OF EGYPTIAN POUNDS)
8 0 Y I T
I I II 1 180
YEARLYI
j IMPORTS
601 1 I I ,t I I/160
DOMESTIC EXPORTS - 1
40 4;;< X =-*-j-----1140

20 _ - __ _ ~~~~~~~~~~~~~~.......... ....... |ll|-2

COTTON AND COTTON PRODUCTSO O

1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957
QUANTITIES OF CERTAIN PRINCIPAL IMPORTS
(THOUSANDS OF TONS)
3001 YEARLY 1 1 F r 300

250 i 1 1- IK-- 250

_ _ _ L OIL AND OIL FUELS
200 I t I 1200

lsal I I EI i . I I I I 1~~~~~~~~~~~
15(
_ .f c ~~~~~COTTON aND

1001.•j4
,501
__ _-~,__ _-ARTIFICIAL SILK
A~
PIECE GOODS
f] .
SUGAR
/SIU.R
.!
.
100
I 4 t I| f I1- t sLOUAr FA lr%

|Q - _ =L t 8 | COFFEE AND TEA _ __ F 0

NT |

1947 1948 1949 1950 1951 1952 19531 1954 !955 I956 !957

QUANTITIES OF CERTAIN PRINCIPAL EXPORTS

(THOUSANDS OF TONS)
2001 I j200
YEARLY | . ,COTTON (SEED,OIL AND CAKE)
1501 1 V I .I7fr I.½ V/1 150

-- :--*- 1 - lCOTTON- *% |0 - /GROUNDNUTS

50t- 50

..... E SAII . ...... :si DR

1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957

1/30/58
1349 IBRD- Economic Staff
 SUDAN
SOURCE OF IMPORTS: VALUE (AVERAGE OF 1954,1955,1956)
(PERCENT OF TOTAL)
r M IR A I ,--
I Nnuq P l .-.
ACCOUNT S
5INNr OEEC SOVIET EGYPT OTHER
AREA AREA EUROPE AREA
60%1 1 1 160%

DU1 n u 111/0 1
I ~111111 OTHERS 1 1 130%
dr0- IU'J A fO

~ NDIA

20%/ 20%
l l «KINGD~~Om| ENELUX|

I0% = U.S.ND 10%

CANADA __C_ E[:7~~ _ _ _

oI. W ///// I rxAxX6! I j zrs.J NI j|*@*

j(-<j*3 - K1 . o
4H;>

DESTINATION OF EXPORTS: VALUE (AVERAGE OF 1954,1955,1956)

(PEM.RCENT OFr TOTAL)

-AMFPITAN
ACCO t) I tNINU
I I NON-qTFRLINGi
OEEC IN
I T
IEGYPT
1 OTHER
1
ACCOUNT AREAINI AREA
EA
RAREA
60%1 t t 160%

OTHERS|
En
v /o, = J Ui

400,kol 1||-1 1 1 140%

30%1 O;THERS 30%

20%_
/1 1 120%
U.S. AND KINGDOM
10%1 CANADA *10
JOTHERS I Ii F 6i

1/30/58
1350 laBRD - Economic Staff
 SUDAN
VALUE OF MAIN IMPORTS (AVERAGE OF 1954,1955,1956)
(MILLIONS OF EGYPTIAN POUNDS)

ILNSUMER GOODS

PIECE GOODS (COTTON, MIXED

COTTON AND ARTIFICIAL SILK) _____________

SUGAR

TEA

COFFEE

WHEAT AND WHEAT FLOUR

CIGARETTES AND OTHER
TOBACCO PRODUCTS
SPIRITS,.WINES AND BEER

SOAP

RICE

[FUEL

OIL, OIL FUEL AND KEROSENE

COAL

CAPITAL GOODS
VEHICLES AND
TR AN55P ORT EQUIPMENT

MACHINERY AND APPLIANCES

BUILDING MATERIALS

TIMBER

CEMENT I
PERCENTAGE DISTRIBUTION OF TOTAL EXPORTS:VALUE
(AVERAGE OF 1954,1955,1956)-
flhIA 1% OTHE 6%

HIDES AND SKINS 2%

{GROUNDNUTS
4% 01-COTTON 61%

LIVESTOCK 5%- .

COTTON SEED, COTTON SEED OIL

AkIR fftl err R -AC
9% O TOTAL: 51,077,000
GUM ARABIC w-io (EGYPIIAN .POUNDS)

1/30/58
1351 IBRD-Economic Staff
 SUDAN
EXPORTS OF COTTON TO VARIOUS COUNTRIES (AVERAGE OF 1954,1955,1956)
(THOUSANDS OF KANTARS)
A^^~~~~~~~~~~~~f
0 200 400 600 800 ~~~~~i, 0 0
,

GREAT BRITAIN

INDIA

ITALY

GERMAwNY

FRANCE

JAPAN

CHINA H
BELG!UM

I ETHIOPIA p

CZECHOSLOVAKIA

OTHER

1352 IBRD- Economic Staff

 BASIC STATISTICS

Area
Total area 1 million sq. miles
of which:
irrigated 2.45 million feddans (gross)
0.96 million feddans (cropped area)

Population
Total population (December 1955) 10.2 million
Rate oI natural increase (estimate) 2e5% per annum

ForeiFrn Trade (average 1954-1956, inclusive)

Domestic exDorts LS 51.1 million
of which:
Cotton and cotton nroducts 69.7%
Gum arabic 9.0%
Livestock & hides & skins 6.7V
Groundnuts 5.4%
Sesame
Dura 1.1%
Tmnorts LS OA million
of which:
Princ.inal consimer goods )41,

Principal capital goods

Flel 7.fno
Cement and timber l.8%

Balance of Payments (1956)

Exportsq of aoods TS 71-19 mi llion
Imports of goods LS 48.2 million
Balance offI trade TL 91 milliAn
Foreign travel(net) -LS 0.8 million

insurance (net) -LS l.4 million

GoverrnMe..nt (net) =LSq Oe7 r..iIionn
Donations (net) -LS 0.6 million
1T,A l (net) =LS' 2,1 -lIon
Total invisibile current transactions - LS 5.6 million
Balancenoono
A ..................
.5 + I T -CcI A n llio

Foreign Exc nne Resevres (1.7 DJceZ,.br 197)

Total external' assets LS 37.4 million
ofP A,-v,hc:
Held by Currency Board LS 12.1 mill.
Egyptian Accounts LS 12.3 mill.
Others LS 13.0 mill.

(1)
Public Finance (LS million) / 1956/57§"

Total government revenue 42.1 37.5

Recurrent expenditures 31.9 34.4
Surplus general budget 10.2 3.1
Development expenditures 8.4 5.0 (actual)
Balance 71.8 -1.9

IJIoney and Banking

Notes in circulation (October 1957) LS 23.8 million
Deposits (end of December 1956) LS 31.3 million
of -which:
Government LS 19.5 million
Private LS 11.8 million
Advances (end of December 1956) LS 22.9 million

a! Actual figures
h/ Budget figures

(2)
 qTfla?nAPV AMT rC .r'TTTc T1AMQSI

i. The Sudan has been virtually self-governing since 1953 and

made the rather sudden transition to independence with surprising

ease. Despite rapld Sudanization, the general standard of adm"inListra-
tion is high although there are certain deficiencies characteristic
of most -mderde;-eloped
co-untries. The governm,ent evidences a rathe.-
sound grasp of development problems and has followed a conservative
f4'nancial plicy. Prospects fo.L- the 111Lii 1.tdeLc of poU.LtLal s ilU.y
appear to be good.

ii. The Sudan is a large country with an area about a third of the
nTr_: ZX _ _c _ __J__
__ .en
_ __
n _%
m_-il-lion.10
'I 'I __: :__
z_ e
contiLnentallJ
_ _ :_ _ _
U ni t '7'dt:at:es andU a populationl
SeU of onl y atUIv 10
The country has ample good land available for irrigation and rainland
cultivation and the possibility of obtaining a considerable additionLal
supply of water from the Nile. The mineral wealth is probably small
albhough investigations have been inadeq-uate arid there is some e-vidence
that iron, copper, manganese and magnesite may be found in commercial
_ __L
*: : _ _ T_ _ __ _____ 1-- 1 _ __ _ __ _ -
quantitLies. In any evetl tihe country is not 1_ _ _ I __: 1 _ I_ _ __ _&- _
iaceu with uIsIt :pectlre- Ci)
_ Z

population pressure on available resources.

iii. In the postwar period rapid economic progress has been achieved.
The volume of foreign trade has doubled since the immediate prewar years.
Agriculture and animal husbandry have shown striking advances. The area
under irrigation and rainiand cultivation has significantly increased.
lIanufacturing industry has also grown, although it plays a relatively
small role in view of the more lucrative employment opportunities for
capital in agriculture. The Mission has estimated that real income in
the monetized sector of the economy has probably risen at an average
annual rate of 6g over the last six years. This has been sufficient to
permit an increase in the standard of living of the population which is
growing at an annual rate of around 2.5%. ITuch of the rise in output,
however, has been mobilized by the government in the form of substantial
budget surpluses which have been invested in further development. At
the same time there has been an improvement in health and educational
standards.

iv. The Sudan exports a large part of its output and imports nearly
all of its requirements of manufactures, fuel, timber and sugar. It is,
above all, dependent on cotton and cotton products which still account
for about 70% of total exports despite advances made in the export of
such other products as gum arabic, peanuts, sesame, livestock and hides
and skins. Although there are certain long-term prospects for greater
diversification and the government realizes the importance of moving in
this direction, cotton vwill undoubtedly remain the mainstay of the
economy. The country is well-suited to the growing of this crop and is
a low-cost producer. Sudanese cotton, primarily long-staple, should
 continue UU tZLIJUd
to aodt i±
IJUo uabr providd ouunlu prJ.i.nU1g PU±L±tie
are followed. In the postwar period there have been two temporary
:a
UepatuiUesb 1'Uro
-I _ _:__
suLIi po."U1UL, _ _
Ul
-| _- '1r%_1
1I1 1Y)4
--- I L1
.il1U UIle L5CUI1U
Z
111
-LL
nre" _
f
ml
LiIB
second proved quite costly even though in the end adequate remedial
mieasures were taken. Last year's experience has, however, left a deep
impression in the Sudan, and the Government is now planning to set up
a Cotton ivPrketing Board so composed as to provide some assurance
against the recurrence of such marketing difficulties.

v. The future should witness further rapid economic growth. Irri-

gated agriculture will expand greatly following the completion of the
Managil gravity scheme now under way and anticipated extensions of
pump irrigation. Rainland crops should also increase significantly,
particularly now that mechanical crop cultivation has been demonstrated
as feasible and highly profitable. Government revenues should rise in
line with these developments and should produce, even after allowing
for necessary increases in recurring expenditures, large surpluses for
investment and external debt service. At present the government has
only a negligible external and internal debt. The Mission believes that
exports will rise in 7 or 8 years to close to -S 90 million.

vi. The Mission has examined what fields of investment would have
high priority and has concluded that irrigation, transport and possibly
power deserve such priority; the Sudanese government has expressed a
desire for Bank financial assistance in the first two of these fields.

vii. The irrigation projects consist of (1) the Managil Extension to

the existing Gezira gravity irrigation scheme on which work is already
in progress, and (2) the construction of an additional dam at Roseiras
on the Blue Nile to impound 3 billion m3 of water for additional gravity
and pump irrigation. The cost of the Managil Extension is estimated at
AS 35.7 ($102.5) million, including .S 15 ($42.9) million in foreign
exchange; that of the Roseiras dam, at AS 35 ($100) million, with about
.AS 17-18 ($45.6_$48.2) million in foreign exchange.

viii. The Mtission reached a tentative Judgment, subject obviously to

more detailed investigation, that the Managil project would yield satis-
factory eeonomie and financial returns. There is a question; however,
whether the returns from the Roseiras project, if begun in the near future,
would not he too long delaved, particularlv since a grownng shortage of
manpower may make it difficult to expand the area under irrigation
ran-idlyl enough to utilize all the witer stored in the Roseiras reservoir
within a reasonable period. Above all, both projects involve an important
international issiie regarding the use of NilePater
River Neither
project could be carried out without ignoring the provisions of the 1929
NilP Wa+ters Agreemen+ wh;ih wCT rni rlAAd het.we.en t+hei Unit.edi Kingdom andi
Egypt and the continued validity of which is questioned by the Sudan.
Both Egypt and the Sudanr recognize the need for a new agreem..ent respecting
the rights of all interested countries and sporadic negotiations have been
4
h but no de n a-cr,.v ent has been reahed
 - iii -

ix. The country's transport services urgently require expansion.

The railways are virtually the only means of transPort; and they appear
well-suited to provide the cheapest form of transport since the country
produces in the main bulky commodities which must be hauled over long
distances. The present government railway network, which seems generally
well-managed, has been overtaxed as the result of the rapid expansion
of the economy. The railways have recently embarked on a five-year
program which involves the acquisition of more rolling stock, a beginning
with dieselization, replacement of some 50-lb. rail with 75-lb. rail and
the extension of railway service to the Managil area and to the West
and South. It would cost about AS 19.9 ($56.9) million, of which
approximately TS 14 ($40.4) million would be in foreign exchange.

x. Additional power generating and transmission facilities are

required primarily for the Gezira, an area undergoing rapid development.
There is at present a controversy whether the increasing power demand in
this region would better be met by the installation of a 15 MW hydro-
electric plant at the Sennar dam or bv a 20 MW steam station, or a
combination of steam and hydro facilities.
 I. Introduction

uovernment ancu auraras urablon

1. The Sudan, a country with a population of 10.2 million and an area

of almost 1 million square miles (one-third of the continental United States),
has been virtually self-governing since 1953 and completely independent since
the beginning of 1956. It is governed at present under a provisional consti-
tution which provides for a cabinet responsible to parliament and a commission,
exercising nominal executive powers, of 5 members. A new constitution is
to be adopted following the elections at the end of February 1958.

2. The political situation appears to be stable. There was an easy

transition from the government headed by Ismail El Azhari, which piloted the
Sudan to independence, to the present government headed by prime minister
Abdullah Bey Khalil. The current government represents a coalition of the
Umma party and the People's Democratic party which are in turn largely
dominated respectivelv by the Ansar and Khatmia sects, the two most
prominent Moslem sects. Despite the current hotly contested election
campaign. obiective outside observers generallv aeree that the nolitical
situation or policies of the government will not be very much affected by
the outcome of the elections.

3. Tn aeneral thp noiintfrv *r1n not. haenve n

sqriou n siological
onnomc andnn
problems which would tend to endanger political stability. There is no land
hungDer, and there has been no pre-emption of large landholdings by influentia1
people. While there are considerable disparities in income, these are
smaller and less eviddnent
vnri t-1qh.atg
in
±ora-eVmntri...Qr nrlarl1 Rrnlr,itti nn
by landlords is relatively rare. WThile much of the land is farmed by tenants
+.the
govrprnmen+. enseqisc a failr eniti+alel sarnn of the output betweJn
landowners or entrepreneurs and tenants. Standards for such sharing have
been set in the gover-m-et-m-anaged cottorgrowing schemes hich are generally
regarded as models of their kind (see Annex B).

4. The country has a special political problem in the administration of

U11 I%,AL.±±L ±elavilL U..JL. L1Ur.LU v'.~L±uv U.L AAJ.; .JI1 . Ji 1±.Lt L±UV dCJj-JedU.L UIJ

have a vivid memory of former slave-raiding by the people of the North.

1Iithy w-ere directily adULinisteireu b.y tJhLl DJ.± andL whieln ithela1tt,- wicWiLdu-w-W
in 1955 there was an uprising in the police and army forces of the South.
Order was promptly restored, howe-ver, and the regio-n has remained quiet
since that time. The government appears to be aware of the need for tactful
handling of this situation.

5. The Sudan consists of 9 provinces under governors who are appointed

by the Ministry of Interior and are responsible for the coordination of all
 - 2 -

central government staffs and activities in their jurisdictions. In nearly

all of the Sudan local government is now in the hands of rural and municipal
councils, three-quarters of whose members are elected. Certain central
government taxes, including the land and animal taxes and the property tax
in cities, have been assigned to these councils. Other revenues consist of
locally levied fees and charges.

6. Despite the rapid Sudanization attendant upon the achievement of

independence, the standard of administration of the Sudan is comparatively
high. The top officials at the national and provincial levels. who were
trained under excellent British civil servants, are generally very competent
and realistic in their approach to the country's problems. As in other
underdeveloped countries, there are still serious deficiencies. Rapid
promotion of the most able officials has left a large void in the middle
ranks of the administration.

7. Above all, the quality and number of people in the technical services
of the government leave still much to be desired. While Sudanization was
not for the most part enforced in these services, most British took advantage
Of the generous tArms of cnmpensationn available upon repatriation to resign
and start careers elsewhere. The government has made intensive efforts to
finrd replacemn.nts by recruiting a considerable number of technical people
in many foreign countries and by training Sudanese both at home and abroad.
-Afll4le thisadrie h-- -ad a consderable m-a-,-- of success, -ere haa
inevitably been some deterioration in the technical staff. 1
This is parti-
cu,lar.ly true of agnric,ulQal researclh, o.P -i+t mr,ron+ t the

country.

Physical Features and Climate

8. The Sudan consists for the most part of a plain or plateau rising
gradually in elevation from north to south and westward and easuward from
the Nile River valley. In the east this plateau is separated from the Red
C! -- - - -- 1 -1_ 1-ll 5 nre _ rfeet::
e__4. _ 3 -___ T_ X1_4._ -
S:ea bUy an Ueapm U Ien-fhlls -risin , allUd m-. In1 thie w estu central
region the Nuba lbuntains rise out of the plateau, and farther to the west
there' L6 Uh,e IJeblU. Marra rarL1,e-tJwhich0 dUUdi"1.s U-n Fz:leVatioLQ1 ofL _11,000J fee.
The only other important mountain range are the Imatongs on the Uganda
border.

9. The country lies in the suDtropical and tropical zones. The northern
part, comprising almost half of the area, consists of arid or semi-arid desert.
The average annual rainfall ranges from virtually none in the extreme north
to 7 inches at Khartoum and 40-50 inches in the south (see Map 1). The rainy
season lengthens as one proceeds toward the south, with that in Khartoum
extending from May to October and that in the south from March to December.
There is a rather wide fluctuation from year to year in both the total and
seasonal incidence of the rainfall.
 -3-

The Peonle

10 The nopulationj which is probably inereasing at an annual rate of

around 2.5%, is racially extremely heterogeneous. It consists basically of
aboriginal peoples of Naegro and Sem.tic snck with
.rvnrriricp admnixftures nf'
Arab blood. Tribal affiliations are still very important in many parts of
+.the Suldann The Sout+.h isQ e-n+.tri1r nponla+.tre hdr
by erop.es - t-he Miln-_nnmi n
tribes of Equatoria and the cattle-owning Nilotic tribes inhabiting the
edges~~~ Uppe Iof
il mase-nte
-h -- 3pr.le -r Bah.r el Gshaza- provincs
The population of the South, which is predominantly pagan, is still rather
prir tie -a - few
4a ,at 1ants.

11. Owing to progress in sanitation and a considerable expansion of

Ihea lthI facili± ties , 1t-JRULi
U s Ut1L1UMFU U.L th-vUL
Lheith ULJLLLo1 hasiJkJroved
Lalto noULtbJLy.

The average mortality rate, however, is still probably well over 25 per
thousand; and the infanit mortality rate probably ranges between 45 anld L15
per thousand. Bilharzia, malaria, hookworm, tuberculosis, trachoma and
enteritis are endemic diseases, although considerabie success has been
achieved in reducing their incidence. The country has 55 hospitals with a
total of about 10,000 beds or one bed per 1,000 in the population. with
only 1 doctor on the average for 37,000 people, there remains an acute
shortage of medical personnel.

12. Probably no more than 5% of the adult population has ever been to
school. The extent of educational progress achieved in recent years is
indicated, however, by the fact that about 17% of school-age children are
now attending school, with the proportion in elementary schools notably higher.
In 1957 there were 234,806 children in elementary schools, 28,094 in inter-
mediate and 7,511 in secondary schools. Higher education is provided by the
University of Khartoum which last year had a total enrolment of 839 and-
graduated 133. However, of the total enrolled only 44 were studying
engineering and about the same number agriculture. The University has seven
faculties - arts, science, law, engineering (civil and mechanical), medicine,
agriculture and veterinary - and has a staff of 133 of whom all but 32 are
foreigners. Even the secondary schools are still largely staffed by
foreigners.

13. The government has been fearful that a continued expansion of general,
academic educational facilities might create unemployment among school
graduates, particularly when the needs for government personnel will have
been satisfied. To counter this possibility and at the same time cope with
the acute shortage of artisans, technicians and engineers, it has placed
increasing emphasis on vocational and technical education. In the agricultural
field farm training is provided at two farm-training centres in the Gezira,
secondary education at the Agricultural Institute in Shambat, and higher
education in the University. The Khartoum Technical Institute, which is
well-eauipped, provides 3-year post-secondary and 4-year post-intermediate
courses in civil, mechanical and electrical engineering, arts and commerce
in which 400 to 500 pupils are enrolled. In addition it conducts evening
classes with an enrolment of about 2,000 for the upgrading of artisans, and
supen*visses 514reUU
nLtda: waiu 3 pU? i tV-±LJur.iIe_iate U LL;c Lscol wIiWh

a total enrolment of about 1,700 for the training of artisans. The i'finistry
of Social Afairs ±L a±so tar-ting a vocational centre or the training of .-
mechanics, machinists and plumbers who are in especially short supply.

14. Despite a rather rapid increase in output, the standard of living of

the people is Stili rather low. Tnere are no figures on national income, but
the average per capita income is generally believed to be between IS 20 and
25 ($57 to $71). The general average is undoubtedly depressed by the low
subsistence ircores of the nomadic tribes in the west, east and north and of
the negro tribes in the south. The daily wage of unskilled labor normally
ranges from 20 to 25 piastres (LB 51-570), with seasonal agricultural labor
getting considerably more. Housing, particularly in the rural areas, is poor,
partly because under prevailing climatic conditions there is little incentive
to lavish attention on better housing.

II. The Economy

Natural Resources

15. The resources of the countrg are primarilv agricultural - land and water.
An insignificant quantity of iron ore, manganese, mica and gold is produced.
There are no int i ations of great mnneral weal th al thonuh i nvst_ gatA c)ns in
this field have been far from adequate. The current exploratory work carried
on hy +the Greologic?- .011'1Tr17r TSveny1-.+m0Tnav.
1ncas indited = +.he presenc in posqibhlv

commercial quantities of high-grade iron ore and magnesite in the Red Sea
Hills and of copper, together rwith uranvim, in the Uofrat+ en Nahas district
on the borders of the provinces of Darfur and Bahr el Ghazal. Exploratory
'
V'J.. .L is.tJsevrely h.andicapped hoflSJ
w~CJ
Ve, by-' a. ------- of' tra.Ined sta-ff.* T'

prospecting for oil has taken place; the granting of concessions for this
purpose 4s t1h
await er.acUmt Uo a rini. Law.

M r ,,f'n -+I,-, i

16.
IA)
LJIL ?,A-anP--4--4-
A. U.L.1J role
1 . Itfcue
J..LO.,y
.le LU Lu.LasI-
.t-
CO. ~Yyto'asmail
tpcal
-4af
u VIJ.L.LLY
tUYjVA.'C.L.LJL 0 -L-

on the processing of agricultural products such as ginning and oilseed pressing,

on simple conus-ariers'goods such as beverages, soap and confectionls, and on
building materials. A factory in Khartoum makes bottles and lamp glass; and
a srnall cotton textile spinning and weaving mriill in the south works oUn locally-
produced cotton. A modern meat canning plant at Kosti has been temporarily
closed. Total industrial employment, including that in repair servi
(except the railway workshops) probably does not exceed 15,000. It is
ces
significant that the four most important factories which have been established
in the Sudan - a cement plant, a brewery, a meat factory and a canvas shoe
factory - are all entirely or almost entirely foreign-owned. Sudanese
capital has for the most part been unwilling to invest in industrial enter-
prises in view of the lucrative investment opportunities in agriculture,
commerce and, to some extent, real estate.
 -5-

Forestr-y
-1A- .1 .1- - C, - --
7. Altho-ugh ue S-udan is sUpposBeU :Iave
hU aU30U 175),JUU square rILLJUi of

'1nroductive forest", much of it supports only a thin and scrubby growth. The
dominant tree species are various types of acacias, althougn in the south
there are mary broad-leaved types including mahogany. Deficiencies of quality
and quantity, aggravated by the inaccessibility oI some forest areas, maKe
the country almost wholly dependent on imports for sawn timber. Domestic
cutting concentrates largely on firewood, telephone poles and railway ties.
The government appears conscious of the importance of forestry both as a source
of timber and as a means of soil conservation. About 2 million feddans have
been put into forest reserves with the objective of protecting them against
fire, grazing and overcutting. Since L946 about 3d,000 feddans have been
afforested, with the current annual rate reaching 5,000 feddans. A number of
exotic species including teak, eucalyptus, and, in the Lrnatong Mountains,
even coniferous softwoods are being introduced.

18. The most important forest product of the Sudan is gum arabica which
is tapped from an acacia tree (principally Acacia Senegal) growing wild over
a zone about 150 miles wide stretching across the country from east to west.
In recent years this product has accounted for 13% of the country's exports.
Most of the gum arabica goes into confections, but it is also used in
adhesives, waterproofing emulsions, textile sizings, insecticides, and a
variety of pharmaceutical products. The rising unit price and export volume
of this product, of which the Sudan produces 70% of the world supply, points
to an expanding demand.

land Potential

19. The Sudan has a plentiful supply of good land for cultivation and
grazing. The main soil types are shown on Map 2. The most important agri-
cultural area consists of the wedge-shaped and fertile clay plain widening
toward the east. This plain accounts for virtually all the cotton grown in
the country. North of this plain in Kordofan and Darfur provinces lies the
so-called iIqozI area of sandy soils mixed to some extent with clay and suitable
in part for the cultivation of peanuts, sesame and watermelons. The South -
Equatoria and part of Bahr el Ghazal - has for the most part rather poor
soils. nonsisting of ironstone or laterite.the fertility of which is quicklv
depleted unless the humus content is constantly replenished. In the extreme
souith honwnvr_ there are areas of dPeep soils suitable for noffee. nacao and
other tropical crops. While a thorough survey of land potential is still to
be maeqej it has hepn estimatecd that about 18i million fedians of' good land
are available. In the central rainlands alone there may be close to 75 million
feddans. Probably no more tnan 7 mnillin feddns are atuallyr uindr cu1ltivu
tion.

20. The effective use of all this land potential is limited by the shortage
4
of drinkA.Lg wza+a.r for 11=u,an and vestock consmpt on. For this ran
government has been pushing a program for the development of ponds or "hafirs"
with.1 pro-Utecuted rarAcatc;vXen undergrotund water resources.Th
and of-P
 - 6 -

construction of hafirs, of which there are now some 400, is concentrated

mainly in the clay belt and is now proceeding at the rate of close to 60
per year. The development of underground water through well-drilling
focuses on the sandier areas. There are 70 deep wells now in operation
and the current program calls for an additional 10 each year. The program
suffers, however, from a severe shortage of geologists capable of undertaking
the necessary exploratory work. The government is aware of the need to
accelerate the whole program in order to prevent overgrazing and to expand
the area under cultivation.

Animal Husbandry

21. Pbst of the land is used for grazing and supports a large livestock
population. The latter includes 6-7 million cattle, an equal number of
sheep, some 6 million goats and 2 million camels. Animal husbandry is
carried on quite independently of agriculture by nomadic and semi-nomadic
tribes. Mixed farming is virtaually non-existent. IMost of the cattle are
owned by the Nilotic tribes of the Upper Nile and Bahr el Ghazal provinces
and by the Baggara Arab tribes of Kordofan and Darfur. The cattle population
has been increasing rather rapidly over the last decade, primarily as a
result of a successful and large-scale program of vaccination against
rinderpest and pleural pneumonia. ltich of the cattle are rather poor,
however; and the government has only recently begun to experiment with the
upgrading of livestock through selective breeding.

22. While the number of cattle slaughtered has risen slowly and the
number of livestock exported has increased from 143,773 in 1950 to 246,398
in 1956 (valued at IS 1788;8l3 and IS 2 -753.382 resnectivelv). it is evident
that the contribution of animal husbandry to the economy is far inferior to
that which might be expected from the large livestock population.
Unfortunately the Nilotic tribes and to some extent even the Baggara
trihes eonsider cattle as a form of wealth with whieh they are very loath
to part. This was probably the principal reason for the temporary closing
in th.e past year of the modern meat-canning plant erectedhy the BritMsb
firm Liebig in Kosti. Although this plant was set up to process 50,000
cattle per
uyear, the highest total achieved in the five seasons it oprted
was only 30,000 and the annual average was 15,200. 1/ The fact that cattle
frequentlyr'i
.rnv ton
be l-^ier le-orr d-sta+nces*it
vresut losses~inr.qualit
and weight has been another serious handicap in marketing.

1/ The closing of the factory was also due to a number of other factors
including poor cattle purchasing policies, the loss of imperial preferences
on the U.K. market and the high cost of packing materials.
 -7-

Aqri culture

23. Both rnin-fed Iand 2nd irri gted lanci are m31tivat.Pr About 1 million
feddans of good clay soil in the Gezirais under gravity irrigation from the
Sennar rservrnir on thp B_ue Nile; and a roughly Armiv.41Pnt area is u-ndr
pump irrigation. Some small areas on the Hain Nile in the North are under
flood irrigation; and in the southeast there are two inland delta areas known
as the Gash and Tokar deltas which are flooded each year by non-perennial
streams. (See gn?rv- B) r-r v-tir+uia11linllthi irrigated and flnnlo area
long-staple cotton is grown as the principal cash crop in rotation with dura
(a millet) and li,ia (a leanie) as subsistence food and fodder crops for the
tenants. The total cropped area under irrigation is about 960,000 feddans of
ich anrol-nd 4 ---0 -ravity
i A -rriga
C-i-- tlo
scheme and solme of the pump irrigation schem.es are under governm&nt management;
an
~.CCA rv
.L VV
Ci
te
Ub
pu pn
l5
iJCALUjJ.L.CJ~
s4l- ..
10 4-
0..
G UL
S D
:
.D UJ
_-
s V
- - - - - -tt-
1JiL 1A
U
-14 __s -- A
1L.DCAOWO.A1 DVI..' V

with respect to water use, cropping patterns, selection of tenants and

apportiorment oc p eeds

~L4.. ULLL~LV~LLULI
CU4. tlvat1ior1 1in ujie
±LL uthe ce_nual
IL~±~.± rair'1LUands,:
± LLLL.LU, suate
.± _L .LA UlU btenhe
UC LWCC±i UJIC ,00
JtCJUU1 nr
and vOO mm. isohyets, has made rapid progress over the last decade, although
the variabiliXt,y of rainfall mak es It Inevitably muca more hazardous tuha
irrigated agriculture. Over most of this area shifting cultivation is
practised, and crops are sown without preliminary plowing. In part of th1e
clay belt weeds are controlled and the soil is to some extent re-fertilised
by the practice of "harig" cultivation which involves the burning of dry
matted grasses accumulated during several years shortly after weeds have
sprouted following the beginning of the rains. In recent years mechanical
cultivation has spread rapidly owing to the shortage of labor. The government
has led the way by initiating pilot projects, surveying land suitable for
such cultivation and allotting 1,000-feddan plots to applicants against
nominal rentals. The land is disced and sown by agricultural "ientrepreneurs"'
who own tractors; and the weeding and harvesting is done manually by tenants.
After certain initial difficulties arising primarily out of the problem of
selecting suitable tractors and implements, mechanical cultivation has become
a conspicuous success. Last year some 400,000 feddans were under mechanical
cultivation in the Gedaref district northwest of Kassala and an area of
40,000 feddans was being developed in the Dali district west of the Blue Nile.
Pilot projects are under way in several other parts of the country. The
yields obtained with mechanical cultivation in the clay belt are far superior
to those obtained with the customary methods. In a normal year the profits
from a 1,000-feddan allotment are apparently sufficient to pay the entire
cost of the tractor and implements.

25. The principal crop in the rainlands is dura, although increasing

quantities of peanuts and sesame are also grown. In the south cassava ranks
with millet as a food crop. American-type cotton is also cultivated,
principally in the area around the Nuba MIountains in Kordofan, and in
Equatoria. For the Nuba Yountain area the Mfinistry of Agriculture supervises
cultivation and has responsibility for ginning, baling and transport. In
Eauatoria this responsibility is vested in the government's Equatoria Projects
Board which in addition operates a small cotton textile mill and a vegetable

1/The fertile triangular plain between the White and Blue Niles, south of
Khartoum.
oil extraction plant. The Equatoria project, originally conceived as a
means of settling and supporting the Zande tribe, has been only moderately
successful. It has been difficult to induce tribesmen to clear land for
cotton and to maintain adequate standards of cultivatio:2; and the cotton
mill, which was designed to produce cloth for local consumption, has found
that its grey cloth is for the most part unattractive to the native popu-
lation and encounters difficulties in competing elsewhere in the Sudan with
imports. Cotton yields in the rainlands, averaging about one kantar
(100 lbs. lint) per feddan, are only about a fifth of those achieved in
irrigated areas; and the entire output of American-type cotton is only about
one-eighth of that of long-staple. (See Table 1, Statistical Appendix.)

26. The steady advance of cultivation has created certain problems of

land use. The expansion of cultivation at the expense of areas under forest
or grazing has given rise to the danger of erosion and a number of human
problems as well. For this reason the government recently set up a land Use
and Rural Water Development Board, supported by a similarly named department
in the Ministry of Agriculture, to study problems of land use and resolve
conflicts regarding the best use of land. The problem of land use in
northern Kordofan and Darfur. where there is a danaer of desert encroachment.
is among the first to be studied. The government is particularly aware of
the nossibilitv that the introduction of meohaninq1 cultivation in the
sandier soils of these two provinces may well cause excessive erosion and
iio tlltivatinn until nilot _chtmns
has forhirdcIen sm determine undeir what
conditions it may be practised.

27. The government has done much for agricultural progress through

water supply, expansion of irrigation and agricultural research. However,

little or nothing has so far been done in the f f a ic+u c t
Although the Ministry of Finance has administered a modest scheme for
s t
agricultu,-al loans, a fOr.rnl agricultural credit in itution do es not ex-sat
Credit for current agricultural operations presents no serious problem,
rn .olor+3,il a- IT-onaliic sal 1 +1-i vrnma,-nicj+. n v-4;iro+.o1
nvt TVitOF
mnna h++fon ctcan
CAIC
r~~~~~~~~~~~~~~~~~' fr' ASV > U..v .- CA
wJ ' C.l.I *.t. *

provide advances on reasonable terms to tenants. Credit for investment,

horevOry 4is extremel- short- andA ava1lable onayt+o a 14_a,ed extenrt throg-h
the commercial banks. Legislation has been enacted to establish an agri-
cul-4r1
ULL l-it Ua.IW..
ULALLdaI. WiLl tAI a-41
-capita-l
Q
La.L.LK2± Of
IJ.L TC!
La-" 5J IL.L±L.L(JLULI, bu
1-4llon
OL)L t ifitesi
UjLLJ. ±LCLLUU.L .L_0 Li taf 2uC.L
±Iiu

such an institution are ex?pected.

28. While the Ministry of Agriculture has a field staff, most of the
U±uie of vhis std.L i
± ummtul up w±Ln axuu .LLZ5Ua-tda+vU and regu..L-uu±ry wurk.. TIhe
Ministry is now contemplating the organization of a separate extension service
as soon as the requisite people can be trained. The lack of such a servIce
has been felt particularly in the field of rainland agriculture. The larger
private and the government-managed cotton growing projects in the irrigated
areas usually have their owm trained staff to supervise agricultural operations.

29. Agricultural research has made an important contribution, particularly

to the cultivation of cotton. The government maintains three research stations:
the principal one at Wad Medani in the Gezira which concentrates on cotton;
 -9-

one at Tozi, established in 1952, for rainland crops; and thae third at
Yambio in Ecuatoria for research and experimentation on tropical crops.
A fourth station to work on problems and crops of sandy soils is contemplated.
Agricultural research, although generally on a high standard, is characterized
by two deficiencies - one, insufficient staff, and the other, excessive
orientation toward cotton. Although the government has been partially
successful in recruiting agricultural scientists from various foreign
countries, the number and quality of staff has deteriorated in recent years.
The Wad Medani station, for example, is without a chief agronomist and chief
entymologist; and the Yambio station, which is well-equipped, is tenanted
by a sole agronomist. While the Tozi station is doing good work on rainland
crops and has deEionstrated the possibility of growing a wider range of crops
including not oniy dura, sesame and peanuts but also hybrid maize, safflower,
castor and sunflower, the Wad 1edani station has been excessively preoccupied
with long-staple cotton. Its experiments with crop rotations hlave been
confined to different sequences of cotton, dura, lubia and fallow and have
been studied only with view to their effect on cotton yields. Little or no
attempt has been made to experiment with other crops in the rotation, to
determine the water requirements of different crops and to establish the
comparative total gross yield and cost of various possible crop rotations.
There is a yrowing realization that its reaearch wlork must be broadened in
the interest of nrormting a more diversified agriculture.

30. The striking feature of Suidan's agriculture and economy is undoubtedly

its heavy dependence on cotton. While the production and export of other
commodities has increased substantially; their relative imoortance in total
exports has not changed significantly. Cotton, cottonseed and cake still
accournt for about 70% of the Sudan's exports, Cotton directly contributes
about 4O%of the government's revenues, without taking into account the
collect ion of duties on imports m2de possible hy cotton exports. Ibreover,
the value of the cotton crop probably exceeds the combined value of all other
crops. T4 should beA oted, h oinver, that the Sudan isq eminently suited to
the cultivation of cotton and that its cost of production is evidently very
low. There is no ready, equally profitable substiLtute for cotton even though
the importance of the latter in the rotation system might well be de-emphasized
somewhat in the inteerest of greater income stabilitv-. Tn any event the
production of food crops has made sufficient progress so as to eliminate the
threat of starvation which som-e three or four decades ago still affflicted
the country.

Foreign Trade and Balance of Payments

31. The Sudan is highly dependent on foreign trade. A high proportion

of its output is exported, arnd virtually all of its requirements of manu-
factured consumer goods, capital equipment, fuels, and building materials are
imported. In foodstuffs it is largely self-mUfficient, except for sugar, tea
and coffee, and some wheat flour. In the 3-year period 1954-1956 about 70%
of its exports consisted of cotton and cotton products, 9% of gum arabic, 7% of
livestock and hides and skins, 4% of peanuts and 3% of sesame. Trade is
largely oriented toward the sterling area which took 47.7% of the Sudanis
 =1 fL.

exports and supplied 51.3% of the country's imports in the 3 years indicated.
The continental European OEEC area, with which trade is also settled in
sterling, accounted for 29.7% of the exports and 19.4% of the imports. The
Soviet bloc took only 1.5% of the countryts exports and supplied 5.4% of its
imports. Trade with the dollar area, accounting for 4% of exports and 2.2%
of imports, has also been rather insignificant. The Sudan's largest individual
customers have been the United Kingdom (34.7%), India (10.9%) and Egypt (9.9%);
and these countries have also been its principal suppliers (30.5%, 11.6% and
11.9% respectively). The United Kingdom, India, Italy, Germany and France
have been the major buyers of Sudanese cotton, taking about 45%, 17%, 10%, 87%
and 6% respectively in the 3-year period indicated. The composition, distri-
bution and development of foreign trade is illustrated by charts and graphs
in the front of the report. It should be noted, finally, that the terms
of trade in the postwar period have been substantially better than before the
war, the index in the 4 years 1953-1956 averaging 146 as compared with 100
in 1938.

32. As might be expected from the pattern of its foreign trade the Sudan
is de facto. thouRh not de Jure. a member of the sterling. area and keeps its
foreign exchange reserves principally in sterling. In general it has adhered
to a policy of multilateral trade, although imnorts from the dollar area
are subject to special license and trade with the Soviet area and Egypt is
conducted under bilateral navments agreements. Trade with Egypt remains
free of quantitative restrictions and duties until April 1958 when the
nit.nat.inn mrnv bh re-viewed=- Tmrnnr1-F from the non-dla1n1 r area eome in

freely under open general license with the exception of 22 rather unimportant

33. The balance of intern.ationZal pay.m.ents is given in Table 11 of the

Statistical Appendix. The balance of trade tends to oscillate markedly from
yerar to year rot on,y b,cause the price ad abover all th yrolirmn rof' ±tn
exports fluctuates sharply but also because imports respond to changes in
the value of exports olly after albout a r nia del aTr flo th
+.Io ir-ar
period 1951-1956 as a whole the Sudan had a merchandise trade surplus of
TS 47. r h.i,--,ch 4-,-
waQ offset to - extent Of TC 2Q9.1 m-Jli4 ,-4, l-ir a
deficit on current invisibles. The invisible items in current account
e
transact4o-r.ns
-- are coMpa-rativr ly very sM-l1.

Uoyvernm,ent Finance..;

?4. Uo)vfer1e1n1 ;rces re cXaavrzU. uy I arge,

_LC..e amunQ ofL revenue
derived directly from foreign trade, including the government sugar monopoly,
and f-rom go-verrzuent participation in agricultural ndertakings, and by
the rather small role played by direct taxes. Thus in the 3-year period
1953/54-1955/56 import arnd export dutiLes together with the profits on the
government's sugar import monopoly accounted for 48.6% of budget revenues;
the governmentms share in agricultural undertakings (cotton-growing schemes)
and interest on capital invested in government enterprises, for 20.6%; and
direct taxation, for only 5.8% (see Tables 3 and 4, Statistical appendix).
The busirespois
nacne for '790% of the direct+>e collected.
There is as ret no personal income tax, and the other taxes - various types
dL.AnU, ar±i maUL anULL po'± eL
±%V - ar L i± Vtzi.y unImI 4 1Por cldil. kJ,L Uic. WIIW,oe

government revenue appears to be quite responsire to changes in national

income and foreignl trade.

35. vevelopmenit exp.endi ure haetks nicesngsaeo oa oer

ment outlays, rising from 15.3% in 1950/51-1951/52 to 20% in 1954/55-1955/56.
Thle desire of the goVUi-ii--1ent to increaseti share
hrethis
still furtler is indicaUtd
by the fact that budgeted (as distinguished from actual) expenditures on
d.evelopment in i^56/5--957/58 amounu ecto no less then 35% 0f the Utoa.

When the government's recurrent expenditures are compared by 2-year periods

- i950/51-i951/5Ž; 1954/55-1955/56; and i956/57-1957/58 - it will be noted
that the share of the IUinistries directly concerned with the economy
I(Agriculture, Animal Resources, Commerce, Communications, rublic IWTorks and
Irrigation) has remained about the same (34.4%, 34.9% and 32.9%), while that
of those concerned with social services (Health, Education and Social Affairs)
has, as might be expected, increased (17.4%, 20.5% and 23.1%). The share of
the Mjinistry of Defense has also risen - from 7% to 8.3% and 11.5% . Tables
5 and 6 in the Statistical Appendix show the trend of expenditures.

Currency and Banking

36. The Sudan now has its own currency. In the period April to October
1957 IE 23,757,288.5 in Egyptian currency was exchanged on a one-for-one basis
for new Sudanese notes issued by, the newly-created Sudan Currency Board. The
new note issue was covered half by foreign exchange and half by Sudan governnent
Treasury Bills, with the proviso, however, that additional issues were to be
covered fully by foreign exchange. Further issues are not expected for some
time, however, since there was still IS 7.7 million in notes in bank tills at
the end of November 1957. Ivanwhile, the exchange of British and Egyptian
coins for new Sudanese coins is taki.ng place and will be completed by
April 30, 1958.

37. In return for the repatriation of its currency the Egyptian Government
undertook to transfer to the Sudan sterling securities to the nominal value
of L 20 million sterling (L 16.5 million market value) or the equivalent of
IS 19.5 million in Sudanese currency. To the balance of L3 4.2 million
(IE 23.7 million minus LE 19.5 million) the liabilities of the National Bank
of Egypt to its branches in the Sudan were added. Even after the Sudan
Governmentts debt to Egypt, amounting to LE 4,364,000, was set off against
this Sudanese credit balance. there remained an amount which was entered in a
"Special Account" in Sudan's favor on the books of tihe National Bank of Egypt
at Cairo. According to the financial agreement with EgyvDt this Special
Account was to be liquidated by (1) exports of Egyptian goods and services,
includine LO.000 tons of suear, up to LE 2 million per vear, (2) settlement of
any credit balance in favor of Egypt in the payments agreement between the
two eountries. (3) the repatriation of Egvntian eapital from the Sudan. and
(4) any other agreed way. However, Egypt has fallen behind in its delivery
of- goods, partieularly igarj and has run a debhit. inqtearl raf cqredit. bhaanee'
 -12-

in its current payments with the Sudan. In December 1957 the Special Account
still showed a balance of IS 9.4 million, Mleanwhile the U.K. Government has
permitted the transfer to the Sudan of all but L 1,830,000 of the L 20 million
sterling securities from Egypt's reserves.

38. Banking services in the Sudan are provided entirely by 6 foreign banks:
the Nlational Bank of Egypt (8 branches); Barclay's D.C.O. (14 branches);
Ottoman Bank (4 branches); Credit Lyonnais (2 branches); Bank Misr (4 branches);
and the Arab Bank (1 branch). Within the next few years the government expects
to establish a central bank which will take over the functions now discharged
by the Currency Board and the National Bank of Egypt (DEE). The latter,
which is the government's principal depository and fiscal agent, now operates
primarily as a bankers' bank under the supervision of the government. The
NBE gives seasonal credit accommodation to other banks at 390%from the
substantial Sudan government funds maintained with it on time deposit.
Commercial banks charge about 6% on their loans and advances, and pay 3/4%
on call deposits (15 days), and 1% and 2% respectively on time deposits of
6 and 12 months. The use of checks, which are cleared through the PBEE is
fairly widespread.

Transport

39. In a country which has a maximum length (north-south)of 1,400 miles

anrd a maximum width of 1j200 miles (east - west); transnort is natubrally of
great importance. This is all the more true because the productive areas are
fa-r from Port Sudan on the Red Sea throulgh which virtually all the foreign
trade moves. The principal cotton-growing region of the Gezira, for instance,
! rAn mi4 1 a r*nrn +b r%n"r+. T'T"jc crnii+I1l-,
rVaTV
- 9nY1 rni 1 fm-m -nnrt. -ndr
-;
is580 miles frmhe ,--rt. The south is ----4 1
----- rdles! fo +1
h ot n
the projected new railhead at Nyala in the West, 1,300 miles (see Annex A).
Exceptrin the South t1here are no all-rweath.-.er ronadAs, and +the +-as of -a
construcQion is made difficult in many parts of the country by the lack of
goodl roadu -1build--ir, trals.-
- oDrtl 4-utr the
4- is well1-1-suit4-ed to-
railway transport, and a good network of railways is onerated by the
v
Egovernrm.nt. The railways, how ever, Ado not ser.v +t,he S 1ot-A +t-h exre+me
West; and there is little doubt that lack of adequate transport impedes in
part '41i'Ue d 4eve'lopment1
oLf th1o1s01 regiLon.0. LThe .WUUI4-L±iJ.LJ.Loy
0S.oVUth b'Jy stea..ers

which in part can operate only seasonally.

III. Recent Economic Growth

The Rate of Expansion

40. Since the war the Sudanese economy has grown at a rapid pace. The
volume of foreign trade is now about twice as high as immediately before the
war. The accompanying table provides some indicators of this economic growth,
comparing the three-year period ended 1950 with the more recent three-year
period ended 1956. In this time interval the cropped area under irrigation
increased 31%; and it is likely that the area under rainland cultivation
 -13-

INDICATORS OF ECON5KIC GROWrH

Three Year Average Ending

-iy' _Q5 ( Rs
percentage
(1) (2) of-(l)

Cropped Ara ande^r IrrigAtion

Gravitya/ 380 a19 110

)asin a.d 106
o 129 122
Perennial pumpsc/ 80 194 243

Total 6 742 131

Railway Traffic: ton-kilometres (millions) 693 1,226 176

Exports

ToOul dormestic axports (, 27,256 fl ,077 187

Cotton (1,000 tons) 60.9 90.1 148

Cotton, cottonseed, cottonseed oil and cottonseed

oilcake (10,000 LE) 21,429 35,629 167

Groundnuts (1,000 tons) 5.9 46.0 780

(1,000 LE) 211 2,780 1,318
Sesame (1,000 tons) - 25.3 -
(1,000 LE) - 1,798 -

Dura (1,000 tons) - .

33-3
(1,000 LE) - 554
Gum arabic (1,000 tons) 36 43.3 120
(1,000 LE) 1,965 4,616 235
Cattle (1,000 head) 29.1 49.5 173
(1,000 LE) 422 862 204
Camels (1,000 head) 59.1 35.6 60
(1,000 LE) 1,464 1,196 82
Imprts A-/

Total (1,000 LE) 24,430 47,514 194

Selected capital equipment2/ (LE 1,000) 2,695 7,620 283
of which: internal combustion engines 256 476 186
agricultural machinery 123 290 236
pamps and parts 56 135 241
tractors and parts 118 273 231
vehicles and transport equipment 1,134 3,755 330
Oil fuel and petrol (1,000 LE) 1,029 2,474 240
Timber (1,000 LE) 402 707 173
Piece goods - cotton and artifical silk (1,000 tons) 8.6 14.5 168
(100 LE) 4,665 7,904 169
Sugar, refined (1,000 tons) 52.9 98.3 186
(1,000 1LE) 2,225 3,831 177
Tea (1,000 tons) 4.1 6.9 168
(1,000 LE) 1,031 2,817 273
Coffee (1,000 tons) 8.1 5.8 72
(1,000 LE) 1,106 1,769 160
Pablic Finance £
Total Government Revenue (1,000 LE) 20,939 38,553 184
Total Government Expenditures (1,000 LE) 15,337 37,752 246
of which Development Expenditures (1,000 LE) 2,730 7,749 284
a/ Actual irrigaTed area under crops in the Gezira scheme.
/ Effective cropped area (40% of gross area for basin irrigation; 70% of gross area for flood irrigation)
cj Effective cropped area (1/3 of gross area) of pump schemes in actual operation. Gross area of all approved
pump schemes was over 1.5 million feddan in 1956; gross area of those in actual operation only 704,000
feddans.
dI import prices in 1956 were on the average about 10% above those of 1950.
e/ Including all machinery, also electrical and all transport equipment.
For the fiscal yearsl948, 1949 and 1950 tin 1950 the fiscal year has changed from a calendar year basis to
an annual period running from July 1 to June 30, subsequently the official figures for 1950/51 refer to
14 years and have been adjusted to 1950 calendar basis through multiplicity by 2/3) as compared to the
fiscal years 1953/54, 1954/55 and 1955/56. AU figures are actual revenues and expenditures.
 -14-

also rose substantially, although reliable figures are lacking. The vo-lume
of cotton exports increased 48%, that of gum arabic 135% and that of reanuts
even more spectacularly. MU_ overal value of exports and imports was 37%
and 94% higher in the more recent period. A good overall indicator of the
expandilng urniover in the economl.y is the 67%/ rise in railway freight traffic.
Government revenues also increased 84%. The standard of living rose despite
the large volume of' savings enforced tIrough gover-rnmernt budget s rpluses.
Consumption of domestically produced foodstuffs undoubtedly increased, and
imports of such consumer goods as textiles, sugar,tea and coffee rose
significantly in value and, in most instances, in quantity.

41. A considerable expansion in investment activity has also taken place.

Imports of various types of capital goods such as tractors and agricultural
machinery, pumps, transport equipment and timber have risen substantially.
Public investment, as indicated by the increase in development expenditures,
has been much higher than before. Actual central government outlays on
development have mounted from IS 1.9 million in 1948 to IS 8.4 million in
1955-56 (see Table 7, Statistical Appendix). In the 6-year period
1951/52 to 1956/57 development expenditures totaled more than IS 33.5 million
(see Table 8, Statistical Appendix), to which mnust be added the investment
made by local government councils out of their own resources which probably
amounted to around IS 2.8 million (see Table 9). In addition the Sudan
Railways and a number of public utilities also financed a considerable
amount of investment from their own revenues.

42. A complete breakdown of all government development expenditures is

not available, but the actual outlays of IS 35.6 million under the 1951-56
development program vere distributed as follows:

IS million % of Total

Transport and cormmnications 10.5 29

Education 4.5 13
Public utilities 4.2 12
Irrigation 3.9 11
Agriculture 3.5 10
Health 2.5 7
Tocal government schemes 2.0 5
Others (including general administration) 4.5 13

Total 35.6 100

Financial Stability

43. This rather remarkable progress was achieved without sacrificing

financial stabilitp. In fact all of the government's development expendi-
tures were financed out of ordinary budget surpluses which in the 6-year
period 1950/51-1955/56 averaged IS 11.2 million or, if the extraordinarily
high surpluses of the first two years are eliminated, IS 5 million. Even
after financing development outlays the government ran a total surplus of
 -15-

30.i9 mii±ion over this o-year period anduf

3S i-o 1.5 mulaion over t ie
4-year period. In 1956-57 there was probably a small overall deficit after
takingr into account development outlays (see Table 6, Statistical Appendix).
Since 1951 there has been a substantial expansion of bank credit to the
private sector - namely, from IS 2.5 million at the end of 1951 to LS 22.9
million at the end of 1956 (see Table 12, Statistical Appendix). However,
most of this increase, which took place largely in the first two years of
this period, was probably occasioned by the preceding withdrawals of money
from the economy through budget surpluses, and the balance was probably
justified by the general expansion of economic activity. In any event,
there was no significant drain on the country's foreign exchange reserves
during this period as a whole even though there were fluctuations from year
to year. The cost of living appears to have been stable in recent years.

Deficiencies in Cotton Marketing Policies

44. In one respect, the marketing of cotton, there have been occasional
and temporary deviations from sound policies - once in 1954 and again in 1957.
In the former year the Gezira Board, which markets all the cotton grown on
government-managed schemes, adjusted itself too late to a declining market
for cotton. The primary factor in the depressed market of that year was
probably the liquidation of the United Kingdom Raw Cotton Commission which
had been buying ab,ut 70% of the Sudan's cotton and had accumulated
substantial stocks. In that year the Board changed successively from a
system of privately negotiated sales to one of international tendering with
fixed minimum prices and one of free auctions with "reserve prices" below
which sales would not be made. Reserve prices, however, were presumnably set
too high. for out of a Sakel (i.e. long-staple) crop of almost 1.6 million
kantars (160mi1.lbs.of lint) only 1.0 million kantars were sold; the balance
had to be disposed of in the next year at much lower prices. (For data on
production, sales and prices, see Tables 1 and 2, Statistical Appendix.)

45. In 1957 the departure from sound marketing policies was more serious.
Sorm forward snles of nrivate]v-grown cotton at rathpr attractive nrices
induced the Board to fix the reserve prices on the 1956-57 crop at rather
higrh levels. (For the development of reserve prices. see Table 2a;
Statistical Appendix.) World prices, however, sagged considerably owing
to a nuvhm.ber of factors. Cot+nn disposals at auction by the U.S. Commoditiy
Credit Corporation and particularly heavier sales of El Paso and California
cottonsM in, are competitie + +1*t1h
the I=" ffneAOO
gae of- S cotn

depressed prices and cut into Sudan's markets. The prospect of a reappearance
of Egptian cotton on the Ibstern E market ard a mild recession in +1,J
U.K. textile industry were probably further depressing factors. The Gezira
Bo ardVA re,du cenAd i+t.s reiervs pri^es1
,.e in ,r AuviMy
Aar e 1arl I\Tvmrn1, n-d 4i
August even negotiated an agreement with private cotton producers whereby
the latter agreed to coordinate their prices with those of the Board. Th.ese
measures, however, proved belated and insufficient, and it was not until
NoT_ve-se
LWI. 19-.L7
lfVtAiiLt. in a
4UL,L.U the4
WA1; Board
L.)Uc:L±L U redu4ced
tI ULIL U it
.L UO reserv
.LU 1U V%:J; price
J L to
LA) ( 1a;vL
±0I
-c ~ _LE.I1U.Li'
levellightl
-
below world prices and the government simultaneously reduced the export duty
L4
or long-:sUuap0le cotton frot TL 3 tu To5 1.5 per Kl-n'ar. Since ithen-I
lotton saIles
 -16-

have been brisk. Out of a bumper crop of 662,000 bales only 209,000 bales,
including 139,000 bales of privately-sold cotton, had been marketed by
November J8. In the succeeding month, hnwever, 211,000 bales were sold.
It now seems likely that all or nearly all of the 1'46-57 crop will be
sold before t.he new export season begins in March 19518. 3om.e carryover
may not be unvwelcome since first reoorts indicate that the 1957-58 crop
may be rather poor.

46. The slowness in marketing cotton in 1957 occasioned a considerable

loss, partly temporary, in foreign exchange which was aaaravated by the
substantial increase in imports for re-stocking following the re-opening of
the Suez Canal. In the first 10 months of 1957 imports totaled IS 59 mil-
lion as comDared with IS 45.3 million during the entire previous year.
Eccluding the effect of the currency exchange on foreign assets, the
Sudan suffered a loss in foreign exchange of IS 21.5 million (IS 25.6 mil-
lion in sterling. offset bv an increase of IS L.1 million in assets in
Egypt), from the end of 1956 to mid-December 1957. The loss was aggravated
by the fact that most of the eurrent and short-term foreign assets had
been put into the currency cover and the payments deficit accordingly had
to be omvrered to a large extent hy the liquidation of long-term qterling
securities at prices up to 30% below their nominal value.

Foreign Exchange Reserves

47. In mid-December 1957 the Sudan's total foreign assets amounted to

IS 37.4 million including the IS 12.1 million in the currency cover. Of
this total IS 24.4 million consisted of sterling, IS 0.4 million of dollars,
LS 12.3 million of temporarily immobilized assets in Egypt and IS 0.3 mil-
lion in balances on other bilateral pavyments accounts. (See Table 14,
Statistical Appendix.) The foreign exchange reserve may well rise
substantially in the next year, however, partly because imports may well
decline somewhat froma their recent excessively high levels and above all,
because receipts will be coming in from cotton already sold but not yet
shipped and from the sale of the quantity which was still left by mid-
December and will probably vield more than IS 12 million.

L8. The notton-marketina exoerience of 1957 has left a deen impression

and a realization of the importance of following competitive marketing
nolinieA. The government is now dietermined to trRnsfer repnonsibilitv
for marketing from the Gezira Board to a new Cotton Mlarketing Board. This
Board. which would be charged with the marketing of all cotton produced
in the Sudan, would include representatives of the private growers, the
variouis government boards concerned witlh cotton-growina schemes and the
Ministry of Finance and Economics. Through an advisory council it would
have the mgns to obhtein rvlei from mrrket-iae groups su.ch as the
cotton merchants.
 -17-

IV. Development Programs and Priority Investments

49. The government has been anxious to accelerate the rate of advance
in output and livlng standal-ds by embarking on a ,more a,dbitiou"s developmenlt
program. A new 5-year program extending from 1956-57 to 1961-62 has been
drafltd and wo-ud nvol-ve a totUl e-xpen1diturLe of iS 79 millionl, distribu-Lted
as follows (in thousands of Sudanese pounds):

Amount % of Total

Agriculture and Animal Husbandry 5,275 6.7

Irrigation 44,822 56.8
Transport and Communlcations 16,041 .a/ 20.3
Electric Power and other Utilities 2,523 3.2
Social Services 6,359 8.o
Health 4,582
Education 968 b/
University 809
Other 3,960 5.0

Total 78,980 100.0

a7 Excluding investment financed out of railways revenues

b/ Partial provision for 2 years only.

The total will probably be much greater, particularly because very little
has been provided for education pending a complete appraisal of educational
objectives and means. The final amount for education might well be about
LS 6 million higher. Railway and power requirelents may also have been
underestimated by IS 1.0 and IS 1.2 million, respectively. The total might
thus be close to IS 87 million, which would call for an average annual
expenditure of over IS 17 million per year. Technical and administrative
limitations would be likely, however, to keep actual expenditures well below
this figure.

50. The government has prudently decided not to commit itself to a five-
year program until there is a reasonable assurance that the necessary resources
will be available. It has made a commitment only for 1957-58 and is waiting
in particular to see what external resources might be available from the
IBRD.

51. The Bank Mission did not attempt to appraise the whole of the
tentative development program in detail. It is apparent, however, that the
program puts a commendable emphasis on the development of productive resources
and reflects a determination to resist pressures for greatly expanded outlays
on social services until the production base of the country can be widened.
 Am",Ss ion didd exal- ne in so..e derail C04-M .n f Iel S 0I inve s+ tMIe nt=
Th1-e
irrigation, transport and power - which appear to be of high priority.
Tl h,o r1 ,*s,1,i_,-t-.-o o f
ILf i^ _u ex..n 4n t ,o. are rnre f ull a v for_ _Li r, D-
and C of this report. Here only a brief summary will be gilan.

irrigation rrojects

52. Despite the potentialities of rainiand agriculture, the low and

erratic rainfall 'prevailing over most of the Sudan makes it clear that the
country must rely primarily on irrigation as a means of expanding its agri-
cultural output. There are at least 3 million feddans of good soil available
for irrigation. Miost of this area, including all that comprised in the
projects scheduled for the-immediate future, has been the subject of a
topographic, soil and land use survey by Sir Alexander Gibb and Partners.

53. The government is at present carrying out the Managil extension to

the existing Gezira gravity irrigation scheme which would irrigate an addi-
tional 800,000 feddans gross from the Sennar reservoir; and it hopes to let
a contract some time in the summer of 1958 for the construction of another
3 billion mn3' reservoir at Roseiras on the Blue Nile.

54. Designs for the canals and structures of the Yanagil Extension were
prepared by Sir M. MacDonald and Partners. The Irrigation Department is
carrying out most of the work, although the new main canal required is being
excavated by two German firms. The work is to be completed in four stages,
each covering 200,000 feddans. The first stage is to be finished in time
for the 1958-59 cropping season, and the remaining three stages at annual
intervals. There may well be a lag of a year or two in this schedule. Only
the land involved in the first stage can be irrigated the normal length of
time, i.e. up to the end of Mhrch; for the land in the three subsequent
stages water will be available only till the end of December - unless the
government chooses to ignore the 1929 Nile Waters Agreement. The cost of the
project is estimated at IS 35.7 million, including IS 4.2 million for addi-
tional rail and telephone facilities. Probably IS 10-11 million of this
sum will have been spent by mid-1958. The foreign exchange cost is estimated
at TS 15 million ($42.9 million).

55. Revised designs and specifications for the Roseiras dam are just being
completed by Sir Alexander Gibb & Partners in association with M.M. Andre
Coyne et Pierre Bellier. The Roseiras reservoir would provide water for
(a) irrigation by gravitv of an area of 1.22 million (nerhaps ultimatelv
2 million) feddans in the southern Gezira known as the Kenana Extension,
(b) more ardequate irrigation of the Managil Extension. (c) expansion of numn
irrigation, and (d) the ultimate conversion of the present Gezira scheme to
a nmrnpwhat. mrnrp. intf.nqivP ornnninp nattprn (tntailing Pn1arppmpnf. of nis;.tinp
Gezira canals). The Roseiras dam would take about 6-7 years to build and
w7ould cost an estimated T..L 3 million ($100 million) including interest
during construction. The foreign exchange cost has been tentatively put at
Tr 17-18 million ($45.6-48.2 mnllion). The canalization of the Kenana
 -19-

Extension might involve an expenditure, exclusive of interest during con-

struction. of IS 36.6 million ($105 million) of which perhaDs IS 14.6 million
($41.9 million) might be in foreign exchange.

56. These projects involve three major problems. The first relates to
the cropping pattern on the newly irrigated areas: the second arises from
the possibility that the benefits of the Roseiras dam may be long deferred;
and the third sq`:.ems frnTm the factt that the Milte is an international river.
involving the interests of countries other than the Sudan.

57. The new irrigation projects are expected, as the present ones, to
coce tri1r+.ez r% 4--I m
concntr+e
+h o ie+ia
proucton o ryEer)+.+r-n.v
L-r-ila
coton.I^.l hea Micaqi-r1r liho
;ffssion. has n-rqrT
already
pointed out that the Sudan is eminently suited to this crop and is a low-cost
producer, it
+.ould atsn
bICedeSnra1De. a+ early date lah exper-nments an-d
field trials with more diversified crop rotations. As shown in Annex B it
ho +Ov%-o+,,orl,r ne.r,n1,AnAr e,,k-an+ ~~~~~~~~~~~+_
+r .a --- Aa+er; 1A w_a; nol onnroSa;col V\vskJ\/
van3VpX<l_
onor
~JL4.& ~ -
J
*~',~.L*jC4.i4-V ~kJ-Aj Lfl±L,
wnv'
C LJA~
+on'k,
'- - - - - -- -O.---- - -.

that the economic and financial returns from Managil are likely to be large
in olatZo.- +_ 4-rest-.ent and operatIn,g
.Ln. .~ iJA iA' L1
LIi,~
n
costs.
O
I
ThereLis
LI±c
UIUJLdiu
aC question,
"ALIj.ci
however,
0. L ,' O 0 Ai/4 .L V~Vii

whether the returns from Roseiras would be adequate for a considerable

periodof t1im. The expansion of irrigatlon may iLL
11.2the fLU.e u.tLun thme
supply of labor of which there is already a growing shortage at harvest
Utime. A ±cLaUbo shOrtlagu mlay eVten1 Ude VeLuJp uIpIon Uthe LiJIj±eU±i.JI UcL 1of1.1
Mn -L; andl

for this reason, as well as the limited availability of water, the Mission
suggestled in-vesti8augLu±atg -
tuhe pUosiU±l± Iy 0.f gruwinlg A1rd1triaLn11- yPty UcoUtLt

which can be picked earlier than long-staple and could perhaps also be
harvested by mecnanical strippers. It may not be possible, however, for
quite some time to find sufficient tenants or paid labor for the cultivation
of the areas which could be irrigated from tne Roseiras reservoir. Some
consideration might therefore have to be given to the advisability of
postponing the construction of Roseiras for some years, unless an arrangement
can be worked out to supply water not needed in the Sudan to Egypt on
attractive terms. The desirability of growing American cotton is reinforced
by the probability that with a disproportionate increase in the production
of long-staple, the price premiums of long-staple over middling might be
substantially reduced.

58. The international question raised by these irrigation projects is

rather complicated. The only agreement pertaining to the use of Nile River
water is that concluded between the United Kingdom and Egypt in 1929. It
basically reserves to Egyptian use the current flow of the Nile during the
dry period in the first seven months of the calendar year, with the exception
of some water used by pumps on the Sudanese side before the agreement was
made. Any additional water used by the Sudan in this period was to be
provided by the release of water stored in the Sennar reservoir. The
agreement also set a maximum limit on the canal offtake from Sennar and
required Egypt's consent to the erection of additional control structures
in the Sudan. The Sudan questions the continued validity of the agreement
since it was not directly a party to it, but has not violated it.
59. The 1Managil project, however, would technically not be in accordance
with the agreement beginning with the second stage wnen the maximum permissible
canal offtake would be exceeded. For the construction of Roseiras, Egyptian
consent would be required under the agreerent. Ybreover, the use of any
substantial additional quantities of water by the Sudan and Egypt naturally
raises the question of the rights of other parties who have a direct stake
in the Niile, including Ethiopia and the British East African territories.
Egypt and the Sudan have been sporadically attempting to negotiate a new
agreement regarding the Nile but none has yet been reached. The Egyptians
and Sudanese evidently intend to seek an agreement in terms of a percentage
division betwreen themselves of whatever portion of the Nile waters is
available to them Jointly, thus leaving the way open to a subsequent
agreement with the other interested parties.

60. The critial mp-ortance of transport to the econommy hao already been
stressed. Since the Sudan produces primarily bulky commodities which must
beo moved over lor distanlc,L, .a.lway0 appear biest ssuit edd too mleet tLhLe
country's transport requirements. There is at present a good network of
_,, 171 LoL.1ometres of rail-aW.y wh.lch, tog Jet With he port .uJU
Lau Juuani a d.n
a number of steamer services, is operated by the Sudan Railways, a virtually
aUULIoIUU.5 ZWmJHtJUa.L- Ub±UI uowaLIJ, uu. LId Ue
generai supe,vi±soUn uo uriu

Ministry of Communications. The Sudan Railwayrs, which has its own accounts
and budget, appears to be compeLtntly managed. ITs anII-ual earnings, after
adequate allowance for depreciation, have approximated IS 2 million in each
of the last few years.

61. The railway administration has now embarked on a five-year development

program, partly because the railways have not been able to keep pace with
the growth of the economy, partly because it is considered necessary to
provide railway service to new and developing areas. The program consists of
(a) the acquisition of new rolling stock, partly for replacement but mostly
for expansion (IS 9.29 million), (b) the dieselization of a 125-mile stretch
from Port Sudan to Haiya Junction which rises to an elevation of 3,000 feet,
bears the heaviest traffic and is at present a bottleneck (IS 2 million),
(c) the replacement of 50-lb. with 75-lb. rail on certain stretches
(IS 2.9 million), (d) three new line extensions - one to the Yanagil
Extension, the second to Nyala in the West, and the third to Wau in the
South (IS 6.71 million), (e) equipment of a new quay at Port Sudan which is
now under construction and would increase general cargo-handling capacity
by 50% (IS 0.3 million), and (f) miscellaneous investments and contingencies
(IS 0.75 million). Of the total cost of 1S 19.9 million ($56.9 million),
about IS 14 million ($40.4 million) is expected to be foreign exchange.

62. The Bank Mission reached the tentative conclusion that a 50% increase
in traffic can be expected over the next 6 or 7 years. The proposed extension
to Managil would serve the needs of the large irrigation project now under
way there. The ones to Nyala and Wau would facilitate the development of
 -21-

regions whicnh ha-ve considUeraule economie po uenblal, alth -ough te uutima te

traffic on these lines can hardly be forecast; and the line to Wau would
provide a regular and reliable service for a region now isolated for a
considerable part of the year.

Electric Power

63. Additional rower is primarilv required for the raDidlv developina

Gezira region, since the requirements of the Khartoum area will be met at
least until 1961 after an additional steam unit of 10 MW comes into service
there in January 1959. Two proposals have been advanced to meet the
growing load in the Gezira. One envisages the installation of 15 MW of hydro-
electric power at the Sennar dam. The other advocates a 20 MW steam plant.
The question is now iiuner fuirther stiuyv hv Rrl (Griinerof Swri tzerl and.
Owing to the rather low discharge of the Sennar dam at the time of peak demand
mliiring +.the girnnin seasnQon, hyrrn npower mary havn to bh bhnacedr in hup
byom?e
thermal facilities. If so, the investment required for the combined hydro
and thermal installat-ions would probabl exceed that of a purely thermal
plant by a substantial amount. The balance of advantage may then lie with
the latter solutiorn l-o, -e +1n cos+ -1-i ter- of the e-t-rna
which can be realized on capital in alternative employments, is rather high
in the Sud.an.

to provide a steadier and larger discharge, the development of hydro power

rnay well prove a-vantLageous. There is a considerable potential demand for
such power to electrify the large number of existing and future irrigation
pumping stations.

V - redli twnrthi _e_

65. There are many features or characteristics of the Sudan, its govern-
ment and its people which indicate that the country is a good credit risk.
Most of these have already been discussed or mentioned in this report.
Among them are the generally high standard and integrity of the administra-
tion; the realistic grasp of development problems among most people in
authority; the conservative and sound approach to questions of public finance,
as witnessed particularly by a high rate of public savings to finance invest-
ment; the ease with which the transition to independence was effected, and
the reasonably good prospects for maintenance of political stability.
While there are obvious deficiencies characteristic of a country which has
become independent within a very short time, these are generally realized
and efforts are being made to overcome them. It might be mentioned also
that the Sudan has an external debt of only IS 4 million, all owed in the
United Kingdom, which requires an average annual debt service of less than
IS 400,000 over the next decade (see Table 15, Statistical Appendix).
 -22-

hobreover, the government has no internal debt apart from that which was
rather artificially created when Treasury bills were issued in 1957 to
provide 50% of the currency cover.

Future Econoiic Growth

66. Above all, the country has demonstrated its capacity for economic
grorwth in t ne pest; and-t h+a so t h,e ecoro%mi,c p or-te+a-
t l -.
and cnapacitytor sus+,,
InVC+
a very satisfactory rate of progress in the future. Earlier in this report
indicators of thIe past
300
.A.iAA.Ut0.S.tt..
'JZ utci S (advance
.tA.V0.it'S we_r
W .e -
f5 ven.
.VOIt. Thel
*±L *.LO0.LL'. U..LJL e
Ur, tha
vlta +s the
+II-io
IA 'ilO

annual increase in real income in the monetized sector of the economy over
the last 6 years may wZll have averaged 6%. The potentialities of theL
country and the ways in which the government and private enterprise have
~~~~~~~~~~~-
set aboutu o realize them ave beuen uUscrlbeU.
-_ L_ _ *L
:1-
Ut-muye T1o
useulu, h1owever,
2n'_n1- L 2_

to particularize somewhat on the probable sources and extent of the increase

Inr production and exports which rmay be expected over the years immnediately
ahead, say by 1964-65. As in the past, the main focus will undoubtedly
be on agricultural development. While the expansion oI processing and
manufacturing industries may well accelerate, particularly with the
incentives to new enterprise held out by recently enacted legislation,
industry will continue to play a relatively small role.

67. Cotton. The MJanagil Extension, even if there is some lag in the
completion schedule, will add 260,000 feddans to the cotton area. This
might produce, after allowing for some decline in average yield owing to a
shorter irrigation period some 107 million lbs. of long-staple (lint); 1/
or, alternatively, perhaps as much as 156 million lbs. of American-type
cotton. In addition, private pumping schemes may be expected to expand
sufficiently to increase the area under cotton by an annual average of
20,000 feddans as compared with an average of 22,500 feddans over the last
5 years. Even at present prices pump schemes still yield an attractive
return on investment; and if the Agricultural Bank is established to assist
in financing, the development of pump irrigation may be further accelerated.
The additional cotton area under pump irrigation - 120,000 feddans over
6 years - might be expected to yield around 4 8 million lbs. of Sakel-type
cotton or perhaps 72 million lbs. of American-type cotton. 1/ The already
existing area in long-staple cotton produces on the average about 200 million
lbs. of lint; and that now under American cotton, which is now almost
wholly grown on rainland and may be expected to increase by at least 10%
over the next 6 years, accounts for about 26 million lbs. The probable
increase in output may be summed up as follows (in million lbs. of lint)

1/ This is based on an average yield, founded on past experience, of

4.6 kantars (460 lbs. of lint) per feddan, less about 10%. For private
pump schemes a slightly lower yield (400 lbs. lint per feddan) has been
assumed.
 -23-

on two alternative assumptions:

(I) (II)
With No Shift to With Shift to American-t.
American-type on New Areas

Sakel-type American-tvpe Total Sakel-type American-type Total

Current 200 26 226 200 26 226

I ._a
-- o,r a<<e 0a 1.01 OrNfI 0t-rr rr7

68. While the Sudan produces only about 2% of the world's output of cotton,
Lts sh'are in lthle pro du-ct'L0ion ofU
J lors Ltaple_ is abot
UUUU42p (1956-7 -I f lg-es). 0
A very large increase in Sudan's output of long-staple may therefore reduce
w 1_ 4L _ - n 'L _ _ J _! -- t 1- - _
UbsUtantiauly t1he prumi-ui whicLul tIht type of coUon enJoys over II
Midulug. -

The 1964-65 output of Sakel-type under assumption (I) set out above would
yield an export of about iS 50 million at tne current price oI around 40¢ per
lb. 1/, but if the price premium were cut by a third, i.e. by 40, the export
yield would be only 1.5 44.4 million. Tne total export value, inciuding the
American-type cotton valued at 28¢ per lb., would then be around IS 47.2
million under assumption (I). A similar calculation for the output under
assumption (II), retaining a price of 400 for Sakel and 28¢ for American-type,
produces a total export value of IS 53.1 million. It may be reasonable to
assume therefore that total lint exports by 1964-65 will reach IS 53 million
to which would have to be added about IS 10 million for the value of
cottonseed, cake and oil.

69. Other Products. In the rainlands the experience in recent years

points particularly to the prospect of a rapid expansion in mechanical
cultivation, probably by as much as 1 million feddans over the next 6 or 7
years. This should produce an additional 300,000-400,000 tons of dura,
maize and oilseeds. Nearly all of the output of these commercial farms is
likely to go into export, since subsistence farming covers the needs of
most of the population. It may be expected that exports of dura, and
oilseeds which averaged only 94,000 tons valued at LS 4.75 million in the
2-year period 1955-1956, will rise to a level of about IS 13 million by
1965. Exports of livestock and hides and skins, which rose from an average
value of IS 2.8 million per year in 1948-1950 to IS 3.4 million in 1954-1956,
may be expected to increase at about the same rate, reaching a total of
IS 4.5 million around 1965. In the longer run this type of export may well
grow more rapidly as the gradual penetration of the money economy will induce
tribesmen to regard their cattle more as a source of income than as a token
of wealth and prestige. Gum arabic is another product which will probably

1/ JIL~ U1Ws O.VU.&r

Tiis 4.o.J a Li. o Pi eL forL acual -les of the v"arlous
types and grades of long staple cotton, including Lambert type cotton,
since the 'last reduction of the reseve pces. ±L- genera ti report
follows the usual Sudanese practice of including Lambert cotton under
the term "-Sakel_-type-.
 -24-

be exported in increasing quantity, since the expansion of means of transport

will open up new areas to be tapped and the market for gum appears to be
strong. Average annual exports rose 20% in volume and 135% in value from
the 3-year period 194 8-1950 to the 3-year period 1954-1956. On this basis
an annual increase of 5% in the value of this export might well be expected,
lifting it to an amount of IS 7.2 million by 1965.

70. Taking into account the expected development of the principal exports
discussed above and allowing for a modest increase in the relatively small
residual exports, the total value of Sudan's exports in 6 to 8 years may
be around L3 94 million of which about 67% would consist of cotton and
cotton products. This can, of course, be taken only as an indication of
approximate magnitude subject to a margin of error either way. The question
necessarily arises whether this continued rather marlked dependence on cotton
makes the economy unusually vulnerable. The Mission has already expressed
the belief that the Sudan should be able to sell its cotton as long as
proper marketing policies are followed. A study of world cotton prospects
which is being completed by the Bank's Economic Staff indicates that raw
cotton consumption can be expected to increase during the next decade despite
the competition of other fibres, including svntheties; and the Sudan. with
its comparatively low production costs, should be able to obtain a good share
of this expanding market.

71. In the long run, however, further diversification of the econonvr

would undoubtedly be desirable, and the government recognizes this need.
The Mission has alreadyr stressed the ilmortance of orienting the agricultural
research program in the direction of introducing a greater range of crops in
the rotation system on irrigated areas. The Tozi research farm has pointed
to the possibilities of more diversified cropping of the rainlands. There
appear to be good possibilities of gro-wng sugar cane, particularly in the%
south. Extensive field trials conducted by the firm Boxall & Co. since
1951 on the alluvial plain at l4ongal1a in Equatoria have indicated the
possibility of achieving annual yields of 10.6-12.2 tons of cane, equivalent
to 1927-1.zA- tons of raw sugar, feddan under p,Ap irrigatlon. Sufflent
suitable land is reported to be available to produce enough sugar to cover
the country's requirements, although there ry be a probleem of obtaining
all the necessary labor. Negotiations regarding a concession, in which
foreign capital is reportedly interested, are under way. Limited Lield
trials which are being expanded point to a long-term prospect of developing
a considerable output of robusta and, to a rmiore limited extent, arabica
coffee in certain areas of deep soils in the extreme south and in the Jebel
.Mrra range and the plains to the west of these ,ountains in Darfur province.
In the south there are also potentialities for the production of cacao,
pireapples and possibly tea, although it will probably take a long time to
realize them.

72. As is indicated in a special note in the Appendix, government revenues

over the next - years will probably rise by at least IS 25 million as a
result of the expansion of the economy together with some increase in taxation
 -25-

which the government intends to carry out. Allowing for an anticipated rise
in recurring expenditures, the government should be able to achieve increas-
ing surpluses on the ordinary budget, attaining an annual total of well over
IS 10 million after about 5 years. In addition the railways will nrobablv
continue to generate net revenues of at least IS 2 million per year. All
this should rnovide a substantial Tnmrgin for hoth development emcnendibt,res
and external debt service. In the next five years, however, the financial
ci tuiaton may well 'h tight, rPn1iirirv an nn oui attifMurl on the nprt of the
government in undertaking new development projects. So far the government
has certainly been conscious of the need for keeping the rise in development
outlays within the limits of prospectively available resources.
 p4

(NZ H
rJ)

tj4
 -26-

Table I

AREA ANDOUTrPUT OF COITUN: 1946-1957

S a k e 1 'r y p e_ _ A me r i c a n T yp _ _p_

I'otal Grai t IrrLgation Pi Irigatio Flood Irrigation Total. Irriiated Rain Grown
Kantxs Kanrta Kartirs Kan' Karitars km tars
per per per per per p Fr per
Yesw Area YielLd Feddani Area Yield Feddan Area Yield Feddan Area Yield Feddian Area Yieli Feddan Area Yield Feddan Areia Yield Feddan

1946-47 3114 1,046 3.3 214 835 3.9 20 66 3.3 80 145 1.8 9 l5 1.6 3 9 3.0 6 7 1.1

19247-248 3124 984 3.1 216 731 3.4 22 75 3.14 42 178 4.2 36 56 1.6 5 314 2.8 31 32 1.0

1948-49 307 1,146 3.7 217 923 4.2 23 94 4.1 67 131 1,8 80 93 1.2 C 18 3.6 75 75 1.0

19109-50 31.9 1j2240 3.9 217 993 L4.5 28 110 3.9 75 137 1.8 95 102 1.1 7 13 1.7 89? 79 0.9

1950-51 3.37 1,849 5.5 218 1,442 6.6 31 194 6.2 128 203 1.6 135 121 .9 7 25 3.6 135, 121 0.9

1951-52 3424 9ZL 2.7 232 711 3.1 43 122 2.8 69 87 1.3 206 290 1-.4 16 37 2.3 19( 252 1.3

19';2-53 1400 1,533 3.8 '145 1,148 14.' 59 246 4.2 97 139 l.14 197 252 1.3 10 31 3.1 1814 x218 1.2

1953-54 435 1,590 3.6 2145 1,14)L 4.1 65 283 4.4 125 166 1.3 193 2614 1.14 6 22 3.3 1824 235 1.3

19524-55 1400 1,547 3.8 245 1,052 4.6 100 1426 4.3 55 69 1.3 260 330) 1.3 7 I2 3.1 31( 302 1.0

1955-56 399 1,81Lo 4.8 249 1,192 14.7, 114 537 IJ.7 36 80 2.2 179 249 1.4 9 20 2.2 168 226 1.4

1956-57 575 2,689 4.7 255 I,T16 6.7, :16 801 5.3 168 172 1.0 160 1714 1.1 3L 29 2.7 150 31iS 1.0

NoLe: Area in 1,000 Feddan

Yields in 1,000 Kanteatr (1 Kantar a 100 pounds of lint ootlzn)
 -27-

Table 2

EXPOiTS AND EK.POT PRTCES OF FAW COTTON

1l49 1950 1951 1952 1953 195h 1955 1956

Sakel Type

Total exports
i;n Yar.taars
(000) 1,338 1,360 1,997 944 1,747 1,060 1,795 2,266

Total value
in LE (
t ' 18, 7 21,109 ' 17
37(7 nV 1 O2r' V37 1 ,13 1
8I. 26,707 DPee
in LaTh u 3 .UUUJ10
V1 eXLUA 14-)y ~I L"4U~ &)I4U...j).
.. J ~~~
Average price
per Kantar
in IM 1353 15.c1 21.93:1 2. 13.59
34.IO ll".( 16.61

per poua94
(Us j)a/ 55.92 45.41 62.98 74.41 39.03 49.11 42.71 47.70
American Type

Total export
in Kantars
(000) 110 106 137 279 238 267 290 270

Total value
in LE (000) 925 1,214 2,507 4,423 2,760 3,332 3,415 2,881

Average price
per Kantar
in LE 8.40 11.41 18.66 15.45 11.60 12.48 11.77 10.67

per pound
(us /) 34.72 32.77 53.59 44.37 33.32 35.84 33.80 30.64

a/ Exchange rate: 1 LE = $4.133 before September 1949

1 LE = $2.872 after September 1949

The calculations for 1949 have been based on the pre-September rate.
 -28-
Table 2a

r7,7T1P. ROA T! R'hEF

kV PPTCYS ON COTTON

:Staple :
Main Grades:ien^hP
: in
:32n5ct f' 1955 1956 1957
:1 inch :31/1: 5/5: 20/7 :12/3 21/4 :21/7: 14/3: 28/5: 22/8 : 4/11:19/11

1.Sakel

GS 50 1850 2050 2100 2600 2160 2010 2010 1950

G2S 50 1760 1730 1970 2020 2025 2500 2060 1910 1910 1845

G3S 149 1675 1635 1870 1930 1975 2330 1960 1810 1710 1680

G4S 47 1780 1550 1525 1850 1900 2230 1860 1710 1610 1580

G5S 46 1680 11425 1420 1750 1800 1730 1580 1480 14140

&6S 45 1580 1330 1330 1650 1650 1560 1410 1310 1260

CG6S n.a. 1280 1280 1550 11430 1280 1140 1170

DG6S n.a. 1135 1400 1130 1000 1070

2 T.amb_h+.

MI. Ern -1 ,70 'I 470

C2L 148 1500 11450 1730 1800 2120 1590 11490 1490
GIT. JRi ).ilr) -i i iA -i Jn)- CV4
rn 1, o i,- E•i ( 1 i -i r- 1on

G3L, )A 1 1325
If 136c01 1600n 1510 11'0 1290

Gc.T. )11J 109n 1)n IIon 19i9 l ic:in 19 on i an uqn

5lAT '1425, 1I2I40 11i9n 155700 '-n

120r 1n9n -8rn

nr6Tvu- ~ ~ ~ 4' -J- - -- ~-', 110

- --,'" -
-1 nnn -
147
I '-' 47I i~ '.
_4) ALJLJ'
CC-6L n.a. 13&0 1155
1'00 1050 11420 1380 1030 930 10140
no3 e1018018

"G6L ~~~n.a. 1000jv- 1250j 970-) Ulu 80

a| In piasters (1 piaster = 0.01 LS) per 100 pounds net weight

(1 kantar) of lint cotton ex store Port -udan.
 -2,9-

(LS18830)

1948 19419 1950/51 19511/52 1952/53 1953/54 1954(5j5 Aatioillatd

A. *LSW.ZAUIZSS
1. Anm l ax 3135 5 8 14 17 7 10
2. iasines i Profits Ia 464 86.5 651L 3,251 i.6z4 1.510 1.940 1.797
3. ]And Tom: 1 I 2 1I 2 7 9
4. Ploll Tax: 30 34 ?1 2.4 12 13 8 6
5. Tribute 226 237 482! 226 205 186 94 9
6. trsoter 18 17 52 52 26 26 12 1
7. Contribution from L. Govroreat 254 24.3 3M 265 218 238 260 266
8. hA.t Taz

Total Direct Tantion 1.071 1,4831 1.757 3.8Ws 2,176 2.1-27 2.342 2. 150

D. "AL2S19
1.Import 101ss 2. 885 3.391 6.539o 6.728 7,248 8,176 8.1*16 S. 7o1
2. CIonsup,tion Dtitts 388 33:3 595 5813 735 615 1.225 1.2*11
3. hale. Suitesn - - - - - 6 8 64
4. 2bco rt SoLtsa 923 1. 901 8.548i 8.211 4 338 4,068 3.026 5.788
5. EbxportRoyralties - - - hI/ - IL/ 1.162 1.715 I1.614 2.001l
6. AdJustments of Ditiss with Bgpt 192 19o 26l 250 252 347 406 W.'?
7, Niscallansons .... .9.aiL )± - 44 =-
Total Indirect ?zntion, 4,1406 5,909 15.987. 15.86-1 13.768 14.927 14,426 18.222

C. EAA&ZUMPMgI 7,13 841J 8J6" - 1,361 3.098 4.998 4,92

D. flf l1i 10) 26i 18 16 13 6
I. k1CM JkWA 75 813 190 1,53 166 183 216 188
P. fllt14 1:3 3). 35 7 106 89 ii
a. .JD.S Ea2ED.fl&i PLL.. ESU)RC 2.44.1 2.8383 5 688 5.3fO 5,288 3.191 3,689 3.9±0;
R. AUIUMLM
M M-UUA MT TnTIM IN~13 169~ 285 2C4? 260 184 208 23.9
j, 99AW 491 6a1 1,69? 1.478S 229 32 47 38

K. aa m nT Fag=z - - - - -xo 32 6

1. Tour cotton2W106a8 Y 5
2. Gash Board Cotton 261 417? 440) 632 333 284 164 1214
3. ldab Mountains Cotton 14 91L 505 5594 255 369 449 2E88
U. White Nile Rehoese Board Cotton 313 400) 569 1,214 519 297 34+7 375
5. Gestow Board Cotton 4,905 5.550 12.2.108 15.7515 2,768 5.119 5.849 6.706
6. Thor Aba Habi Cotton I - 6 7 11 34 23 12
7.Kachonlsed Crep Production Ghrain etc. 11 2: 28 45 57 35 35 3

1. Interest on Miarkstabl1s Secnr.Lties & Bank Dep.) ))))) 603 698 444
2. Interest on Izvestasut in Governernt Boards 3447 3 411? 3 4 712 31,770 3 1=04 1,025 702
3. InterestoanLosns 333333 46 588
N. gm 2L.
s 2n Oz 126 1213 237 294 230 213 219 185
o. UN PI 1MM - - - 718 246 348

GranudTotal 15.735 19.172 41.867, 46,3CC 30,296 35,436 :38,

111 42.1312

~/Included in Q, (Royalties)
 -30-
Table 4

CLASSIFICATI OP! OF GOVER TTENT REVENUES

(1000 LS)

: Budgeted: Actual revenue :Actual di--Actual in-: Actual non-tax

Year eeu
: iP:veue: To0Lfi -'ndex:rec4-4+- -
' C-lVwr -;rect te:
: : :1948= :receipts :receipts :From Gov-
:100 :: Total :e ,ret
:participa-
: : : : : : ~~~~~~~~~~:tion
in
:cotton

-IX8 11J4(, r 107 1,171 iuor

4 10,258

195n1/52 24,~~~784 -623 29D 3,82 15,86 26,41) 18,261U

jI

1952/53 28,721 30,296 193 2,176 13,768 lh,35i

0,767

l953/5h 28,h37 35,h36 225 2,127 lh,927 18,383 6,hb8

l95h/55 36,112 38,111 212 2,312 lh,h26 21,312 6,858

1956j57 37,502 n.a. _ 2,03Q/' iI,183/ 21,288_/- n.a.>/

1957j58 4558 n.a. _ 1,385_/ 19,930U.b/ 2h,270_/ n.a._J

S/ Converted to a one-year basis by nniltiplyng original figures, which refer

to period Jarnialy 1, 1950 - June 30, l9591 (l12 years), by the factor 2/3.

b/ Anticipated instead of actual figures.

j Budget instead of actual figures.

 -31-

Table S

N
GOVEEe WENT EECUMFIN EXPBNDITURES l948-lsS7/K8
-- -ll'on
T.S.i

Catezory 1948-31944/5 s iz 92sH9-/4

IvYUM 1Y94159 1955jRt 195f.)17 19-57/5b

1. Palace of the Republic 0.02 0.03 o.o6 0.05 o.o6 0.08 0.09 0.09 0.07 0.09

2. Psj,liament a_d Constitutinnol

CommissionS - 0.05 0.08 0.08 0.03 0.13 0.17 0.16 0.15 0.17

1. -ancil.oflM'n'sters = = = = .0 0.04 0.08 0.04 0.0

4. Ministry of Agricalture 1.00 1.10 2.36 2.00 2.31 2.70 3.32 3.15 2.97 3.24

5. Ministry of Animal Resources 0.18 0.16 0.36 0.35 0.Li0 o.46 0.48 0.50 0.45 0.52

6. Ministry of Commerce, Industry

and Supply 0.07 o.o6 0.11 0.11 0.10 0.10 0.09 0-05 0-05 o.o6
7. Ministry of Defense o.65 o.60 1.60 1.53 1.72 1.92 2.47 2.71 3.76 4.80

8. M,1n-sStT- of Commlinication o=68 O-Q5 I-as I -AC 2.23 2-53 2=63A 2.4b 2.60 3.03-
9. Ministry of Iorks 0.49 0.58 1.41 1.69 2.13 2.60 2-75 2.64 3.61 4.05

10. Ministry of Irrigation and

Bydro Electric Power 0.92 0.97 1.70 1.36 1.63 1.58 1.66 1.60 1.68 1.75

U1. Ministry of Mineral Resources 0.07 0.08 0.18 0.19 0.18 0.26 0.27 0.28 0-33 0.41

12. Ministry of Finance 1.10 1.42 1.53 1.40 1.92 1.91 1.76 2.71 2.68 3.20

13. Ministry of Poreign Affairs 0.07 0.08 0.12 0.21 0.17 0.15 0.16 0.15 0.55 o.65

14. Ministry of Interior 0.14 0.12 0.17 0.12 0.26 0.27 0.24 0.20 0.18 0.22

15. Ministry of Local Goverrments - - - 0.04 0.48 0.48 0.36 0.43 0.49 0.62

16. Ministry of Education o.68 0.79 1.67 1.53 1.81 2.74 3.18 2.98 4.44 5.69
17. Ministry of Health 0.90 1.02 2.17 2.03 2.32 2.66 2.99 2.91 2.79 3.35

18. Ministry of Social Affairs 0.10 0.13 0.21 0.23 0.30 0.35 0.36 0.39 o.46 o.66

19. Ministry of Justice 0.15 0.16 0.30 0.30 0.30 0.02 0.04 0.10 0.12 0.19
20 Jjudi ry - - - - - O 0.31 0.32 0.30 0.37

21. General Central Services 1.33 1.48 3.06 2.27 3.00 2.57 3-56 4.70 3-55 3.72
22. Provinces 1.74 1.99 4.38 4.07 4.25 3.77 3.60 3-32 2.99 3.64

23. Audit 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03

Grand Total-f- 10.32 11.77 23.6o 21-53 25.66 27.61 30.S9 31.81 34.37 40.38

&/ Jigures for 1948-1954/55 refer to actual expenditures, figures for 1955/56 give anticipated expenditures,
1956/5? and 1957/58 are budget figures.

F
Jigures covering 1-1/2 years period (1 January-30 June 1951).

!otals do not exactly &dA becamse of rounding.

T
 Table 6

BAIANCE OF GOVEBNIPENT IINCOMIE ADT EXPENDITURE

(LE I000)

Year : Total : Total re- :Balance bet- : Total develop- : Overall

: rever.ue: c,t'ret
nweern reve.1e: m-ent. eenA4 t+, : Rc 1 n n'ce-
expenditures:and recurrent:
: : z~~~~expenditure::

1948 15,7 10.3 5.4 1.9 3.5

1949 19,2 11.8 7.h 2.6 h.8
1950/51_/ 27.9 15.7 12.2 2.8 9.4
1951/52 h6.2 21.5 24.7 4.7 20.0
1952/53 30.3 25.7 h.6 5.4h - 0.8
1953/5h 35.h 27.6 7.8 7.5 0.3
1954/55 38.1 30.6 7.5 7.3 0.2
1955/56 h2.1 31.8 10.2 8.h 1.8
1956/57 37.5_/ 34h.4/ 3.1 16.6Y -13.5L/
1957/58 h456Y/ 40h11Y 5.2 22.6M/ -17/0/

a/ On a one-year basis.

b/ Budget figures. For the year 1956/57 actual development expenditures

amounted to some LS 5 mi Iion as compared to tne budget figure of
IS 16.6 million, so that the overall deficit for that year, if any,
will only be small. Although the cotton marKezing situation nad a
depressing effect on revenues in the year 1957/58, income from import
duties and the sugar monopoly exceeded expectations and current
expenditure remained below the estimated figures. On balance the
actual surplus on the general budget for 1957/58 wi-l probably be near
the estimated figure of LS 5.2 million; little is known of actual
development expenditures in 1957/58.
 -33-
Table 7

GOVERNiENT EXPENDITURES

(LE l,nOn)

Recurring Development / Total Expenditures

Expenditures Exnenditures- Actual
Index:
Budget Acthal TRimit A t-.al THielt
Total I )oiR-imn
l9L8R ____5 l0j319 2 8),7b/ I Qh/ 12,862 12A259 100

19)C) 11A571 11,772 5 QOA 9 I29,7 1), 179 1), 390 117

1% ~~~
I Qcn /rU-ioi:~~~~-i
s-i /~~~s
gooCl -,Y1~ 72
E 711
)5 C/ o 70'IC/ Io Q,nC/
- Y_7j I 'rI.- ,'-IA,oC'-7C/
-1 rn1_
-/- v

1951/52
21966 21,z2 8,2v8U,7l 30,20L) 26,U27 21L
-1 Qc11 /[S1. oni nrK
195_//5
26,v7 '- i:) o
25,659 p ') -.
8,895r n I)no
(3 L4(1
5llU -.r mnnl
0LJA )4 )^n 1-1
262

195h/55
7. - / i.- '.)
.-
',
32,592 ~
I - ~
30,589 10,092
--) U;,;)
7,337
L4 142 ,6814 37,926 309
i955/56 314,176 31,809 i2,821 8,_432 _46,997 140,2141 328

i956/57
34,370 n.a. 16,600 5,3_ 50,973 n,a,.
1957/58 r40,380 n,a. 13,502 n,a. 63,028 n.a.
/ 9, 1146,/
a/ The development expenditures for the years 194f-19$r)5lrefer to the old
-19146/51 development program. Development expenditures as from 1951/52 in-
clude expenditures under the new 1951j56 development program and expendi-
tures on uncompleted items of the 19146/51 program; actual expenditures under
this old program in consecutive years from 1951/52 are (1,000 LS): 1,295;
718; 1433; 299 and 95; from 1956/57 onwrard no more expenditures under this
heading have been incurred.

b/ Converted to 12 months basis from available figures for the period

October 1, 19L7 - December 31, 19248.

c/ Converted to 12 months basis from available figures for October 1,

1950 - June 30, 1951.

d/ Actual expenditures up till May 31, 1957.

e/ Budget expenditures under 1951/56 Development Program together with

Mtanail (1oun million) and budget 19 5 u ra l underNew
expenditures
Schemes Program (9.15 million).
 -3 +-

Table 8

3951/5,o6DEFVLOF%tIT FlSGUfM

(Actual &xpenditures)
(LS 1,000)
Budget est.
TotaL 1957/58
1951/52- (incl. new
Categfy 1951/52 1952/53 1953/54 1954/55 1955/56 1 1956/57 schemes budget)

I. rigtion 121 284 807 3T7 499 1,778 3,865 10,367

a. Managil 2 4 13 313 1,3 1,99, 10,209

b. Ouneid 1 42 583 327 120 30 1,104
c. Roseires 9 102 115 - 56 73 354 124
A .Jebel - - - 6 6 314

II. Agricut 201 1.021 873 814 468 152 3,529 1,877

a. Cotton 27 98 145 118 26 21 436 68

b. Rural water supply and
soil conservation - 521 107 23 103 3 757 330
c. Haffir excav. _ - 227 228 77 28 560 530
d. Agricultural research
and exten. 76 177 122 112 61 9 557 431
o. Animal huabmdry 52 55 33 21 13 21 194 142
f. Forestrzy 12 41 38 23 18 11 142 98
g. Drilling - - 99 121 85 24 328 148

III. Mining and Industries 4 11 106 13 161 22

IV. Topographic al and other

surveys 40 56 49 66 51 30 292 67
V. Trans,, an1 Comunications 939 952 1.231 2,770 3,590 1,L3M 10,521 3.204
Wfiic h:
a. RaiTay - - - 2,250 3,250 800 6,300 1,500
6
b. Roads 749 466 4r 0 150 134 70 2,029 580
c. Aerodromes 77 138 145 37 1 10 408 575
d.Airays 17 20 106 39 - 40 222 20
e. Telecacmunicationa 92 3i18 484 283 174 l10 1,461 447
f. P.At~ and Telegraphq Offices 2 3 10 10 29 9 64 87
V1. Soci. ' Se .c elA 1 l.a 1Se I7 ace 6.979
-
of which:
a. Educitional buildings 266 572 660 615 850 498 3,462 2,463
bI- tmat.
, n4 q,pl ment 46 112 105 88 236 41 627 129
c. Educatlonal subventiom 68 22 104 97 61 37 388 39
d. Hositals and dispensariBs 144 237 492 436 344 210 1,863 694

VIo. Pitlic utilitie51 5 915 812 914 483 4.236 1,268

a. Advances to Sudan Light
& Pacer Co. 471 525 750 550 516 23D 3,042 500
b. ': ater 3 29 74 121 231 105 563 389
VIII. unicipa and local Guv't
sche!sla l o 139 816 74 221 184 2,007 408

a. Grsatand loans to local

gov't. 573 13 316 74 71 100 1,273 400
b. Sewse loan to Khartoun - 500 - 150 84 734

XI. Defense - - 22 109 66 60 257 129

XII. Police ad Prisons 10 19 41 44 46 94 254 264

of whicha
a. Bui1dings 9 19 39 44 23 50 183 264
XIII. MiascdLlaneoa and Gneml 488 551 795 655 64B 364 3.5M 1.4
Acbt inm tratLon

a. Goveramant buidldisg
azanistaff hewting 344 392 520 303 246 208 2,013 775
b= Mech.,4-1 t apart 12O5 in)- 1- 58 12 2i6 A
c. Brado wtng - 3 3 1 59 2 68 15
d. CensaU - 10 6 96 204 101 418

RAMDMTAL 3452 4.T29 7.046 7.037 8.36 5.033 3 5.622/ 22,648

^/ Actml experditure 1956/57 up to hay 31* 1957.

Ty des only wt and electricity suppy; apart from advames t Sudan Liixt and Parer Co. thwe are smll
adncea to Wad Medani L1ht and Parw C., and sor outlayu fer smail eooimd *lectricit' and ater Bchaes.
/ T dsvalnint expendLtures o'r 1951/52-195557 are IB 38,473,000t tbuy ilude expenditures of
LS 2,810,0W from 1946l1 Dsevelpmst Program.
 Table 9

LOCAL COUJNCILSI INVESTIENT EXPENDITURES

(1.000 LS)

nther From Prom

Roads Capital Councils Central
and water Txnrendi- Gapital rov_
Year Buildings Drains Supply tures Total Account Grants

51/52 106 65 8 72 251 152 99

52/53 318 79 16 107 520 389 131

53/54 333 60 23 102 518 426 91

54/55 L34 91 W2 182 749 682 67

55/56 3U1 85 65 134 625 576 49

 -36-

Table 10

T..7,h rOF 'TOTC'TTT,L 0\MT UATT1r'

7 PC P0PP7TtT\T TPIAT)

Year Im p o r t s x p o r ts

Value Volume Value Volumne

'I nn 0 1-i- r%13 i4 -L A?

-LY-)-L-L (-) .±7~~~~f i.

1938 00.0 100.0 100.0 100.0
yDu -LU -U .w
u {y. UOU

1954 95.5 100.2 91.6 78.9

195 96.1 103.7 113.9 106.3

1956 88.7 94.9 51 29.5

SOURCE: Figures supplied to the Bank 15ission by G.H. Harvey, Director,

Department of Statistics, Sudan.
 -:37-

,% X$BLN OF I U jI5IONAL PA

(LE million)

lstlf_9_19_ 1,954 1953 1952L1 a2 L

- - - ~~~~~~~~~~~~~~~~~r e r D Nt~ r Ne r: D Net Cr Dr Ne3t Cr :Dr :Net :..JL. D i
A. 2=n rmecin
1. Merchandize 24.0o 33.1 -9.1 71.8 48.2 +23.6 56. 1 51.2 + 4.9 45.7' 48.6 -2.9 45. 31 46.7 - ..
4 47.0 60.3 -13.3 747 3. 66
2. Non-monetary gold - -. - - -

3. Foreign travel 0.1 0).8 -0.7 0.2 1.0 - 0.8 0.0 1.4 1.4 0.2- 1.9 -1.7 0.2 2.1 'I .9 0.2 1.7 -- 1.5 0.1 1.8 - 1.7
4. Transportation 0.2 31.0 -2.8 0.3 1.6 - 1.2 0.3 1.0 0.7 0.2 0O.6 0.4
. 0.3 0.6 - 0.3 0.5 0.4 + 0.1 0.1 0.3 - 0.2
5. Inourance - 0. 2 -0.2 - 0.2 - 0.2 - 0.3 -0.3 - 0.2 -0. 2 - 0.3 03
I- - 0.1 0.1 0.8 0.1 + 0.7
6. investment income 0.5 0.4 4* 0.1 0.9 0.8 + 0.1 0.5 0.9 0.14 0.8 0.7 + 0.1 0.8 0.4 + o.4 0.8 0.8 0.0 0.5 1.5 - 1.0

7. Government MDt inc:luded

elsewhere 0.7 1.5 - 0.8 1.3 2.0 - 0.7 1.8 3.3 -1.5 1. 7 1.5 + 0.2 1.8 1.2 + iD.6 1.9 0.8 1.1 0.4 0.4 + 0.0
8. Miacelleneons 1.9 2. 1 - 0.2 1.0 3.2 - 2.2 - 3.6 3.6 0.1. 2.4 - 2.:3 - 2.6 - ~2.60.3 0.7 -0.4 0.1 0.1 - 0.0
9. Donations - 3 01 . -. 0.6 *9.0 1.uL 1.4 O., 13 -1WL2 L .6 -Li.5 0.1 - 0) 0 0.1
10. Total cuirrent transaactiorLe 27.4 41.4 -14.0 75.6 57.7 +17.9 9q.
0 63.3 4.3 48. 8 57.3 - 8.5 48.5 55.6 - '7.1 0.7 64.9 .14.2z 76.9 42.3 .3~4.6

Errors and oimissionis (16-10) - 0.1 + 0.1 + 0.7 + 1.0I + 0.3 -0.4 -0.1

,.Movemet Col

11. Long term capital +2.3) - 0.2 + 2.5 - 0.1 - 0.4 +0.3 - 0.5 - 0.4 -0o.1 - 1.0-1.3 +0.~3 + 0.2 - 1.1 + 1.3 +0.0 - +0.0 +0.0 + 0.2 - 0.2
12. Short term cappital -18.:L-a. 1.3 -19.4 + 1.8 - 1.5 + 3.3 4.1 1.3 . 2.8 - 2. 2 - 2- 2 - 8.7 - - 8.7 -13.5 4.0.2 -13.7 .16.2 - .:16. 2

13. long term capital +14 .z~J- 4.39I +18.5 - 3.6 - 0.8 - 2.8 - 7.1 - 0.5 6.6 - 6.cC 0.5 55
- + 0.2 - 0.5 + I0.? + 3.1 4* 0.6 + 3.7 .11.7 -0.4 +1L2.1
14. Short term caipital -14.5A/+ 1.2 -15.7 +17.2 - +17.2 0.3 - +0.3 - 0.1 - - .1i - 0.2 - - 0.2 -4. -4.7 + 6.4 + 6.4

gold -16. 1 - 2.0 -14.1 +15.3 - 2.7 +18.0 - 3.2 0.4 3.6 - 9.3 -1.8 7-7.5- 8.4 - 1.6 - 6.8 - - -14.6 +34.3 -0.2 +:34.5
~]Repatriation of EF'ptian currency
notes.
~/Sterling secuirities; received from
Egy-pt as a, result of cuxrrency exchange.
S-/ Almost completely repayment of government debt to Rgypt.
i/ Mainly decrease in Sudan govorasnent holdings of British Treasury bills.
 -38-
Table 12

PMINCIPAL IIAEILITIES AND ASSETS OF BAEKS OPERATING

IN THE SUDANa

(TS TniIII n)

EnWd of: Tnosnni :', A dr v n c ea

Total:Government : Total :Cotton :Other:Indus-:Capital :Imports:Retail
: :and Govern-: : :cros:t.-Y :const,c-: -and
:ment Boards: :tion :per-
: *iandAgen : : ::sonal
.

1951 27.1 n.a. 2.5 0.1 0.1 0.1 0.1 1.5 0.2

1953 16.6 n.a. 9.1 0.5 1.6 2.3 0.4 2.9 0.4

,rl I r nn 1. -i n r' o
1 r% ') o) rn £ ' r' cn *

±)-Ly%
1954~~ 1.4. 124
I..~
19.
J.7 )
9.
7 ev
2.
£.U %
2..6
L. %.0
2La)- .7

1955 30.8 17.7 22.8 10.0 3.6 1.2 0. .5 0.9

1956 31.3 19.5 22.9 9.1 ~.1 0.) 1.9 3.2 0.6

a/ The breakdown of total advances is quoted ' frm an aruay±ia of uaium

credit of Nay 22, 1956 and April 6, 1957 by Sir John Canmichael,
Financial Adviser to the Sudan Government. It should be treated with
reserve, because the banks did not maintain a detailed breakdown of
their advances.
 -39-
Table 13

GOLD A1TD FORE0 a EXCHANGE RESERVES2/

1952-l956

(million LE)

Dec. 31 of : T o t a 1 : Held by :Held by : Held by

: Eg:vtian : Other : Total : Government: Govermment: Banks
: assetsy/ :B ards and:
Agencies :

1952 3.8 44.0 47.8 28.9 3.1 15.9

19N3 3.7 39.9 L3.-6 32.3 3.8 7=5

1954 5.0 29.2 3_.2 25.0 3.8 5.4

195Q 6.A 31,3 28.1 16.5 3.7 7.9

1956 8.3 36.5 44L8 30.5 3.7 10.6

Note: Assets valued at nominal value.

LV
/ v-
\|
A, 1,.Ar
Ua~..4.4je,,
r
*s
h +U 1, .ne
IJO .Jw1L9
Af
V.J
a-v +_
j Jt.JJILtMLSJ
.A-,,A,
0. | 0
4
+
AIf0.f'JO
C

b/ Balances in Egyptian Pounds of Sudan Banks with National Bank of Egypt,

nevro. inclued Egytn assets es.e-.4
ar.d-Go - 4-Bva us and A
never included Egyptian assets.
 Table 14

DEVELOPIMENT OF GOLD AND FORE;IGN EXCHAIJNGE, RESEWES INI 19575

(IS millions; nominal value)

31 Dec.1956 9 Feb.1957 13 Apr.1957 26 Oct.1957 14 Dec.1957
I. on-Egyptian
(in ;, Sterling)

Held by Banks

a. Dollar account n.a. o.6 0.5 0.3 0o4

b. Sterling account n.a. 0.1 0.1 0.0 0.0

Total 2.3 0.7 0.6 0.3 0.4

Held by Government

a. Cash n.a. 0.9 1.3 0.3 o.6

b. Treasury Bills n.a. 12.0 8.9 0.9 0.9

c. Securities n.a. 15.6 15.6 12.4 8.9

Total 30.5 28.5 25.8 13.5 10.4

Held by Government
BDankr-s andu Insti-LUt-Lution
'r- -4 -4- - -4£ - -

Se curities 3. . . . .

Paa,r.ents A-eement+s
(excl. of Egypt)
Net Balance n.a. 0.9 0.5 0.2 0.3

Total 36.5 33.7 30.5 17.6 13.0

(excl. of pay-
ments agreements
balance)

31 Dec.1956 28 Feb.1957 14 Dec.1957

II. Egyptian Account
in n Egyptian)
Credit Balances of Sudan Banks
vsith NBE, Cairo 8.37.-
wmecTnl AG'G11nt -9=4
Payments Account - 2.9

Total 8.3 7.0 12.3

/a Excluding iS 12.1 million held by the Currency Board.

 r -::I CN (' .: ON\ _.4 _: H C)\ I ON rn z
CMi CO
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C)s) Lre
Lrs
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C)ff\Ca C! r\ rr Zr r D (D e)
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r-l r-l r-l a0bD
.

C) U\ O 0rl CM ct^ C\J ( CM (n CM CM 1r U

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C) H Lr C) C 0 C) (D (D (D 0 (D (D N 4- 4-
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CM 0 .4_= a5
U) a 0Of If\ 0\ \ H r)
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4-ON ' 0 )\C
Or^t)rQ r-P rd-4,i

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u--I~~~~~~~~~~~~~~~~~~~~~~~I
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L' i'I . ' N\ \O
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 -42-

rflnvY lIT? fl ,ir TrnAmnT tfl¶nr"rniw m tTmTfirrro

NUC
N1Mil vil A14 WrXA MU VUVD rillXii v fiNUr-
AND RECURRENr EXPENDITURES

A. Recurrent Expenditures

1. The general budget for 1957/58 puts total recurrent expenditures

at IS 40.30 million but the latest estimate 01 acbual expen1diur-es iS
IS 38.5 million. In 1955/56 - the year when the Sudan obtained full in-
t
depeu-nence - total recurrent expenditures had ad ~~~~.tn - 4
ouMntUd .~w T 31e, ,±.o
"n --
mill-io, -

so that over the first two years of independence an increase of about

I3 6.7 million has occurred. Part of this increase, however, was of a
temporary nature occasioned by the new status of the republic; expenditures
for Foreign Affairs, for example, had to be increased in one year's time
by some IS 0.5 million; special expenditures for Defense such as new
buildings under the Public *works' budget are also unlikely to recur.
Eliminating these factors, normal recurrent expenditures only went up by
some IS 2 million per year. This is approximately the same figure as that
for the two preceeding years (1953/54-1955/56) when total recurrent expendi-
tures rose from IS 27.6 million to IS 31.8 million. For the total period
for which actual figures are available (1948-1955/56) the average is
somewhat higher, namely LS 2.8 million per year.

2. In the following it has been assumed that, barring exceptional

circumstances, future increases in recurrent expenditures will be strictly
confined to the level of about IS 2 million per year reached in the last
few years.

3. To this figure has to be added an extra amount of IS 0.3 million

each time a new phase of Managil comes under production for the additional
services that the Ministry of Irrigation will have to supply for its part
in the operation and maintenance of the new scheme. (For the Gezira
scheme these services involve an expenditure of LS 1.2 million per year.)

B. Revenues

4. The total government revenue has been budgeted at IS 45.6 million

for 1957/5o. Tis figure is based on a cotton crop and on cotton prices
above the level which can be expected for the next decade. Taking an
average yield of 4.6 kantars per feddan 1/ and the current export price oI
400 per pound, revenue would have been some IS 7.5 million lower. On
the other hand, non-cotton returns are usually underestimated in the budget
so that the real figure adjusted for normal cotton proceeds may well be in

/ It can be assumed that the yield of Sakel type cotton in the Gezira,
where adequate irrigation water will remain available, will over the
coming years average the normal figure of 4.6 kantars per feddan.
 -43-

the neighbourhood of LS 41.5 million. This is well in line wihn actual

(anticipated) revenue for the year 1955/56 of LS 42.1 million, which
year followjed a cotton crop with yieldssli'htly below the average and
export prices slightly above the current level.

5. In the coi-ming years total revenue can be expected to rise because

of (a) the influence of additional cotton sales from the Hanagil exten-
sion and from new pumping schemes; (b) the increasing exports of other
agricultural products and (c) the introduction of new taxes now under
consideration.

6. As to cotton it has - in accordance with the assumptions in the

main report - been assumed that each year an additional area of 20,000
feddans will be put under cotton cultivation on private pump schemes,
yielding h kantars per feddan, and that each of the four phases of the
M'anagil extension - coming under production in,respectively, say 1958/59,
1960/61, 1961/62 and 1963/64 - will add 65,000 feddans of cotton under
gravity irrigation, yielding 4.1 kantars per feddan. Besides, in the
following calculations the assumption had been made that there will be a
shift to American type cotton in the Yanagil extension in sufficient
quantity to allow the price for Sakel type cotton to remain on the cur-
rent level of 40 / per pound (LS 13.9 per kantar).

7. Total government income out of Sakel type cotton consists of

four items:

(a) The cotton export duty which ia likely to amlount on the

average to IS 2 per kantar. This means a revenue of IS 8-ner fedriAn-
on pump schemes and LS 8.2 in the I4anagil extension, or LS 0.16 million
per 20,000 feddans under pump irrigation and LS 0.53 million per 65,000
feddans under gravity irrigation. The substitution of Sakel type cotton
by American type cotton will not substantially influence these figures
since yields of American type are expected to be appreciably higher than
those of Sakel tvnejwhereas the government can always maninp1late the
export duty, fThich is now LS 1 per kantar for American type cotton, in
such a wav as to prevent anv substantial decline in returns.

(b) Revenue from government narti cination in the Manapil scheme, In

the fiscal yearjX following the crop year 195h/55 when yields in the
GTezira were almnost normal (hjd6 kantars per feddann) nd expnor+ prices were
relatively low (LS 14.87 per kantar in 1955) total government revenue
out of its pnr+icipation in the Gehirn Board am^unted to LB 6.8 millin.-
Total feddanage under cotton in the Gezira in 195h/55 was 245,o00 feddans
so +hat income per feddan amounted to LS 28. Adjusting this fianire for a
price level of 40 per pound and a yield of 4.1 kantars per feddan, the
Managil extension is therefore expected to yield LS 23 per feddan or
LS 1,49 million per 65,000 feddans in the form of revenme from government
p_4art ie | 4at_ons A g_A-len A_zY ^_n~ +=rn
^A _+-Aa+ ^n .+r.^.-^; o -r+-
likely to reduce these figures since the higher yields of American type
(uUUu-.2'
co-,o I Vd-J.LLL
pro4^bljY
jJKUU0..-Lk
__as-il-_ 1 AI;JOi_20LAJ J'
o "L4JX
X,- -LUW
+7nae lo 4 Y.I~~
"4 0-
ce,T>isrr
applies also to the follcing point (c).

1/__On the whole O0% of government revenues from the cotton crop in a
cerEain year appear as income in ui,e next fScaL year.
 (c) Indirect revenue. Exports of Sakel type cotton and its products
on the average amount to some 65% of total exports. In a simple economy
like that -6e the Sudan,> where money income is largely directly or indirect-
ly derived f'rom ex-ports, it can thus be assuned that Sakel type cotton
exports are responsible for sar 60% of govornment revenme from impqrt,
consumption and excise duties and from the sugar monopoly. In the crop
year 195/555 again,a total of 360,000 feddans1 / was under Sakel type
cotton, wherEAs in the next year total government income from the just
mentioned sources w,cas approximately IS 15 million. 60% of this amount is
about IS 9 million which gives a figure of IS 25 per feddan. This figure
has again to be reduced to make allowance for lo-wer prices and yields
expected in the new areas under cotton.to approximately LS 20 per feddan
or LS 0.40 million per 20,000 feddans and IS 1.3 million per 65,000 fed-
dans.

(d) Business profit tax. The revenue from cotton under this heading
can be expected to amount to some LS 1.6 million for the new areas coming
under cultivation. i.e. about IS hlper feddan-or LS 0.08 million ner
20,000 feddans and LS 0.26 million per 65,000 feddans.

8. The annual increase in government revenue for each consecutive

year from cotton can this be mnmmariqP8 in the fnlIowin'n tAhle:

Cotton+.+.nn !xportnnr+. :tornr- Tndirect: R,ii n in Tnt-l in-

Year : feddanage: duty :ment : through : profit crease as
:par+tici:im,port
: : : r+x : compared to
: : :pation duties : : preceeding

1otU7/c58
_- ",
'.:r
6n,oa/
~ ** . ,.-
=
yc-4
- - _
1958/59 45,o000 0.16 - 0.40 0.08 0.64
1960/61 650,000 0.16 - o.ho 0.08 0.64
s96lJ6A' 735,r0 0.69 l.9 1.70 0.3I l 22
1962/63 755,000 0.69 1.49 1.70 0.34 4.22
1963/6) 840,ooo
nnn no "4A oQ 0.6l
1964/65 860,000 0.69 1.49 1.70 0.34 4.22
°65/. 6
iOA~~~/~~
880v000
~~ ~~AA A~~ -L
0.16 -
A_
0J.'0J
I.n' A ni J
U.'j 06.14
41.

-i 255,000 Gezira; 175,000 pump schemes (155,000 in 1956/57);

f kantars e
yeld.per feddan

9L/ 7 A - XI_IN.1 _. .*
1- _nJ1*
:.
A.ea tR:: U
unua LUU3
z-i
n
t;U { D | Vd D | 11 ca_UdbLC ueU r o Ule
4. t-
D
UCICD I U1L a 4*.)
kantars per feddan y,,ield.
 -45-

9.~~rThe overall i4ncreasSo is

4S thus0
4.1-,. TQ
TQL IC)
-y11.} IJ_- mLUl-l.
14 oe anI.*-year
-_

period of which lianagil accounts for IS 14.32 million and the pump
for
-ce,e TO ,.In llon

1L0. TUrLninj, nijw uu lthe expetedqUUU!U ±L11 in vtr-1itJ.IiiIL1

±1LU1Ue UUU of
other products, it has been calculated in the main report that exports
of these produucts are likely to increase to about ID 30 million by 196o5
as compared to an annual export of some LS 15.5 million in the 3-year
period i954-56. These exports can be estimated to account for some
one-third of total government income out of import, consumption and excise
duties and from the sugar monopoly, or for about LS 5 million of govern-
ment revenue during the last few years. To this will be added approximately
another 1S 5 million by 1965, or per year on the average about IS 0.55
million. The growth of the country's economy outside the cotton sector
Will of course also give rise to some increase in income from business
profit tax, export duties on products such as gum arabic, etc., but
amounts will be limited and may be offset by possible decreases in revenue
from other sources (for example, lower interest on foreign securities).

11. The introduction of new taxes finally may easily add another
IS 3 million to total government income. Several measures are already
being contemplated, to be applied preferably in combination with a new
development program that will be prepared as soon as sufficient informa-
tion is available about financial resources from abroad. A rise of the
price of sugar by IS 0.01 per pound (¢ 0.03) would already mean an
increase of revenue by some IS 2 million. Moreover, the gradual intro-
duction of an income tax and a certain increase in taxes on cattle is
being considered; fees and charges, which have not been revised for years,
may also be stepped up; the possible introduction at a later stage of
business profit tax on mechanical crop cultivation may also bring addi-
tional revenues as would a revision of the present system according to
which goods imported from Egypt are duty-free.

C. Conclusion

12. The overall calculation of future budget surpluses based on the

various assumptions mentioned in this Appendix thus becomes as follows:

increase a
Lncncrse ncrease
a Fse .- e ±iic reaUe

in reve- in non- in reve- Total: in nor- in irri- Total

Year nue from cotton nue from reve-: mal re- gation recur- Surplus
cotton revenue new tax- nue : current expend. rent
ation : expend. expend.
1957/58 _- 41.5: - - 38.5 3.00
1958/59 0.64 0.55 2.0 44.69: 2 0.3 40.8 3.89
1959/60 4.22 0.55 - 49.46: 2 - 42.8 6.66
1960/61 0.64 0.55 1.0 51.65: 2 0.3 45.1 6.55
1961/62 4.22 0.55 - 56.42: 2 0.3 47.4 9.02
1962/63 4.22 0.55 - 61.19: 2 - 49.4 11.79
1963/64 0.64 0.55 - 62.38: 2 0.3 51.7 10.68
1964/65 4.22 0.55 - 67.15: 2 - 53.7 13.45
1965/66 0.64 0.55 - 68.34: 2 - 55.7 12.64
Total surplus 77.68
 -46-

13. Actual year to year surpluses can of course differ greatly from
these theoretical figures. The total of LS 77.7 million is not a firm
figure either but only an indication of the order of magnitude of future
budget surpluses under certain, on the whole rather conservative assump-
tions.