The Role of the Sudanese Investment Climate in Attracting FDI in the Non-Oil Sector

By

ACKNOWLEDGEMENT

I would like to thank my supervisors, friends and family, without their support this research study would not have been possible.

DECLARATION

I adjudge that the entire content of this dissertation is entirely my own work; the content used in this dissertation has not been submitted before in any educational institution and represents my own opinion.

Signed __________________ Date _________________

ABSTRACT

The purpose of this research study was to investigate whether or not the Sudanese business climate is appropriate to attract foreign companies, particularly in the non-oil sectors. The research methods used in this study are based on mixed methodology. Questionnaire survey was conducted through which primary data from the representatives of the foreign and local companies. the qualitative data were collected by using secondary sources. Findings depicted that although firms were positive about the investment climate, macroeconomic instability, skills, labor regulations, and crime were earmarked as problem areas. Sudanese were seen, as not selling their country there is tendency to talk down. The perception of the political situation is really affecting business. The natural resource sector is not the only sector where this is a problem, as evidenced by two further comments from managers in other sectors. Domestic labor laws were the main concern for another German subsidiary. The labor law needs more flexibility. The law is there to protect both business and workers, but it is dampening FDI. Although the government talks about a partnership with business, labor and government, it was not apparent in practice. The Unions are stuck in a mindset of capitalist slave- driving managers. The correlation results depicts that FDI in Sudan has a direct relationship with the independent variables. If the Sudanese business climate ameliorates then the FDI in Sudan will also increase.

Thus, after analysis and discussion of the findings it can be proved that there is a positive role of the Sudanese investment climate in attracting FDI in the non-oil sector.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

1.1 Background of the study1

1.2 Research Aims & Objectives2

1.3 Rationale of the Study2

1.4 Organization of the Dissertation3

1.5 Time Frame3

CHAPTER 2: LITERATURE REVIEW5

2.1Introduction5

2.2 Foreign Direct Investment5

2.3 Theoretical Explanations of Foreign Direct Investment12

2.4 Empirical Literature16

2.5 Foreign Resources for Economic Development17

2.6 Sudan business climate and FDI19

2.6.1 Economic Factors21

2.6.2 Political considerations22

2.6.3 Regulatory Issue23

2.7Summary24

CHAPTER 3: METHODOLOGY25

3.1 Research Methodology25

3.2 Research variables26

3.3 Instrument26

3.4 Participants26

3.5 Foreign companies operating in Sudan27

3.6 Data Collection27

3.7 Research validity and reliability28

CHAPTER 4: ANALYSIS AND DISCUSSION30

4.1 Statistical analysis30

4.1.1 Gender30

4.1.2 Questionnaire analysis30

4.1.3 Correlation33

4.2 Discussion36

4.2.1 Statistical findings36

4.2.2 Secondary research findings37

4.2.2.1 Foreign and Local Companies Perception and Hurdles37

4.2.2.2 Sudan investment climate38

4.2.2.3 Sudanese macroeconomic background39

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS42

5.1 Recommendations44

REFERENCES46

APPENDIX49

Questionnaire49

List of tables51

Spread sheet59

CHAPTER 1: INTRODUCTION

1.1 Background of the study

In this world of globalization, the economic environment has been changing. Many countries are facing FDI expansion, liberalization of the trade, advancement of eth technology. These changes are creating opportunities as well as many risks in Sudan for accomplishing Sudan's development aims and objectives. In the international context, Sudan is facing difficult external economic conditions as this country is facing ...