Sudan to increase sugar production, cut imports, begin exports by 2014

Sudan plans to inaugurate a sugar plant in April, to help reduce the country's import bill and with the aim to achieve self-sufficiency and surplus for export by 2014.

The White Nile Sugar Company will start with an initial annual white sugar output of 150,000 tons, which is projected to reach the plant's full capacity of 450,000 tons in three years, according to a report by Reuters news agency.

Sudan currently imports at least 400,000 tons of sugar annually, despite being one of Africa's biggest producers.

The new plant is said to be a joint venture between foreign and Sudanese investors. Sudan’s Kenana Sugar Co, owned by Saudi Arabia, Kuwait and Sudan, is the biggest shareholder. Other shareholders are Sudanese firms and two Egyptian investors.

The new sugar plant will also produce power, animal feed and ethanol.

Reuters reports the country's industry minister as saying Sudan's combined sugar output is expected to reach 1.5 million tons by 2014. Investments from China and India are expected to boost that figure over the 2 million ton mark in 2016.


African Agriculture

Anger simmers in Sudan's farming heartland over government neglect

by Deepa Babington

Farmer Abdelbagi Abdallah says his tiny plot of land in Sudan's agricultural heartland bore him a bumper sorghum crop year after year, until pests and patchy irrigation ravaged his harvest. Barely able to make ends meet on the three sacks of the staple cereal his plot produced this year -- compared to more than 40 sacks in good times -- Abdallah says he was forced to pull his two sons and a daughter out of university.

Bitter and frustrated, he accuses the government of neglecting Sudan's massive state-run Gezira irrigated farming scheme that includes his four feddans (4.1 acres) of land.

"The administration provided no help," said the 55-year-old. "I'm very angry. Now I'm living with the bare minimum. Even my sons now have to stay at home."

Abdallah is on the frontline of a growing wave of anger in Sudan's farming heartland, where the rising cost of living is bringing long-simmering tensions over Khartoum's neglect of the agricultural sector to the fore. Gezira farmers held a protest in April, prompting the government to promise immediate help.

There is little to suggest that anti-government protests that toppled leaders in neighboring Egypt and Tunisia will take off in Sudan but, if they ever do, activists say the spark will come from long-suffering rural areas like those near Wad Medani.

Farmers in Gezira made available by activists complain of everything from a lack of promised state funds, to a spotty irrigation system and fears that their land will be seized by the government -- accusations that the Gezira project's managers strongly deny and say are politically motivated.

"The government wants farmers to own their land," Gezira chief Osman Samsaa said, dismissing the allegations as false and spurred by "anti-government people." The government has spent money to rehabilitate the Gezira program and given farmers the freedom to grow crops of their choice, he said.

The Gezira project, which includes over 2 million feddans of land by the Blue and White Nile rivers and employs 130,000 farmers, traces its origins to British colonial times. It initially developed land for cotton through a system of canals.

Khartoum last year said it would offer parts of the scheme to private firms to boost efficiency as it tries to prioritize agriculture after its oil-producing south secedes this year.

The general-secretary of the Gezira project's board, Mohammed Abdelmajid Kuku, acknowledges the project has struggled since the 1990s due to financing problems, but denies the state wants to seize any land -- it is doing the opposite, he says. He pinned recent tensions on the amount of compensation for more than 800,000 feddans that will be returned to landowners.

Without doubt, Khartoum has its supporters in the area.

"The government is not neglecting the scheme but is looking at improving it," said Mohammed Ahmed Ibrahim, a member of the local farmers' union who backs the government policies.

The head of a farmers' union in a separate farming project in central Sudan that has been privatized, Abdel Aziz Al-Bashir, also said he remained optimistic that farmers could strike a deal with the government over lingering land issues.

Still, in rural areas where mistrust of the government is high and the difference between fact and fiction is often far from clear, tensions have been bubbling up. Several hundred farmers this month blocked a main road to Khartoum in protest at what they said was a government plan to confiscate their land, before police teargassed the demonstrators, a witness said.

"We will not give up our land," said Mohammed Mustafa, who said he feared the government would seize the 40 feddans he has farmed for more than 30 years as part of its privatization drive. "We will fight. It is better to die than lose our land."

In January, a previously unknown group representing farmers in the central state of Sennar said it burned 5,000 feddans of sugarcane in protest at the government's "corrupt" policies. The state-owned Sudanese Sugar Company said only a small area was lost in the fire and the culprits were arrested.

Wad Medani, the capital of the Gezira state that is home to its namesake farming scheme, has also seen other protests this year by students seeking to emulate uprisings in the Arab world.

Overall, efforts to stage anti-government protests in Sudan have failed to gather mass support and fizzled quickly in the face of beatings, arrests and teargassing by security forces.

A divided society that has lived through wars in Darfur and the south, which secedes in July, appears also appears more keen on stability than the prospect of conflict if President Omar Hassan al-Bashir's 22-year grip on power is loosened.

But Sudan is struggling with double-digit food inflation, high youth unemployment and widespread corruption, and activists are hoping the protest movement will gather momentum in areas like Wad Medani that are well outside the capital Khartoum.

"Any uprising in Sudan will have to start from areas like Medani ... before it reaches Khartoum," said Magdi Okasha, an activist leading the Youth for Change Movement that has organized short-lived anti-government protests via Facebook.

"The security (apparatus) in Khartoum is huge. There are too many of them, and sometimes you can't even differentiate between the protesters and security in plains clothes."

A heavy deployment of security forces and preemptive arrests meant Facebook-inspired protests on March 21 failed in Khartoum. In Wad Medani, however, about 250 protesters managed to rally in the main market before police broke up the demonstration.

Activists facing apathy from the urban elite in Khartoum say public opinion is more in their favor in areas like Wad Medani, which has long been a strong base of support for the opposition Democratic Unionist Party and Umma party and where agricultural woes have fueled the feeling of disillusion.

Mohammed Ali Mustafa, a 26-year-old university student in Medani says he was drawn to the protests after his father, who managed a storage facility within the Gezira Scheme, and his mother, a typist, were laid off in November 2009.

"I'm worried I won't get a job when I graduate," said Mustafa, who rallied support for the March 21 protest by dropping off anti-government leaflets from his motorbike at night. "The 350 Sudanese pounds ($117) a month unemployment handout my family gets is not enough to survive."

Reuters

South African farmers shun Libya investment; target Sudan, Egypt

by Brian Latham

 South Africa’s biggest farmers union, Agri SA, said its members are seeking to expand into Egypt, Morocco and Sudan while putting plans to enter Libya on hold because of violence in that country.

Members of the Pretoria-based union are already producing grapes in Egypt’s Aswan region and are considering olive farming and processing ventures in Morocco and sugar and banana operations in Sudan, Theo de Jager, who heads the union’s Africa committee, said in an interview. An agreement to farm land in Congo Republic has already been brokered and sugar operations are being considered in Mozambique, he said.

The union, which has 70,000 members, is hoping to profit from growing demand in Africa and to compete more effectively on the international market by investing in countries where the climate and location may help them undercut rivals in South America.

“We hope to end the competitive advantage they have over us,” de Jager said from Tzaneen, a fruit-farming town in eastern South Africa. Expansion into Libya has been “put on the back burner” by farmers who had hoped to profit from a yet to be ratified bilateral trade agreement between the country and South Africa, he said.

Most farmers will have the operations in new countries run by managers rather than emigrating, he said.

“There are South Africans opening up in Egypt, with one of our biggest grape farmers and others farming in the Aswan region,” De Jager said. “The farmers in northern Sudan should be able to utilize a preferential sugar trade agreement between Arab nations.”

Investment plans in Congo Republic, where the agriculture ministry will allocate about 172,000 hectares (425,012 acres) of land to 17 South African farming syndicates, are focused on producing grain and red meat for the local market and fruit for export.

“The farmers will grow tropical fruit and hopefully give us an edge against farmers in South America where they traditionally beat us to the European markets by about a week,” he said.

The union hopes to soon conclude talks over 50-year land leases in Mozambique week as part of a plan to grow sugar for biofuel plants, tropical fruit and livestock, de Jager said.

The union has turned down opportunities in Canada and Europe, he said.

A rival union, Tau SA, has concluded an agreement to send farmers who want to leave South Africa to Georgia.

South African farmers are the continent’s biggest producers of corn, grapes, wine and sugar and the world’s second-biggest citrus fruit exporter after Spain.

Businessweek

Egypt eyes Sudan for land to grow wheat

Egypt has turned to its southern neighbor, Sudan, for use of agricultural land as the world's largest wheat importer looks to meet domestic food supply needs and quell a rapidly growing population increasingly irate about chronic price increases.

With a summer drought in Russia that propelled world grain prices higher still fresh in the government's mind, Egyptian officials in September revived a 30-year-old agreement with Sudan that encourages private companies to plant wheat in northern Sudan. The deal brings Egypt into a growing list of Arab nations that have turned to Africa as a new breadbasket.

"We are facing a shortage of agricultural commodities internationally," said Ayman Abou Hadid, chairman of the state-run Agricultural Research Center. Under the deal, the Egyptian government provides investors with incentives for irrigation and infrastructure, but production is left up to the private companies, he said.

"The government is not going to participate," said Abou Hadid.

The deal marks the latest attempt by the government to meet future needs in the Arab world's most populous nation. But the push has clear political overtones. An unusually hot summer in Egypt led to a sharp increase in vegetable prices — though those gains were linked in part to a decision by the government to export tomatoes, leaving the local market short.

Fears about increases in food prices had already taken root even before Russia decided to halt grain exports for the rest of the year after a summer drought killed off a third of its annual harvest. Over the course of the year, meat prices seesawed, more than doubling before retreating slightly. Similar gains were seen in more basic goods, as well, leading to a series of protests that came at a particularly critical time for the government of President Hosni Mubarak, who has ruled the country for the past 30 years. With parliamentary elections set to be held at the end of November and presidential elections slated for next year, Egyptians have increasingly complained about the government's failure to improve living standards, raise salaries or provide basic services.

In 2008, shortages in subsidized bread lead to fights that left eight dead. In 1977, an attempt to end such subsidies led to riots that required army intervention.

While the latest protests are unlikely to seriously threaten Mubarak's, or his ruling National Democratic Party's, hold on power, they highlight a widening schism between rich and poor in the key U.S. ally and increasingly vocal protests about the economic situation in the country. Critics argue that the country's economic growth has largely failed to trickle down to much of the population, with 40 percent of the people living on or near the World Bank poverty line of under $2 per day.

The deal also provides a potential boon for Egypt, which remains at odds with several other nations that share the Nile River, over water quotas. Abu Hadid said water used to irrigate wheat crops in Sudan would come from that nation's allotment, not Egypt's.

The new production would likely be just enough to meet Egypt's rate of population growth, said Abdolreza Abbassian, a senior economist at the United Nations' Food and Agriculture Organization.

It could also provide a sorely needed cash infusion for Sudan's struggling economy, which has been ravaged by the country's a 21-year civil war between Sudan's mostly Muslim north and predominantly animist and Christian south.

"Sudan has a huge potential," he said. "There are so many positive aspects as long as some code of conduct is respected."

Egypt is not alone in tapping Sudan's vast land base for crops. Saudi Arabia, the United Arab Emirates and Qatar have also turned to the country for food.

Some experts argue, however, that the deal will do little for Sudan, which has its own food worries, along with political problems.

Nader Noureddin, a soil and water expert at Cairo University's College of Agriculture, said wheat production in Sudan's northern desert would require tremendous amounts of water and would do little to supplement the country's own domestic need for the grain.

"They need it (wheat) much more than Egypt," he said. "This is their own land."

Additionally, any private Egyptian investment will not help Sudanese farmers because the companies that venture in will be looking at profit, not whether the war-ravaged nation can feed itself, said Noureddin.

The criticism is dismissed by officials, however, who argue that the new wheat production will be traded on the open market and foreign investment will help improve infrastructure.

"Any African country that can afford to grow more food, that is better for everyone," said Abou Hadid.


Associated Press

Egyptian investment firm signs land deal for Sudan rice farm

by Shaimaa Fayed

A unit of Egyptian private equity firm Citadel Capital signed a 30-year lease agreement for land south of Khartoum to build Sudan's first large-scale commercial rice farm, Citadel said in a statement.

Gulf and other Arab countries have been investing in a range of farming projects in Sudan, Africa's biggest country by area and long viewed as having huge agricultural potential.

The land leased by El-Nahda for Integrated Solutions, a portfolio company of Wafra, Citadel's platform company in the Sudanese agricultural industry, spans 60,000 feddans (25,210 hectares).

"The farm will produce rice primarily for domestic consumption in Sudan, a net importer of rice, allowing any excess to be exported to other nations in Africa and the Middle East," Citadel said in its statement.

Cairo-based Citadel, which controls $8.3 billion in investments spanning 14 countries, has made various ventures in the Sudanese market including buying a majority stake in a Sudanese biscuit and sweet maker last year.

"As the third portfolio company under Wafra, El-Nahda builds on our experience at Sudanese Egyptian Agricultural Crops Company (SEAC) and Sabina," Citadel Managing Director Hisham El-Khazindar said in the statement.

"Sabina is on track to have 3,000 feddans under cultivation by next June, while SEAC will be ready to seed 20,000 feddans by the onset of the rainy season in mid-2011," he said.

The statement said the lease area is flooded for up to eight months a year by water held back by the Jebel Al-Awliaa Dam.

Sudan has a varied climate, with heavy rainfall in some areas and water from the Nile which means it can grow a range of crops from wheat and animal feed to citruses and oilseeds.

Reuters

Chinese firm given land deal in Sudan

The Chinese company ZTE received an allocation of approximately 10,000 hectares of land from the Sudanese Ministry of Agriculture. The deal aims at boosting production of wheat and maize, state media reported.

ZTE is a technology company but it has invested agriculture in Sudan, Ethiopia and elsewhere in Africa.

Last June the company signed two memoranda of understanding with the Sudanese government, agreeing to establish a fodder factory, remove mesquite trees in Gezira state, cultivate oil seeds in White Nile state, and invest in agriculture in Khartoum state.

A visiting Chinese delegation that included senior agriculture experts was received by Minister of Agriculture Dr. Abdul Halim Ismail Al-Mutaafie on Monday, the official Sudan News Agency (SUNA) reported.

The Chinese visited "many relevant agricultural sites," according SUNA, as well as a technology center that they had established in Al-Fau area and the site of the Chinese company in Northern State.

"The Chinese company was given the agricultural lands in the framework of the joint cooperation between the two countries in the agricultural field toward moving from the stage of successful agricultural experiences to the stage of commercial production, especially in the field of wheat and maize cultivation," stated SUNA.

China is Sudan’s largest trading partner.

Sudan Tribune

Sudan seeks Middle East farmland investors

by Maram Mazen

Sudan wants to attract foreign investors to cultivate vast tracks of land that are currently unused in Africa’s largest country, State Minister for Finance Tarek Shalabi said.

“We have millions of acres of land, very flat and unspoiled and it hasn’t really been even explored yet,” said Shalabi, 41, in an interview on Dec. 15 in the capital, Khartoum. “Sudan is a very good place for agricultural investment.”

Arab countries such as Egypt, Kuwait and Saudi Arabia have started to invest in Sudanese farmland as their own agricultural industries fail to keep pace with their rising populations. Elsewhere in Africa, Indian and other foreign companies are buying up land in a process critics have described as a “land- grab,” exporting food from countries that are not self sufficient.

Foreign investment may help push Sudan’s economic growth to 6 percent in 2010, from about 5 percent last year, Shalabi said. The government expects its budget deficit to be 4 percent of gross domestic product in 2010 “which is a very safe range,” he added.

Citadel Capital, an Egyptian private equity firm, secured 250,000 acres of land on the Nile in Sudan in February on a 99- year lease basis at 50 cents per acre a year. The company plans to grow crops such as maize, sorghum and sugar, Managing Director and co-founder Hisham El-Khazindar said in May.


“We are now looking very seriously into Sudan,” said Zouhair Eloudghiri, chief executive officer of Savola Foods Co., a unit of Saudi Arabia’s second-largest publicly traded food producer, Savola Al-Azizia United Co. “Sudan has a huge agricultural potential,” he said.

Saudi Arabia has decided to end all wheat production by 2016 in order to save water, the U.S. Department of Agriculture said last year.

A 2005 peace agreement between the north and south of Sudan ended a two-decade civil war and helped bring billions of dollars in foreign investment from China, India and the Gulf region.

Sudan’s government depends on revenue from oil coming mostly from the semi-autonomous region of South Sudan. Under the 2005 accord, the south will vote in 2011 in a referendum on whether to secede and form an independent state.

The government sees more room for oil investments and welcomes U.S. companies should the administration of President Barack Obama lift economic sanctions banning investors from dealing with Sudan, Shalabi said. “It’s up to the U.S. government to allow them or not,” he said. “But as for ourselves, we are very open for business.”

The government plans to finance most of its fiscal deficit by issuing Islamic bonds, known as sukuk, Shalabi said without giving details. Inflation may average 9 percent in 2010 compared with about 11 percent this year, he said.
The government may also sell several state-owned companies either through auctions or through “direct negotiations with strategic partners,” Shalabi said.

Bloomberg

Sudanese agricultural schemes to be partially privatized

by Opheera McDoom

Sudan's Kenana sugar company will manage more than 300,000 acres of farm land in a long-term project that aims to make Africa's largest country the bread basket of the Middle East within 10 years, officials said on October 18.

Kenana, in a profit-sharing scheme with farmers, will improve technology, mechanise farming and irrigation and introduce new products and crops to quadruple the output of the project in one year, government ministers and company officials said.

"This is a public-private partnership to introduce a new management to government schemes," Agriculture Minister Abdel Haleem Mutafi said. Around 350,000 acres of farmland in central and eastern Sudan would come under Kenana's care, and talks on the management of Sudan's largest Gezira agricultural scheme would begin next week, he added. Initial investment would be $100 million in the first year, but running costs of the project would be between $100-$250 million annually, Mutafi said.

Kenana, one of the world's largest integrated sugar companies, said it would take 40 percent of profits, with 50 percent going to the farmers and 10 percent towards social schemes in the region such as building hospitals and schools.

"This is a 20 year renewable agreement," Kenana's company secretary Fareed Omer Medani said. "We are hoping to increase production to four times what it is now by next year." Crops would include sunflowers, sorghum, maize, cotton, ground nuts and sesame, he added.

Kenana is part-owned by the governments of Sudan and Saudi Arabia and the Kuwait Investment Authority, among others.

Mutafi said Sudan could become the bread basket of the Middle East within 10 years, "with a lot of hard work and if politics goes well."

Decades of civil war and sanctions have drained the country's resources and massive agricultural projects have decayed.

Mutafi said the new scheme could cut out Sudan's imports of edible oils worth $110 million a year and achieve exports worth some $100 million within 15 months. He said Sudan would also begin to export animal feed. "The utilisation of Sudan's natural resources of sun, soil and water is not more than 20-25 percent at the moment," he said. "This is why we have room for three to four-fold gains," he added. "We hope to achieve 100 percent (utilisation) in 10 years."

More than two thirds of Sudan's population work in the agricultural sector, which was the mainstay of the economy before oil production began in the 1990s.

Sudan has the Blue and White Nile rivers, heavy seasonal rains and land galore. The arid Middle East and Gulf have long eyed the agricultural potential of the war-torn nation.

Reuters

Jordanian agri-investment in Sudan fails to take off

by Hani Hazaimeh

The Sudanese government will take back a plot of land allocated for a Jordanian agricultural megaproject if the project does not begin implementation within two weeks, Agriculture Minister Saeed Masri said on October 7.

The project was supposed to be implemented by a private company with government support, but Masri announced that the private sector partner had withdrawn from the plan, noting that their decision was made unilaterally without prior notification.

Earlier last year, the government announced a plan to enter into an agreement with a coalition comprising four Jordanian firms that had decided to undertake the Sudan project and benefit from customs exemptions and other incentives provided by the Sudanese government. But the plan did not materialise after the private sector withdrew, citing the government’s failure to fulfil its JD10 million share in the JD60 million project, according to a government official.

Issam Hijazi, CEO of the leading livestock and food importer/manufacturer Hijazi and Ghosheh Group and one of the company founders, confirmed the withdrawal on October 6.

The company founders had a firsthand look at the situation of the project in Sudan during a self-initiated, four-day visit that started on August 5, 2008 during which they met with Sudanese officials over the investments and facilities made available by Khartoum.

“The project is quite feasible, but at the time we showed interest in the project, the prices of agricultural food items were at historic highs. Now the prices are almost the same as they were two years ago,” Ghosheh said, adding: “Nevertheless, the government was supposed to be a co-investor in the project but now they decided to abandon the partnership.”

But Masri stressed that the private sector partner decided to leave the project even before the finance minister’s statement that there were no funds allocated for the project in the state budget, adding that he was instructed by Prime Minister Nader Dahabi to go ahead with the investment.

“Now that the private sector has withdrawn from the project, we are in negotiations with the Army-run company Al Bashaer, which is currently farming a total of 39,000 dunums of land adjacent to the project’s allocated lands on the banks of the Nile River,” he said, stressing that the project’s fate is time-sensitive and that it must be implemented before it is too late.

In 1998, the government signed an agricultural protocol with the Sudanese government which entitled Jordan to utilise vast fertile lands on the banks of the Nile to rear livestock and grow crops.

In early 2008, the governor of the Nile River State distributed more than half the land included in the agreement to local farmers in his state as the plan did not materialise a decade after the deal was signed, leaving Jordan with around 87,000 dunums to utilise.

However, due to the government’s reluctance to go ahead with the project, the Sudanese government set 2009 as the deadline for the implementation of the agreement, after which the deal would be declared null and void.

Jordan Times

Jordan to move forward on agricultural investments in Sudan

Jordan will dispatch a delegation to Sudan on April 16 headed by its agriculture minister Saeed Al-Masri to discuss an agreement on developing food farms in the East African country, according to media reports.

Both countries have signed an agreement in 1998 by which Sudan granted Jordan vast pieces of agricultural land for investment in food products.

The accord provides for mobility of capital movements and money transfers as well as the freedom to export the end products or sell them in local markets.

Under the agreement Jordan has the ability to employ from within its citizens or Sudanese nationals to work on the farms. Furthermore there are no restrictions on imports of machinery or items necessary for the agricultural investments.

Sudan Tribune

But despite the lucrative terms offered there has been much hesitance from the Jordanian businessmen to invest in Sudan throughout the 10 years drawing criticisms from observers in both countries.

The Jordanian agricultural minister said that his ministry has encouraged business men to visit Sudan and observe the investment climate in agricultural lands.

A number of Arab countries including Saudi Arabia and United Arab Emirates (UAE) have moved to lock up lands in Sudan in the wake of a global food shortage that sent its prices up sharply and caused protests worldwide particularly in developing nations.

Sudan has offered Arab countries free use of the land, hoping to benefit from the cash surplus particularly among Arab Gulf states as well as technology deployed in these projects.

Furthermore Sudan hopes that agricultural investments will boost infrastructure projects in the area.

(GRAIN)

Sudan receives $13.5 million IFAD food security grant

A new project in The Sudan financed by IFAD will help 38,000 of the poorest and most vulnerable households overcome food insecurity and extreme poverty in six counties in Southern Sudan’s Central Equatoria, Eastern Equatoria and Jonglei states.

The US$13.5 million IFAD grant to support the Southern Sudan Livelihoods Development Project will target households headed by women and returnees. An additional grant of US$9 million will be provided by the Kingdom of the Netherlands, as well as a US$3.4 million contribution fromthe Government of Southern Sudan and the beneficiaries.

IFAD’s grant agreement was signed at the Fund’s headquarters here today by Lennart Båge, its President, and Kuol Mawien Athien, Minister of Finance and Economic Planning of the Government of Southern Sudan.

“The project will be IFAD’s first operation in Southern Sudan following the Comprehensive Peace Agreement signed in January 2005,” said Rasha Omar, IFAD’s Country Programme Manager for The Sudan. “It aims to improve agricultural productivity and marketing activities while building the institutional capacities of county offices to ensure a sustainable agricultural and economic development.”

The project will tackle rural poverty, which is linked to the prolonged conflict situation, population displacement, poor public services and low agricultural productivity, by supporting community-based development of productive on-farm and off-farm activities. This includes technical and financial support for agricultural micro-projects, rural infrastructure and marketing facilities.

The key implementing partners of the project are the “boma” (cluster of villages) development committees and the government county offices. The project will also rely on technical assistance provided by qualified national and international non-governmental organizations to ensure the development and sustainability of community farming, herding and fishing activities as well as development of the planning and monitoring capacity in the county offices. In addition, it will finance repairs and maintenance of rural roads that support improved food security and higher incomes from agricultural activities.

With this project, IFAD will have financed 16 projects in The Sudan for a total of commitment of US$ 225.37 million.

International Fund for Agricultural Development (IFAD)

Quest to create a new Sudan bread basket

By William Wallis, Javier Blas and Barney Jopson


There are few regions in Africa as remote and undeveloped as southern Sudan. Unity state, where Philippe Heilberg, a US businessman, says he has secured a huge tract of arable land, is inaccessible even by south Sudan’s standards.


Apart from AK-47 assault rifles, it was deprived of most of the trappings of the modern world. Even a road network that has been under construction since 2005, when a peace agreement ended the long civil war between the predominately Muslim north and the Christian and animist south of the country, has yet to reach it.



But Unity state does border the White Nile and its flat, arable land could, with billions of dollars of investment in irrigation and roads, be transformed into a world-class bread basket.
As commodity prices spiked last year and food riots erupted across the developing world, Gulf countries poured hundreds of millions of dollars into securing land in the fertile Nile valley farther north to grow food crops for exporting home. Saudi Arabian investors, for example, acquired 25,000 hectares of land north of Khartoum for $95m (€70m, £63m) last year.


Mr Heilberg is convinced that demand for land is now gravitating south. Other experts say investors are scouting out opportunities in the south, albeit on a far less ambitious scale. That is despite imprecise land laws and the risk of a new civil war should the oil-rich south vote for independence in a planned referendum in 2011.


Mr Heilberg has experience in commodities markets on Wall Street and in Asia. To help him as he looks for opportunities in Africa, he has pulled together a board at Jarch Capital, his US-based investment vehicle, which includes Middle East, Africa and security experts with years of experience at the Pentagon, CIA, White House and state department. He is of a resurgent class of western businessman drawn to the potential of Africa’s remaining frontiers, who have been energised by Asia’s, and in particular China’s, appetite for the continent’s natural resources.


Sudan experts familiar with his business strategy liken him to buccaneering capitalists such as Sweden’s late Adolph Lundin, who acquired mining and oil concessions in Congo and Sudan when civil wars were still raging and turned huge profits when they sold them on.


In both countries, however, legal wrangling has often prevented mineral concessions from becoming productive. Mr Heilberg has experience of this problem after being embroiled in a dispute with the south Sudan government over oil exploration rights also claimed by other companies.


Some experts on Sudan believe his 400,000 hectares will face a similar fate and that his ultimate strategy is to trade whatever claim he can sustain over the land to investors with a greater capacity to develop it. He says the land has great potential for biofuels and food crops and is looking for joint venture partners with the expertise to help him develop it. He insists the law is less important to his deal than the clout he has bought into by associating the venture with a former warlord, Paulino Matip, whose family says it owns some of the land in Mayom county, in Unity state.


“I never understood why the oil industry could spend $1bn drilling dry holes but they do not want to take a single dollar in legal risks,” Mr Heilberg said.


Mr Matip fought with the Sudan People’s Liberation Movement against the northern army before gaining notoriety during one of the bloodiest episodes in Sudan’s civil war, when he switched sides to form his own militia, with backing from parts of his Nuer tribe and the Khartoum regime. “I am sure Paulino has killed many, but I am sure he did it in protection of his people,” Mr Heilberg says in his defence.


Following the 2005 peace agreement, his forces were appeased when he was brought in as deputy commander in the army of the autonomous south.


Mr Matip’s son Gabriel, who controls the company in which Jarch has bought a majority stake, told the Financial Times that he had negotiated with tribal leaders to secure access to more land. He said the company also had written agreement for the agricultural development of the land, and other land it may secure in the south of the country, from the ministry of agriculture and forestry in south Sudan.



Financial Times

Sudan seeking a billion dollars of Arab, Asian agricultural investment

Sudan is seeking to attract at least $1bn of capital for its agricultural sector from Arab and Asian investment groups, which are turning to Africa in search of new food supplies as their governments try to manage the impact of commodity price inflation.

The investment ministry is marketing a portfolio of 17 large-scale projects that would cover an area of 880,000 hectares, one of its officials said. Abdalla Elhag Mohamed, director of external relations at the ministry, said: "Everyone coming to Sudan is asking about agriculture, to the extent that we are struggling to cope."

The country sees agricultural development as a vital means of reducing its dependence on oil revenues. The greatest interest has come from governments in the Middle East, where overseas agricultural projects are being seen as tools for ensuring food security following big increases in the prices of rice and wheat, staple foods for the region.

Abu Dhabi is preparing to launch a project to develop more than 28,000 hectares of Sudanese land and Egypt has said it is considering a venture in the giant Gezira scheme, one of Sudan's few irrigation projects. Saudi Arabia, which plans to set up large-scale agricultural projects in a number of countries, has also held talks with Khartoum.

Sudan has been described as a possible bread basket for the Middle East and has great productive potential in land close to the Blue and White Nile rivers and the River Nile proper. But the farming sector is underdeveloped and in need of capital, irrigation systems, roads, machinery and technology. Sudan has been blighted by decades of conflict and, in spite of oil wealth that began to flow nine years ago, its ability to invest in agriculture has been limited by vast spending on the military in Darfur and other parts of the country where it faces armed opposition.

"In this difficult situation, when we are fighting, it is difficult to say, 'Let them die and we will invest in agriculture'," said Mr Mohamed. The government wants to secure investments totalling $1.04bn for 17 lead projects, which are all in northern Sudan and include wheat, maize, fruit and vegetable production. But besides those, Mr Moh-amed said, there were "hundreds of projects" and "millions of hectares" available.

Sudan's previous efforts to attract agricultural investment had little success partly because they were government-to-government initiatives that hit bureaucratic and diplomatic barriers. This time it has vowed to give the private sector a much bigger role.

Mr Mohamed said "very many" investors from China, India and Malaysia were examining opportunities in the country and he added that Khartoum was also trying to drum up interest in South Africa, Brazil and Argentina. He declined to name specific institutions.

Khartoum is insisting that investors agree to terms that will yield clear benefits for Sudan. "It's not only to take back to their country. Local people will not accept that," Mr Mohamed said. "It should be very clear in the agreements what proportion of food will remain in Sudan, what other social services they will provide, what new technology they will introduce, the employment they will create and the training for local people."

Foreign direct investment in agriculture rose to $279m in 2007, from $188m in 2006, but it was dwarfed by FDI of $3.1bn in the industrial sector and $1.6bn in the service sector, according to the investment ministry.
Much of the capital has flowed to the oil sector from China and Malaysia. But the regime is aware that its oil reserves are finite and it may lose a large portion if semi-autonomous southern Sudan votes for independence in a referendum scheduled for 2011.

Zawya

Sudan lives on handouts but exports food

Even as it receives a billion pounds of free food from international donors, Sudan is growing and selling vast quantities of its own crops to other countries, capitalizing on high global food prices at a time when millions of people in its war-stricken region of Darfur barely have enough to eat.

In the bone-dry desert, where desiccated donkey carcasses line the road, huge green fields suddenly materialize: beans, wheat, sorghum, melons, peanuts, pumpkins, eggplant. It is all grown here, part of an ambitious government plan for Sudanese self-sufficiency, creating giant mechanized farms that rise out of the sand like mirages.

But how much of this bonanza is getting back to the hungry Sudanese, like the 2.5 million people driven into camps in Darfur? And why is a country that exports so many of its own crops receiving more free food than anywhere else in the world, especially when the Sudanese government is blamed for creating the crisis in the first place?

African countries that rely on donated food usually cannot produce enough on their own. Somalia, Ethiopia, Niger and Zimbabwe are all recent examples of how war, natural disasters or gross mismanagement can cut deep into food production, pushing millions of people to the brink of starvation.

But here in Sudan, there seem to be plenty of calories to go around. The country is already growing wheat for Saudi Arabia, sorghum for camels in the United Arab Emirates and vine-ripened tomatoes for the Jordanian army. Now the government is plowing $5 billion into new agribusiness projects, many of them to produce food for export.

Take sorghum, a staple of the Sudanese diet, typically eaten in flat, spongy bread. Last year, the U.S. government, as part of its response to the emergency in Darfur, shipped in 283,000 tons of sorghum, at high cost, from as far away as Houston. Oddly enough, that is about the same amount that Sudan exported, according to UN officials. This year, Sudanese companies, including many that are linked to the government in Khartoum, are on track to ship out twice that amount, even as the United Nations is being forced to cut rations to Darfur.

Eric Reeves, a professor at Smith College in the United States and an outspoken activist who has written frequently on the Darfur crisis, called this anomaly "one of the least reported and most scandalous features of the Khartoum regime's domestic policies." It was emblematic, he said, of the Sudanese government's strategy to manipulate "national wealth and power to further enrich itself and its cronies, while the marginalized regions of the country suffer from terrible poverty."
Aid groups gave up long ago on the Sudanese government helping the people of Darfur. After all, the nation's president, Omar Hassan al-Bashir, has been accused of masterminding genocide there. UN officials have said that if they do not bring food into the region, the government surely will not.

That leaves the United Nations and Western aid groups feeding more than 3 million residents of Darfur. But the lifeline is fraying. Security is deteriorating. Aid trucks are getting hijacked nearly every day and deliveries are being made less and less frequently. The result: less food and soaring malnutrition rates, particularly among children.

On top of this is the broader problem of trying to find affordable grains on the world market when prices are higher than they have been in decades. UN officials in Sudan say that the fact that they have to import some of the same commodities that Sudan not only produces but exports is a source of constant frustration.

"Sudan could be self-sufficient," said Kenro Oshidari, the director of the UN World Food Program in Sudan. "It does have the potential to be the breadbasket of Africa."

Sudanese officials say that is precisely their goal, and they deny that Sudanese agribusiness is being built at the expense of their own people. They reject accusations that they are neglecting far-flung areas like Darfur, much less waging a war of hunger and deprivation against them.
Instead, Sudanese officials say they are simply trying to build up their economy. They say they know what it is like to be vilified, having been squeezed by U.S. sanctions for more than a decade. And it could get worse, with Bashir facing genocide charges at the International Criminal Court in connection with the massacres in Darfur.

"Sanctions are never far from our mind," said Al-Amin Dafa Allah, chairman of the National Assembly's agricultural committee. "We're trying to minimize our reliance on the outside."

In fact, part of the reason relief agencies bring their own food into Sudan stems from the U.S. policy of giving crops, not money, as foreign aid. Many European countries, by contrast, just give the World Food Program cash, which can be used to buy food locally. Last year, the program bought 117,000 tons of Sudanese sorghum. UN officials said they would like to buy more, but Sudanese suppliers could make more money with exports. "We don't get discounts," said Emilia Casella, a spokeswoman for the World Food Program.

Sudanese officials say they want to sell more crops to the United Nations, but lost in this discussion about buying and selling food is whether the Sudanese government should be donating food to its own needy people.

For now, Sudanese officials seem more interested in doing business with their new partners in the Middle East. Sudan is the largest country in Africa, nearly 2.5 million square kilometers, or a million square miles. It has 84 million hectares, about 210 million acres, of arable land, with less than a quarter being cultivated. The Sudanese government is striking deals left and right with Arab countries just across the Red Sea: the Arab countries bring the money, the soil scientists and the $200,000 tractors. Sudan supplies the land.

"Our country is small and dry and mountainous," said Man Shuqwara, the Jordanian director of a Jordanian-run farm in northern Sudan that grows wheat, beans, potatoes, onions, tomatoes, oranges and bananas. "By logic we would come to Sudan."

That same logic is attracting big money from Saudi Arabia. About an hour's drive north of the Jordanian farm, near the town of Ed Damer, is a huge new $200 million project to grow wheat in what now looks like a 15-kilometer-wide sandbox. Some of the wheat will stay in Sudan; some will be shipped to Saudi Arabia. A fleet of new John Deere tractors is already lined up for harvest time. A worker on the farm whispered that the tractors had been sneaked into Sudan through Saudi Arabia because of the American trade sanctions.

Sudan's overall economic strategy is to diversify from oil, which it began exporting in 1999, and to focus more closely on the traditional engine of the country's economy - agriculture. More than 80 percent of the work force is engaged in raising animals or farming of one sort or another.
"Our sesame oil is the best in the world," said Al-Amin, the agriculture committee chairman. "And it's organic!"

The dark side to all this development is displacement. The conflict in Darfur is largely about grazing rights and watering holes - and the government's brutal counterinsurgency policies in response to an armed rebellion.

And development in Sudan often means uprooting other rural subsistence farmers for large-scale commercial projects, said Alex de Waal, a Sudan scholar at the Social Science Research Council in New York. "Smallholder food production goes down, commercial food production goes up, and food relief serves as a subsidy to this transformation, keeping the displaced alive," he said.

The Sudanese government is blamed for running many of the displaced people in Darfur off their farms, making them reliant on handouts. Still, the government has been slow to feed them.
The last time the government gave the World Food Program any food for Darfur was in 2006. It was 22,000 tons of Sudanese-grown sorghum, a fraction of what the people needed, UN officials said, and some of the grain was rancid and infested with weevils.

Bor Globe

Sudan unveils ambitious sugar project

Sudan aims to produce an annual 10 million tonnes of sugar by 2015, up from some 850,000 tonnes at present. The vast African nation could eventually end up producing twice that amount,said Hassan Hashim Erwa, marketing manager for the Kenana Sugar Company representing Sudan at a three-day International Sugar Organization (ISO) meeting in Mauritius. Kenana is owned mainly by Arab government investors.

The majority of 13 projects included in a 10-year strategy to produce the 10 milllon tonnes are south of Khartoum between the White and Blue Niles. "By 2015, we will be ready to produce 10 million tonnes," Erwa said. "The capacity of Sudan could go to 20 million." Part of Sudanese agricultural reforms, the projects are expected to create 700,000 jobs and to improve health and education for three million people, Erwa said. The largest of the projects, the Eljazeera project, was aiming to produce 2.9 million tonnes of sugar and 205 million litres of ethanol per year, he said. Sudan, which produces 330,000 barrels per day of crude oil, is expected to legalise the blending of ethanol with petrol in July, he said.

Sudan's extra sugar production will most likely be sold on Arab, African, and internal markets, Erwa said. Linked to the presence of oil, Sudan's economy is expected to grow up to 13 per cent this year. "The Sudanese population is growing, the patterns and consumption habits of people are changing," he said.

Sudanese production could also help plug a sugar deficit in the Middle East and North Africa, equal to almost 9 million tonnes for 2006/07, according to ISO figures. This month, the ISO forecast a world sugar production surplus of 9.1 million tonnes for 2006/07. World production would equal 162.6 million tonnes, it said.


"All of these factors will contribute to a very dynamic market," Erwa said.

Daily Nation

Pump project turns Sudanese desert into farmland

South African manufacturer of engineering pumping solutions, Denorco, is supplying water pumps to an irrigation project in Sudan's River Nile State. The project will see the transformation of 50 000 ha of arid desert into arable farmland. The company has been involved in the project since its inception in 2003 and has supplied 84 large pumps.

With the discovery of oil in Sudan, the government identified areas where the funds raised could be best used. One area was agriculture. However, water, in this traditionally arid land, is a scarce resource, other than on the banks of the river Nile.

“This is the largest ever flood irrigation project on the African continent. Denorco became involved in the project after responding to a tender put out by the Sudanese Ministry of Agriculture," said Denorco managing director Attie Jonker. “In colonial times, at the turn of the century, water schemes were developed on the Nile by the British, but these are no longer operating efficiently. We are now rehabilitating these schemes as well as developing new ones,” says Jonker. “Each of the pumpstations, based on an average of four pumps, pumps water from the river into an extensive network of canals. Some of these canals go as far as 45 km into the desert. “The government, through this project, has successfully converted arid land into lucrative agricultural sites.”

Denorco has two technicians based in Sudan, who ensure that the installation of the pumps is smooth and satisfactory. In addition, over 20 engineers have been to South Africa to receive technical training. Local farmers take ownership of the project and are encouraged by the government to grow fresh produce, such as wheat, manges, onions, beans and citrus products. The proceeds pay for the system.

“When completed, Sudan will be able to export wheat – a remarkable feat of modern technology,” concludes Jonker.

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