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2021 Entrepreneurial Activity Review

Sudan has undergone extraordinary change over just the last two years. In 2019, the country formed a new government under Prime Minister Abdalla Hamdok. This government was briefly deposed by a military coup in October 2021, followed by the reinstatement of the Hamdok government one month later. The 2021 data collected by GEM Team Sudan occurred in the months shortly before the military coup. Therefore, it gives an accurate snapshot of Sudanese entrepreneurship as it stood in the period between the initial Hamdok reforms (starting in 2019) and the most recent episode of political instability. After some initial success following the 2019 reforms, how Sudanese entrepreneurs respond to this moment will be critical to their long-term survival.

The market reforms began by Hamdok in 2019 opened the Sudanese economy for more entrepreneurial activity. However, it should be noted that these reforms also strained many Sudanese as they adjusted to the transitioning economic model. The result was that many Sudanese started new businesses, for a mix of both opportunity and necessity reasons. In 2021, the Sudan TEA rate was 33.6%, second among all GEM economies, while its EBO rate was 8.1%. Sudan did not participate in the 2020 survey, but it appears that its general population has a strong entrepreneurial outlook, which must have been present well before 2019, before the market reforms. Over 70% of Sudanese reported that there were good opportunities to start a business where they live, and nearly 90% state they have the knowledge, skills and experience to start a business. This outlook has contributed to its high rate of entrepreneurial activity.

Of course, COVID-19 has also played a significant role in shaping entrepreneurial activity. In 2021, only 44.7% of Sudanese TEA respondents and 46.0% of EBO respondents stated they saw opportunities as a result of the pandemic, some of the lowest rates among GEM Level C economies. Additionally, 73.1% of TEA respondents stated it was more difficult to start a business than in the previous year. Cumulatively, the challenges of both COVID-19 business realities, in addition to the political unrest, may dampen the potential of Sudanese entrepreneurs, even if they are highly confident in their pursuit of the opportunities made available in the last couple of years.

2021 Framework Conditions Review

Experts gave Sudan relatively low scores across many Entrepreneurial Framework Conditions, reflecting the unstable nature of an entire economy transitioning to a new model. It is difficult to provide ideal conditions for entrepreneurship in such a situation. On the three conditions of government policy, Sudan was given the lowest scores of all GEM Level C economies. These scores indicate the low priority assigned to helping entrepreneurs by the state. This can also be seen in the scores given to the conditions of entrepreneurial education, at both the early and advanced schooling levels. Both sets of scores (1.0 for primary and secondary school; 3.5 for post-secondary school) were the second lowest among GEM Level C economies, again reflecting low investment by the new government in training the next generation of Sudanese entrepreneurs.

However, two areas where experts provided a higher score were in financing and market entry. On the condition of Entrepreneurial Finance, Sudan’s 3.9 score was fifth among GEM Level C economies, while a 3.8 score on Ease of Access to Entrepreneurial Finance placed it fourth. Sudan’s 7.0 score on the condition, Ease of Entry: Market Dynamics was first among GEM Level C economies. This corresponds to the size of Sudan’s domestic market (44 million) and their desire for new products and services. Sudan’s entrepreneurial capacity, combined with its large consumer demand, is a tremendous opportunity, but will require political stability to meet its economic potential.

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