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Working Paper 384 - Drivers of Sudan’s Growth: New Growth Model for Stability and Shared Prosperity

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Working Paper 384 - Drivers of Sudan’s Growth: New Growth Model for Stability and Shared Prosperity

Working Paper 384 - Drivers of Sudan’s Growth: New Growth Model for Stability and Shared Prosperity

25th October 2024

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  • Working Paper 384 - Drivers of Sudan’s Growth: New Growth Model for Stability and Shared Prosperity
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This study assesses Sudan’s current growth model and proposes a new growth model (NGM) that provides appropriate response to the drivers of the current conflict, notably weaknesses in governance and socioeconomic inequalities and structural constraints. The study utilises growth accounting approach based on endogenous growth model to account for sources of growth with an interest on growth sustaining factors.

The study also utilises 1980-2021 data to assess the key drivers of growth. ARDL model is estimated, involving a dynamic structure and testing for cointegration to determine long-run relations. ARDL estimates are used to simulate growth drivers under the NGM, and to forecast job creation. The results show that over the period 2000-2021, key drivers of growth are persistence and structural factors, with stabilisation and external factors contributing the least. In the early 2000s, persistent and external factors were the dominant drivers of growth, while persistence dominated in the late 2000s.

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Policy recommendations are proposed to mitigate the challenges identified in the current growth model. A key precondition to mitigating the political and macroeconomic instability is ending the ongoing conflict. Other priorities include reconstruction of institutions and infrastructure; restoration of macroeconomic stability; and resumption of key structural reform.

Report by the African Development Bank

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