Khartoum University Journal of
Management Studies

OFFICIAL PUBLICATION OF THE SCHOOL OF MANAGEMENT STUDIES, UNIVERSITY OF KHARTOUM
  • Abbreviation: Khartoum Univ. J. Manage. Stud.
  • Language: English
  • ISSN: 1585-8069
  • DOI: 10.5897/KUJMS
  • Start Year: 1994
  • Published Articles: 35

The manufacturing sector in Sudan: Structure, performance and efficiency

Fareed Mohamed
  • Fareed Mohamed
  • Department of Econometrics, University if Khartoum, Sudan.
  • Google Scholar
Ahamad Hassan
  • Ahamad Hassan
  • Department of Econometrics, University if Khartoum, Sudan.
  • Google Scholar


Abstract

The structure of manufacturing output in Sudan is typical of most developing countries where processing of agricultural materials into simple consumer goods dominates other manufacturing activities. Food processing is of overwhelming importance and accounts for more than half of manufacturing activity. Textiles, wearing and apparel and leather products constitute the second largest manufacturing activity providing one-fifth of manufacturing employment.

Small establishment-employing less tha 25 workers-constitute 95 percent of the total number of manufacturing establishments in 1981/82. While these small establishments had a 15.8 percent share of gross investment and 27.2 percent share of employment, they has a proportionate 49.5 percent share of gross value added and 34.2 percent of gross output in manufacturing. Thus, the higher gross output and value added per unit of investment in the small establishments compared to the larger ones make the small sector a relatively efficient one.

Manufacturing is preponderantly in the private sector. It accounts for 69 percent of gross value added, 78 percent of gross output, 53 percent of gross investment and 42 percent of employment in the manufacturing sector (1981/82 Industrial Survey). Yet some 50 large establishments most of them concerned with the processing of agricultural materials are government owned. They account for 14 percent of gross investment, 10 percent of gross value added, 26 percent of employment and 9 percent of gross output. Therefore, the higher gross output and value added per unit of investment in the private sector compared to the public one make the private sector a relatively efficient one. However, these distribution shares pertain only to large establishments. This data deficiency cautions us from drawing too firm conclusions about the efficiency of the private sector.

Our estimates indicate that the elimination of resources malallocation which existed in the manufacturing sector in 1981/82 involves a shift of 3 percent of GDP and a gain of 4 percent in consumer welfare. Constant costs and unitary elasticities of demand are assumed. On both counts we tend to overstate the welfare loss.

Finally, the results of our analysis should be heavily qualified when taking into consideration deficiencies in the 1981/82 industrial survey data.