This paper examines the potential impact of oil revenues on the economy of Sudan and the challenges facing the Government in policy making; particularly trade policy, allocation of oil revenues for long-run development, and diversification of the production and export structure of the economy. Developing a conceptual framework of analysis, the author argues that while export of petroleum provides financial resources for the acceleration of investment and growth, prospects for sustained growth and diversification will be still limited by some physical and institutional bottlenecks, not easily overcome by just oil revenues. Export of oil may also have other negative effects on Sudan’s economy.
 
May 14, 2008.