Abstract

The paper aims at estimating the demand function of Sudan’s imports during the period (1992-2015). Considering the importance of imports and the vital role it plays in determining the level of foreign trade and economic growth in Sudan. This is in addition to dentifying and analyzing the factors affecting the volume of imports leading to knowledge of their behavior. It is also a scientific contribution to the literature of the Sudanese economy, especially in its practical aspect.

The paper assumes that the volume of imports is positively affected by both Gross Domestic product (GDP) and is negatively affected both by the exchange rate and foreign exchange reserves.

The paper adopted the descriptive analytical descriptive method, and analyzed the relationship between the variables of the study by estimating the model of the demand function on Sudanese imports according to economic and statistical criteria and evaluating the model’s ability to anticipate.

The main findings of the paper are that most of Sudan’s imports are basic consumer goods, strategic capital goods, and production inputs, which makes them less flexible. Sudanese imports are affected by a number of other variables such as the general level of domestic prices (inflation). The higher the general level of prices, As the size of national income is also affected, the greater the volume of imports.

The paper recommended that the production of commodities in which Sudan is characterized by a comparative advantage through tax exemption should be encouraged to better import substitution policy, since some imported goods do not respond to the increase in the exchange rate and the import tax.

Keywords: Balance of payments (BOP), Current account (CB), Exchange Rate Gap (EXGAP), Foreign exchange reserve (FR), Gross domestic product (GDP), Inflation (Inf ), Official exchange rate (OEX), Parallel exchange rate (PEX ), Trade Balance (TB).

JEL Classification: B00.

Cite as:M. Ab. M. Ahmed. (2018). Estimation of demand function on Sudan imports in the period from 1992 to 2015. Financial Markets, Institutions and Risks, 2(3), 14-27. DOI: 10.21272/fmir.2(3).14-27.2018.

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