Government has undertaken capacity-building activities with some organisations such as the African Development Bank (AfDB) to improve debt management. Given the uncertain prospects for debt relief, the strategy focuses on domestic debt markets to finance development projects. 45. Decentralization of government finances is at its nascent stage as the central government still retains most of the execution powers. Hence, government finances have remained relatively centralized. In addition, there is outpacing of expenditure decentralization over revenue decentralization. What this implies is that while the central government collects about 97% of total taxes and 86% of total revenues, its corresponding responsibilities in terms of expenditure fall short of its ability to pay. While the state governments accounted for a relatively high proportion of government employees, the central government accounted for only 71% and 74%, respectively. This indicates that the central government has maintained control on revenue collection while assigning more expenditure responsibilities to state governments. 46. Public finance institutions in Sudan are the output of a combination of political, legal, and administrative mechanisms. The legal and constitutional origins of public financial management in the form of institutional and procedural functions are enshrined in the Comprehensive Peace Agreement (CPA) of 2005 and the Interim National Constitution (INC). The Financial Accounting and Procedures Law of 1977 (amended in 2006 to accommodate CPA fiscal and financial provisions) sets the legal framework for fiscal and financial policies. 47. The performance of Public Finance Management (PFM) is gauged by financial depth as well as reduction in fiscal deficit, declining from -3.5% in 2012 to -0.9% in 2014, but it widened marginally to -1.5% in 2015, while financial depth (measured by domestic credit to private sector as percentage of GDP) slowed down from 12.04% in 2012 to 8.2% in 2015. These figures reiterate the need to consolidate the implementation of the PFM reforms at the federal level and then extend to the states. 48. The Government has enacted acts such as the Illicit and Suspected Enrichment Act of 1989, the National Audit Chamber Act of 2007, the Procurement Act of 2010 and the new Act on combating money laundering and financial terrorism, which was enacted in 2011 to supplement the 2004 Act to combat corruption. It has also formed the Sudan chapter of Transparency International (2014) and adopted the AU and UN Conventions on Preventing and Combating Corruption (2003). In addition, the Sudan Penal Code 2003 criminalizes corruption-related offences such as attempted corruption, bribery of foreign officers and money laundering. 49. The independence of the Auditor General Chamber is guaranteed by law to report audit of government finances. The unfettered independence of the Auditor General was demonstrated through observance of its constitutional duty of carrying out audit of government expenditure and reporting to Parliament. A report presented by the Auditor-General to Parliament in 2012 revealed cases of corruption at the federal and state levels. 50. Sudan’s trade with the economies of North Africa is not adequately integrated, accounting for less than 1% (2014) of its total exports, and 6.5% of its imports. Sudan’s exports to the whole of Africa represented less than 10% of the total imports and total exports between 2011 and 2014. Sudan’s imports represented not less than 80% of its total imports from Asian and Arab countries, while it exported a larger share (about 65%) to the industrial and Asian countries. This suggests very strong trade relations between other regions and Sudan except with Africa. 51. Sudan’s historical attractions, natural parks and sea coast provide potentials for tourism development. FDI inflows before 1998 represented less than USD 100 million per annum. By 2009, FDI inflows had reached USD 1.7 billion. FDI statistics in 2012 and 2013 suggest that FDI inflows remained at pre-secession levels; but there was a surge in 2012, with total inflows reaching USD 2.3 billion, and later declining to USD 1.2 billion in 2014. The figures are beginning to trend upwards at USD 1.7 billion in 2015, thus placing Sudan among the highest FDI-receiving African countries. A substantial share of the FDI inflows originated in Saudi Arabia and Qatar, and was directed towards agriculture and energy. 52. The legal status that drives both domestic and foreign investment is Sudan is the National Investment 09