Concepts, Uncertainties, and Reaction to Financial Risk in the Sudanese

Manufacturing Sector

IBRAHIM OMER ELFAKI

Department of Finance,

Applied College,

King Faisal University,

King Faisal University,

Al-Ahsa, Al-Hofuf, Juba district, Prince Mutaib bin Abdul-Aziz Street,

KINGDOM OF SAUDI ARABIA

Abstract: - The study aimed to highlight the uncertainties about, reactions to, and perceptions of the financial

risks which prevail in the manufacturing sector in Sudan. The study adopted the descriptive analytical approach

to examine the coherence between concepts, reactions, and doubts to manage financial risks in the Sudanese

manufacturing sector. Manufacturers from Khartoum were asked to fill out the study questionnaire. At a later

time, responses were analyzed using the statistical package for the social sciences (SPSS) version 22.0. The

were due to low manpower, machinery, and low-quality materials.

Key-Words: - Concepts, Financial Risk Management, Manufacturing Sector, Reaction, Sudan, Uncertainties

Received: May 4, 2023. Revised: September 27, 2023. Accepted: October 2, 2023. Published: October 13, 2023.

1 Introduction

1.1 Background to the Study

The industrial sector in Sudan is relatively narrow.

activity in Sudan. It is worth noting that most

factories in Sudan operate far below their capacity.

The growth rate of the industrial sector production in

Sudan, according to 2017 statistics, is only 2.5%,

partner, in addition to other countries such as Japan,

Egypt, and Saudi Arabia.

many different connotations. Risk is used to

characterize numerous situations where the result is

unknown. Risk is frequently used in probability and

indomitable, firms must be able to swiftly adjust to

variables in the economic environment in local and

international contexts, to extend the operating scale,

boost market share, and maximize company value.

Thus, financial risk can not be avoided in the

process's financial activity. As a result, figuring out

the origins of the financial risks and implementing

effective actions to eliminate them while they are

still manageable are critical. For instance, using

listed manufacturing businesses. This essay seeks to

zones in Sudan and a spatial analysis of the

characteristics of the problems that the industry

suffers from. The rationale of the study is to

investigate the extent of the contribution of the

manufacturing industry to the economic

development in Sudan. To develop solutions to the

problems and obstacles of the manufacturing

industries, workers with the poor infrastructure of

the Sudanese economy, and energy problems. The

study employed the deductive method to ensure the

evaluated how the aerospace industry in particular

may operate as a catalyst for Sudan's sustainable

growth. Based on a thorough industrial survey

conducted in 2001 with support from the United

Nations Industrial Development Organization and

the United Nations Development Program, the study

assessed and analyzed the contribution of the

industrial sector to the Sudanese economy. After

The paper by, [7], investigates operational

developed for the successful implementation of risk

management in manufacturing organizations.

The authors of the study, [8], investigated how

entrepreneurial marketing risk management affects

organizational competitiveness in the context of

Nigerian companies that manufacture industrial

According to the study, Nigerian companies that

manufacture industrial goods should implement a

framework for managing risks to reduce possible

losses in the market.

Originality and Value - Although there are

studies that examine uncertainty and reaction to

financial risks in the manufacturing sector, this study

is a unique effort to gauge the effectiveness of risk

management in Sudan. More specifically in light of

the difficult political and economic conditions that

1.3 The Objectives of Risk Management

knowledge regarding the risks associated with the

organization to incorporate appropriate systems to

manage these risks is the main objective of risk

management. In addition to ensuring proper

communication of risk management at

organizational levels and reducing overall

organizational losses.

The risk exposures differ from traditional

property causally to financial risks such as credit

risks and currency fluctuations, in addition to

1.4 Benefits of Risk Management

Business organization's strategies encompass

mission, vision, and objectives so by linking these

strategies with risk management; organizations gain

a competitive advantage by looking at how risks

might violate the achievement of the ultimate goals,

the insurance sector influences the behavior of the

manufacturing sector in two ways:

Risk management is sometimes also known

as insurance management, but they are not similar.

administration of a firm's insurance program, [13].

The courses of action are needed to be formulated

from the best available evidence because the

outcomes of insurance management decisions are

uncertain. It is necessary to reduce the expected

financial outcomes to an acceptable probability as

the risk outcomes may vary, depending on the

current situation.

Sudan being an under-developed country mainly

relies on the industrialization of potentials for

the cost-benefit analysis. This planning is needed in

most of the manufacturing sectors. The financial

on the concepts, reactions, and uncertainties

associated with the manufacturing sector as a result

of the financial crisis.

The manufacturing sector must ensure the

protection of its financial facilities and loans against

financial risks. The results of the study will

contribute to an improved understanding of the basic

features compatible with the manufacturing sector of

Sudan to remain secure from the financial crisis. It is

crucial to investigate the impact of the

Sudan. It also highlighted the responsibility of the

insurance sector in dealing with actual and potential

losses in this sector. Moreover, the study has

(2010 – 2020) since the reporting systems of

insurance companies in Sudan were unified due to

the introduction of the Islamic insurance system

during such years. The survey about the

manufacturing sector has been conducted in

manufacturers in Sudan. The state of Khartoum was

selected for conducting this study as it features

diverse manufacturing sectors in comparison with

other states. For instance, 64% of the large

manufacturing sectors are situated in the state of

Khartoum. The questionnaire given to the

respondents was divided into two parts; the first part

concentrated on the perception of risk management;

whereas, the second part focused on the actual

situation of risk management that defined various

Statistical Package of Social Sciences (SPSS)

version 22.0 using a confidence level of 95%.

The industrial activities in Sudan started with

After the 20th century, the role of risk

Table 1. Various uncertainties and financial risks prevail in different organizations

departments, risk management tools, and outsourced

risk management teams. The manufacturing sector

needs to review the efforts to ensure the effective

integration of strategic and operational decisions

with an increase in corporate risk management.

7 Result and Discussion

The study has recruited various manufacturers from

the industry. The results are mainly concerned with

necessary to monitor and control the risks to survive

in a world of uncertainty. Regarding the

management of financial risks, 95.6% of the

manufacturers responded that risk management is

The manufacturers are significantly associated

Table 2. The perception of risk managers towards the function of risk management

Source: Primary Data (

) (author's work)

Source: Primary Data (

) (author's work)

Table 5. Risk management function

Concerning the reporting situation 54.1% of the

respondents show that the risk manager reports to the

finance manager, 31.8% show that he should report

to the chief executive, 9.1% indicate that he should

report to both the board of directors and chief

executive and 5% indicate that he should report

circulation at all, whereas only 9% indicated that the

For the period of safety audit within the

Source: Primary Data (

) (author's work)

Source: Primary Data (

) (author's work)

emanated within the sector or present outside of their

value chains. The manufacturing sector experiences

various difficulties and uncertainties that include;

uncertainties and risk factors associated with the

manufacturing sector in Sudan, including continuous

conflict, lack of political stability, imbalanced

development strategies, increased unemployment

rate, regional disparities, and poverty, [14].

However, technological developments can overcome

the strategic challenges and problems faced by the

The developing countries are at greater risk of

The control of production in the manufacturing