Sudan and South Sudan Country Risk Report

Published 28 January 2015 | Quarterly

  • 38 pages
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$1,195.00
Sudan and South Sudan Country Risk Report

Core Views:

  • While hopes of genuine political reform have been raised of late, a peaceful outcome to the country's ongoing governance malaise in time for general elections in April 2015 remains unlikely .

  • Economic conditions in Sudan will improve over the coming quarters, but nonetheless remain challenging. We are forecasting real GDP growth of 3.5% in 2015 from an estimated 2.6% in 2014.

  • Sudan's inflation prospects have improved of late and we predict that price growth will average 21.5% year-on-year (y-o-y) in 2015 compared to an estimated 37.4% y-o-y in 2014. The wearing-off of high base effects (associated with the September 2013 currency devaluation), favourable agricultural production prospects and a greater degree of exchange rate stability will help to anchor inflation.

Major Forecast Changes:

  • No major forecast changes

Key Risks To Outlook:

  • Political risk remains the most salient threat to our outlook, as a further deterioration of the security situation could further threaten the economic stability and long-term outlook for both countries.

  • The price of oil represents another important risk to our forecasts, both positive and negative, given both countries are among Africa's top crude producers.

Forecast Tables:

Macroeconomic Forecasts (Sudan 2014-2019)
Indicator 2014e 2015f 2016f 2017f 2018f 2019f
Nominal GDP, USDbn 63.8 76.2 87.4 98.0 112.0 129.2
Real GDP growth, % y-o-y 2.6 3.5 4.4 4.5 4.4 4.4
Consumer price inflation, % y-o-y, eop 25.0 18.0 12.0 12.0 12.0 10.0
Exchange rate SDG/USD, eop 6.25 6.50 6.75 7.00 7.00 7.00
Budget balance, % of GDP -2.6 -4.4 -4.4 -4.3 -4.2 -4.4
Current account balance, % of GDP -7.5 -9.4 -8.4 -7.7 -7.0 -6.2
National Sources/BMI

Click here to explore data

Macroeconomic Forecasts (Sudan 2013-2016)
Indicator 2013e 2014e 2015f

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Elections A Mere Formality
8
A fresh centralisation of powers by President Omar al-Bashir in early January underlines the superficial nature of the year-old 'national
A fresh centralisation of powers by President Omar al-Bashir in early January underlines the superficial nature of the year-old 'national
dialogue,' ahead of elections in April that will bestow a fresh five-year mandate for both al-Bashir and the ruling party
Foreign Policy
9
China To Exert Moderating Influence
9
Sudan's relations with its southern neighbour remain strained, but the intervention of China, which is deploying a 700-strong infantry
Sudan's relations with its southern neighbour remain strained, but the intervention of China, which is deploying a 700-strong infantry
battalion to war-torn South Sudan, should keep the bilateral situation largely contained, even if, as seems likely, the war in the south
battalion to war-torn South Sudan, should keep the bilateral situation largely contained, even if, as seems likely, the war in the south
persists for some time yet
Chapter 2: Economic Outlook
11
SWOT Analysis
11
BMI Economic Risk Index
11
Sudan Economic Activity
12
Easing Inflation To Support Growth In 2015
12
Economic growth in Sudan will accelerate in 2015 aided by falling inflation, robust agricultural production and rising gold exports
That
said, conditions remain challenging and risks are weighted to firmly to the downside
TABLE: Eco nomic Act ivity
12
Sudan Inflation/FX
13
Inflation To Moderate In 2015
13
Inflation in Sudan will moderate in 2015 due to lower fuel prices, favourable agricultural production prospects and improved exchange
Inflation in Sudan will moderate in 2015 due to lower fuel prices, favourable agricultural production prospects and improved exchange
rate stability
TABLE: Monetar y Policy
13
South Sudan investment climate
14
New Year To Bring Same Old Story
14
A year after fighting first broke out in South Sudan a lasting peace agreement continues to prove elusive
Hostilities will resume over the
coming months following a lull in fighting due to heavy seasonal rains
Chapter 3: 10-Year Forecast
17
The South Sudanese Economy To 2024
17
The South Sudanese economy is among the most underdeveloped in all of Sub-Saharan Africa, and has significant potential due to its
The South Sudanese economy is among the most underdeveloped in all of Sub-Saharan Africa, and has significant potential due to its
huge oil reserves, expanding population, large amount of arable land, and proposed integration with East African nations
However, it
faces serious challenges in order to fulfil this potential, including security concerns with its neighbour to the north and among rival ethnic
faces serious challenges in order to fulfil this potential, including security concerns with its neighbour to the north and among rival ethnic
groups, a gaping infrastructure deficit, and a lack of human or physical capital
TABLE: Long-Term Macroeconomic Forecasts
18
The Sudanese Economy To 2024
19
Secession Poses Key Risk For Long-Term Growth
19
There is strong economic growth potential in the non-oil sector, but the uncertainties related to the secession of South Sudan generate
There is strong economic growth potential in the non-oil sector, but the uncertainties related to the secession of South Sudan generate
risks for many variables, particularly the fiscal accounts
TABLE: Long-Ter m Macroeco nomic Forecasts
19
Chapter 4: Operational Risk
21
SWOT Analysis
21
Operational Risk Index
21
Operational Risk
22
TABLE: Operat ional Risk
22
Availability Of Labour
23
TABLE: Sub -Saharan Africa - Availability Of Labour Risk
24
TABLE: Sudan - Top 10 Countr y Sources For Migrants
25
Crime Risk
28
TABLE: Sub -Saharan Africa - Crime Risks
29
Chapter 5: BMI Global Assumptions
33
Global Outlook
33
New Era For Oil
33
Table : Global Assumptions
33
Table : Developed States , Real GDP Growth, %
34
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
34
Table : Emerging Markets , Real GDP Growth , %
35

The Sudan and South Sudan Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Sudan, South Sudan. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Sudan, South Sudan's economic, political and financial prospects through end-2019, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Sudan, South Sudan's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Sudan, South Sudan's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Sudan, South Sudan, including currency volatility, the commodity price boom and protectionist policies.

The Sudan and South Sudan Country Risk Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Sudan, South Sudan' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Sudan, South Sudan through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Sudan and South Sudan Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Sudan, South Sudan and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Sudan, South Sudan, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Sudan, South Sudan over the next 5-years?

BMI's Sudan, South Sudan country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Sudan, South Sudan Market - Political Strengths, Weaknesses, Opportunities and Threats facing Sudan, South Sudan.
  • Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Sudan, South Sudan's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Sudan, South Sudan’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Sudan, South Sudan's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Sudan, South Sudan?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Sudan, South Sudan against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Sudan, South Sudan’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express