Our comprehensive assessment of South Sudan's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect South Sudan, as well as the latest industry developments that could impact South Sudan's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in South Sudan before your competitors.
South Sudan Country Risk
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.
South Sudan Industry Coverage (7)
South Sudan Autos
According to data published by Renault, vehicle sales in the Sudanese auto market surged 25.2% year-on-year (y-o-y) in February 2015, to 253 units. This brought sales for the first two months of 2015 to 474 units, an increase of 24.7% y-o-y. The strong start to the year has prompted us to upgrade our full-year sales growth forecast from 11.0% to 20.0%, which will see sales reach 3,480 units in 2015.
Vehicle sales still remain below their 2011 levels due to sharp declines in the market in 2012 and 2013. Over our 2016-2019 forecast period, we expect steady growth in sales at an annual average rate of 9.1%, which will see sales reach 4,920 units by 2019. However, given the low base at which sales are at now, the sector's story over the coming years will be one of recovery rather than expansion.
Some headwinds for the sector include a lack of security in the country due to armed conflict...
Defence & Security
South Sudan Defence & Security
BMI View: Sudan boasts one of the region's largest defence sectors but still imports a significant volume of military equipment and services from Russia, China and Iran. Over the longer term, as the country's defence sector improves and it becomes more self sufficient, we expect there to be an increasing volume of defence exports, largely to the wider African region. A key driver behind the expansion of its military capabilities will remain the deteriorating situation in South Sudan and the ongoing violence between warring factions, opposition groups and government authorities. However, even though the country is looking for new export partners, we...
Food & Drink
South Sudan Food & Drink
Economic conditions in Sudan will improve over the coming quarters, but nonetheless remain challenging. We are forecasting real GDP growth of 3.8% in 2015 from an estimated 2.6% in 2014. This improvement will be due in part to easing inflationary pressures as the government keeps monetary and fiscal policy tight. In addition, the high base effects associated with the September 2013 currency devaluation are expected to wear-off. This will provide some respite to Sudanese consumers who have seen their purchasing power severely eroded in recent quarters. Economic activity is also likely to be supported by strong agricultural output and further robust growth in gold production.
Despite this improvement on 2014, growth will continue to be weighed down by persistent insecurity and what remains a fragile and uncertain political environment. While hopes of genuine political reform were raised in 2014, a peaceful outcome to the country's...
South Sudan Infrastructure
BMI View: Sudan and South Sudan face a multitude of issues with ongoing conflict having drastically eroded what little investor confidence there was in the markets and as such we forecast volatile and poor growth for both countries over our forecast period. Lower oil prices in particular will limit the ability of governments to implement their spending plans in the infrastructure sector - focussing on current spending instead - and with little investor interest left, there will be few infrastructure growth drivers.
While current events in Sudan and South Sudan overshadow their relationship with each other, oil trade between the two remains the...
Oil & Gas
South Sudan Oil & Gas
BMI View: The outlook on Sudan and South Sudan's upstream sector has grown increasingly bearish. An unstable political environment and chronic weakness in both countries' security landscapes will drive repeated supply outages and chronic underinvestment. Exports will also come under increased strained, as a sustained fall in global oil prices, rising refined fuels import dependence and longer-term crude production decline all act to undercut revenues.
Pharmaceuticals & Healthcare
South Sudan Pharmaceuticals & Healthcare
BMI View: Access to healthcare in Sudan and South Sudan is poor and drug shortages are commonplace. The state is also heavily reliant on importing its medicines, though over the long-term we believe this reliance will decrease as the government is committed to developing domestic pharmaceutical production.
Headline Expenditure Projections
Pharmaceuticals: SDG2.06bn (USD353mn) in 2014 to SDG2.37bn (USD387mn) in 2015; +15.0% in local currency terms and +9.8% in US dollar terms. Forecast revised upwards from Q115.
Healthcare: SDG20.31bn (USD3.48bn) in 2014 to SDG22.85bn (USD3.73bn) in 2015; +12.5% in local currency terms and +7.4% in US dollar terms....
South Sudan Power
BMI View: The end of the long period of warfare provides an opportunity for investors to exploit the hydrocarbons base and ample sunshine to develop a generation capacity in Sudan and South Sudan. However, the commercial environment is hostile and the political environment remains highly unstable.
The outlook for Sudan's power sector is moderate. The end of the long period of warfare provides a window of opportunity for the country to exploit its ample sunshine and large hydrocarbons base to develop a domestic generation capacity. In this context, power generation in 2015 will increase by a respectable 4.1% year-on-year (y-o-y) to 7.5TWh and consumption will grow 4.1% y-o-y, to 5.9TWh. However, the commercial environment is hostile and continues to be dominated by the state-owned National Electricity Corporation, limiting the opportunity for...