Our comprehensive assessment of 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 Sudan, as well as the latest industry developments that could impact 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 Sudan before your competitors.
Sudan Country Risk
A more supportive inflationary environment and prudent fiscal and monetary policy will keep economic growth in Sudan stable and moderately paced over the coming quarters.
Facing rising political and economic pressures, Sudan's ruling National Congress Party will continue to engage in National Dialogue with its domestic foes and international mediators. That said, we expect talks to yield little, with an end to crippling economic sanctions or meaningful international debt relief both highly unlikely over the next 12 months.
In South Sudan, there growing evidence that the protracted nature of the civil conflict - which began in December 2013 - is leading to a hollowing out of state capacity and civil society and a breakdown of the formal economy.
Our negative outlook for the South...
Sudan Operational Risk Coverage (9)
Sudan Operational Risk
Sudan Operational Risk
BMI View: Trade and Investment Risk is Sudan is very high. The country remains under economic sanctions, the financial markets are underdeveloped, and the legal risks to investors are acute. Meanwhile, competition in the open market is stifled by state-owned enterprises and politically aligned private businesses. These factors severely limit international trade, and are only partially mitigated by improvements to the tax regime and licensing procedures under the Investment Encouragement Act. Sudan scores 31.1 out of 100 for Trade and Investment, ranking 32nd out of 48 countries in the Sub-Saharan Africa region.
|Regional Underperformer For Most Categories|
|Sudan and Regional Average Trade and Investment Risk|
Sudan Crime & Security
Sudan Crime & Security
BMI View: The risk of crime, terrorist attacks, and interstate warfare is acute in Sudan. Foreign workers and companies are a target for organised crime, anti-government insurgents, and international terrorists. Moreover, the complexity of the Sudanese security environment makes conflict resolution very difficult.
Sudan exhibits some of the highest risks for crime, terrorism, and interstate security, of any country in the world. With such pervasive security threats from domestic and international actors, the country performs badly for Crime and Security risk, scoring 8.2 out of 100. This makes it the fifth-most at risk country in the world.
The risk of interstate conflict involving Sudan is very high. While Khartoum has established good...
Sudan Labour Market
Sudan Labour Market
BMI View: The Sudanese labour market presents significant operational challenges to companies and poses significant risk to investors, including a poorly skilled workforce, rising minimum wage, low flexibility in the labour market, tight immigration controls, and uncompetitive tax on labour. A core weakness in Sudan's labour market is the education sector, which presents a threat to labour supply. This has a knock- on effect for the availability of labour, which is characterised by a low participation rate and poor competency levels. Sudan scores 26.1 out of 100 and ranks last out of the 48 Sub-Saharan African countries included in the BMI ...
The major downside logistics risks in Sudan are poor land transport and heavy trade bureaucracy, which raise shipping lead times and elevate costs for companies. On the upside, Sudan has sufficient electricity supply at affordable tariffs, and high volumes of international trade which increase the overall size of the market.
Trade Procedures and Governance present the greatest challenges to investors out of the three pillars of the BMI Logistics Risk Index. The Extent of Transport risk is marginally lower, and is set to decrease if rail development succeeds. Meanwhile, Market Size and Utilities risk is the strongest facet of Sudan's logistics risk. The country ranks 13th out of 44 states in Sub-Saharan Africa (SSA) in BMI's Logistics Risk Index, with a score of 39.3 out of 100.
By regional standards, Sudan has low trade bureaucracy requiring fewer documents than regional...
Sudan Trade & Investment
Sudan Trade & Investment
Trade and Investment risk is Sudan is very high. The country remains under economic sanctions, the financial markets are under developed, and the legal risks to investors are acute. Meanwhile, competition in the open market is stifled by state-owned enterprises and politically aligned private businesses. These factors severely limit international trade, and are only partially mitigated by improvements to the tax regime and licensing procedures under the Investment Encouragement Act.
Sudan scores 24.6 out of 100 for Trade and Investment, ranking 158 th out of 170 countries globally, one place below Libya. Legal reforms have reduced the risk of Government Intervention. However, a mêlée of internal and external factors limit Economic Openness. With regards to Legal Risk, Sudan is among the world's highest risk nations.
Legal Risk is the primary deterrent to international investment in Sudan. First, the country...
Sudan Industry Coverage (8)
BMI View: The constant threat of political and civil unrest will continue to drag on total vehicle sales in 2016. The depreciating currency, coupled with high inflation levels, will continue to push vehicle prices up, keeping total vehicle sales below its previous peak level of some 12,298 units in 2009.
|New Vehicle Sales Remaining Muted|
|Passenger Vehicle Sales|
|f = BMI forecast. Source: Renault Group, BMI|
Defence & Security
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
Sudan Food & Drink
BMI View: We maintain our view that economic growth in Sudan will pick up modestly over the coming quarters, with real GDP set to expand by 3.7% in 2015 and 4.3% in 2016 (from an estimated 3.0% in 2014). This improvement is in large part due to easing inflationary pressures as the high base effects associated with a painful currency devaluation in September 2013 wear off. Our forecast for a significant rise in per capita food consumption in 2015 is a result of very low current consumption and high inflation. However, the demographic profile of the countries, with their significant young population, will...
Oil & Gas
Sudan Oil & Gas
BMI View: Above-ground factors will continue to be the main drags on the oil sector in both Sudan and South Sudan. Pervasive security threats, coupled by the sharp decline in global crude prices, are deterring investment in exploration and production, undermining long-term production growth. The downstream sector looks equally inhibited, due to prospectively low rates of return and limited appetite for investment among foreign firms.
Pharmaceuticals & Healthcare
Sudan Pharmaceuticals & Healthcare
BMI View: Sudan is attempting to reduce its reliance on imported pharmaceuticals with government support. Despite an investment from an Egyptian drugmaker this quarter, the country will not achieve this goal in the near future given the current political environment.
Headline Expenditure Projections
Pharmaceuticals: SDG2.68bn (USD451mn) in 2014 to SDG3.00bn (USD491mn) in 2015; +12.1% in local currency terms and +8.7% in US dollar terms. Forecast revised slightly upwards from Q415.
Healthcare: SDG24.03bn (USD4.05bn) in 2014 to SDG27.05bn (USD4.42bn) in 2015; +12.6% in local currency terms and +9.1% in US dollar terms. ...
BMI View: Sudanese hydropower will remain the dominant source of electricity up until 2024, with an average of 75% of generation coming from hydroelectric sources, increasing overall electricity generation to 23.9TWh in 2024.This will enable
BMI View: We maintain our view that Sudan saw significant mobile market growth in 2015 when compared to 2014 and 2013 due to weak consumer spending and limited infrastructure investments. Sudan will witness modest mobile subscriber growth out to 2020 reflecting ongoing economic woes in the country such as consumer confidence, inflation and currency volatility. We hold the opinion that South Sudan will undergo stronger growth despite the challenging security situation. Operators will continue to invest in building up their networks. Organic growth prospects in South Sudan are much higher than neighbouring Sudan in terms of mobile subscribers and we retain an optimistic outlook for the country.
|A Tale Of Two Sudans|
BMI View: The Q1 2016 East Africa report analyses the latest industry, regulatory and macroeconomic developments within the telecommunications markets in Burundi, Ethiopia, Malawi, Rwanda, South Sudan and Sudan. These six markets are characterised by several challenging business dynamics, including low consumer spending power, high infrastructure costs, large rural populations with poor access and, some cases, politically volatile environments. Limited competition in several of these markets, along with unfavourable fiscal regimes, creates considerable downside risks to market growth. 3G and 4G subscriber penetration rates, as well as their share of total mobile subscriber bases, are expected to remain among the lowest in the world for the foreseeable future.
|3G And 4G Subscribers to Increase Share of Total Mobile Market|
|East Africa Mobile Market Forecasts|