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
Sudan will see weak growth this year and next. Declining oil production in South Sudan and weakened consumer spending power will mitigate economic activity in the short term, whilst sanctions will restrain investment in the longer term.
South Sudan will remain vulnerable to significant political unrest over the coming months, after a recent outburst of violence in the capital Juba has tipped the country perilously close to returning to civil war. On July 7, members of the Sudan People's Liberation Army/Movement (loyal to President Salva Kiir) and Vice President Riek Machar's Sudan People's Liberation Movement-in-Opposition clashed in Juba.
Economic conditions in South Sudan will be extremely challenging in 2016 and 2017, as falling oil production hits exports hard and hyperinflation suppresses consumer...
Sudan Operational Risk Coverage (9)
Sudan Operational Risk
Sudan Operational Risk
BMI View: Sudan's operating environment is extremely unappealing for investors, with business activities threatened by security issues, an uncompetitive labour market and high levels of corruption. Foreign companies are often a target for rebel militias and terrorists, while Sudanese forces have limited capacity to protect international interests. Restricted access to education has resulted in a poorly skilled labour pool and high labour taxes put upward pressure on costs. While businesses benefit from inexpensive utility costs, water scarcity and an increasing reliance on oil imports threaten supply. In addition, international trade is hampered by long lead times and high costs of shipping. Sudan consequently receives a low score of 29.4...
Sudan Crime & Security
Sudan Crime & Security
BMI View: Sudan's operating environment is threatened by the many security risks affecting the country, which make it extremely difficult for businesses to operate without incurring significant security costs. The violence between militant groups and security forces in Darfur and southern regions contributes to internal instability and restricts businesses as they are not able to operate in these areas. Sudan also has tense relations with South Sudan and the risk of conflict erupting between the two countries cannot be ruled out. While crime rates are low in the capital Khartoum, the lack of government capacity to enforce the rule of law exposes companies to numerous crimes, including money laundering and cyberattacks, and the overall security situation is detrimental to investment. Sudan therefore receives a very low score of 12.7 out of 100 for Crime and Security...
Sudan Labour Market
Sudan Labour Market
BMI View: Sudan provides businesses with a highly unattractive labour market. Decades of war and conflict have decimated the country's education and healthcare systems, and mean that there has been a steady exodus of the country's skilled professionals in the past ten years. Sudan's large and young working-age population does not translate into a large potential labour pool because of the poor education levels of the population; low health levels, which reduce worker productivity; and the low labour force participation rate. Employers will be required to source workers from other countries, especially in the cases of skilled and technical positions. High labour costs serve to reduce the market's attractiveness even further. Consequently, Sudan scores 31.8 out of 100, ranking 38th out of 48 Sub-...
BMI View: Sudan has the potential to become a major conduit for regional trade to landlocked countries such as Chad and South Sudan. However, the country's appeal as a trade hub is constrained by an underdeveloped land transport system and lengthy trade procedures, which increase shipping lead times and transport costs considerably. Despite these drawbacks, Sudan is slowly rebuilding key components of its road and rail network to facilitate trade flows, while other logistics advantages like low utility costs partly mitigate these risks. As a result, Sudan scores 42.1 out of 100 for Logistics Risk, placing ninth out of 48...
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: High levels of inflation will drag on vehicle sales as consumers delay big-ticket purchases such as new vehicles. The threat of political and civil unrest will deter new investment into domestic vehicle production keeping the market reliant on the import market.
|New Vehicle Sales Remaining Muted|
|Passenger Vehicle Sales|
|f = BMI forecast. Source: Renault Group, BMI|
New vehicle sales...
Defence & Security
Sudan Defence & Security
BMI View: Sudan is the third largest arms manufacturer in Africa, capable of producing a range of (primarily ground-based) military products. That said, the local defence industrial base remains underdeveloped, and research and development activities are limited. As such, the country will continue to rely on imports for the procurement of more technologically advanced equipment over our forecast period to 2025. The persistent risk of war with South Sudan, as well as threats posed by the conflict in Darfur and insurgency in the South...
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: In Q216, Zain announced it will buy 92.3% of Sudanese wireline operator Canar from Etisalat for USD95.2mn, subject to regulatory approval. The deal would consolidate Zain's presence in Sudan, where its 11.909mn mobile subscribers and Canar's 91,467 wireline subscriptions account for commanding market shares of 42.6% and 76.9% respectively. Although currency volatility has impaired telecoms investments in Sudan over the last 12 months, the country continues to be one of the strongest markets in Zain's footprint, and we believe the company is right to act on this market-deepening opportunity. However, the Bank of Khartoum has vetoed the deal and wishes to acquire the shares from Etisalat itself.
|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|