Sudan
In-depth country-focused analysis on Sudan's economic, political and operational risk environment, complemented by detailed sector insight

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.

Country Risk

Sudan Country Risk

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Core Views:

  • While conflicts between various tribes and ethnicities were already ongoing in both countries, the descent into full-scale armed conflict in South Sudan has major negative implications for the two countries, significantly curtailing growth and weakening the external accounts.

  • The Sudanese economy will continue to operate well below potential in 2015 on account of restrained government spending, an unappealing investment climate and both domestic and regional insecurity.  We predict that real GDP growth in 2015 will come in at around 3.8%.  

Major Forecast Changes:

  • No major forecast changes

Key Risks To Outlook:

  • Political risk...

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Sudan Operational Risk Coverage (9)

Sudan Operational Risk

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Sudan is a dangerous place to invest and do business in. Foreign companies are a target for rebel militias and terrorists, while Sudanese forces have limited capacity to protect international interests. In addition, the business environment is fraught with legal risk and market forces are undermined by government intervention and corruption. Local labour is poorly skilled, while rising minimum wages and high labour tax put upward pressure on costs. Finally, international trade is hampered by long lead times and high costs of shipping, although overall logistics risk is mitigated by local energy security.

Sudan scores 22.2 out of 100 in the BMI Operational Risk Index. This makes Sudan the ninth-most high risk country in the world for companies to operate in. The greatest level of operational risk stems from Crime and Security, followed closely by Labour Market Risk. New laws have eased Trade and Investment Risk in the...

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Sudan Crime & Security

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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...

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Sudan Labour Market

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The Sudanese labour market presents significant operational challenges to companies and poses significant risk to investors, which will face a myriad of downside risks such as 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 defined by a low participation rate and poor competency levels. Sudan scores 32.4 out of 100 and ranks fifth last out of the 44 Sub Saharan African countries included in the BMI Labour Market Risk Index.

Enrolment rates in primary, secondary and tertiary education are very low because access to a public education is limited. Public services are limited to urban centres, which results in 67% of the population living in rural...

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Sudan Logistics

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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...

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Sudan Trade & Investment

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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...

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Sudan Industry Coverage (8)

Autos

Sudan Autos

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BMI View:   Rising political unrest and insecurity across Sudan represent a growing threat to economic activity and autos sales in the country. We maintain our bearish forecast for Sudanese new car sales at just 6,890 new car sales in 2018, up slightly from 4,600 cars expected to be sold in 2014.

Rising political unrest and insecurity across Sudan will significantly disrupt economic activity over the coming quarters. High inflation will continue to weigh on headline growth and private consumption especially, while the ongoing crisis in South Sudan will see oil production stall. We predict that real GDP growth will register 2.0 % in 2014 and 4.3% in 2015, with risks weighted heavily to the downside.

We have revised down our economic growth forecasts for...

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Defence & Security

Sudan Defence & Security

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BMI View: Sudan is almost wholly dependent on the import of military equipment and services. It sources considerable supplies of equipment from Russia and China, both of which are willing to furnish the regime with arms despite it being under a number of major international sanctions. 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.

Sudan continues to be wholly dependent on the import of military equipment and services, sourcing considerable supplies from Russia and China. Most of Sudan's imported small arms, light weapons, ammunition, rocket and grenade launchers have come from China in recent years, a trend we expect to continue as the need for large volumes of arms remains amidst...

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Food & Drink

Sudan Food & Drink

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BMI View:    We have revised down our economic growth forecasts for Sudan in light of a deteriorating security situation. We are now forecasting real GDP growth of 2.0% and 4.3% in 2014 and 2015 respectively, down from 2.4% and 4.8% previously, and we caution that risks are weighted firmly to the downside. Private consumption will remain subdued over the coming months and we are forecasting a real terms increase of just 2.2% in 2014. While we expect private consumption growth to quicken in 2015, it will remain well below historical trend levels.

Conflicts in a number of states have displaced thousands of people, seriously disrupting normal economic activity and the ability of households to maintain their income levels. High inflation will continue to erode consumer purchasing power over the coming months. Headline price growth reached 37.0% year-on-year (y-o-y) in...

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Infrastructure

Sudan Infrastructure

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BMI View:   We do not expect market conditions to improve drastically over 2015 in either Sudan or South Sudan.  Conflict has 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. Oil flows between the two countries will be a vital source of revenue, although they remain highly vulnerable to any souring of relations.  

While current events in Sudan and South Sudan overshadow their relationship with each other, oil trade between the two remains the key to any kind of sustainable growth with the respective construction...

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Oil & Gas

Sudan Oil & Gas

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BMI View:   F ighting has derailed the country's fragile production recovery, adding further downside pressure to its bearish long-term production outlook. With the government claiming loose control of the major oil fields, output could start to revive within the quarter. However, given the fractured and volatile nature of the conflict and the heavy rebel presence in the oil-producing states, we anticipate more lasting production outages .

Headline Forecasts (Sudan 2012-2018)
  2012e 2013e ...

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Pharmaceuticals & Healthcare

Sudan Pharmaceuticals & Healthcare

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BMI View:   T he pharmaceutical and healthcare markets of Sudan and South Sudan are forecast to see double -digit growth in local currency terms. The depreciating Sudanese pound results in forecast depreciation in US dollar terms. Planned expansion of pharmaceutical companies and increased funding for pharmaceutical manufacturers are seen as positive developments this quarter. Medicine shortages, high inflation, an increasing exchange rate and civil unrest will be seen as barriers to market growth.

Headline Expenditure Projections

  • Pharmaceuticals: SDG1.75bn (USD374mn) in 2013 to SDG2.07bn (USD338mn) in 2014; +18.0% in local currency terms and -9.6% in US dollar terms. ...

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Power

Sudan Power

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BMI View:   The end of the civil war provides a window of opportunity for investors to exploit the hydrocarbons base and ample sunshine to develop a generation capacity in both Sudan and South Sudan. However, the commercial environment in both is hostile and the political environment remains highly unstable . 

The outlook for Sudan's power sector is moderate. The end of the civil war provides a window of opportunity for the country to exploit its hydrocarbons base and ample sunshine to develop a domestic generation capacity. Power generation in 2014 will increase by 3.0% year-on-year (y-o-y) to 7.2TWh and consumption will grow by 3.5% y-o-y to 5.6TWh. However, the commercial environment is hostile and continues to be dominated by the state-owned National Electricity Corporation, limiting the opportunity for investment. Losses from the system are...

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Telecommunications

Sudan Telecommunications

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BMI View: Our Q 4 14 East Africa report analyses latest industry, regulatory and macroeconomic developments in the telecoms markets of Burundi, Ethiopia, Malawi, Rwanda, South Sudan and Sudan. Analysis of market data provided by telecoms regulators and network operators show that despite fairly low mobile penetration rates, subscriptions growth in most markets continued to slow in the first half of 2014, compared to 2013 and 2012. ARPUs also drop ped further in countries with the most competitive markets and are now firmly in low single digits . The combination of these...

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