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
BMI View: According to data published by Renault , sales in the Sudanese auto market grew 20.8% in 2014, to 2,900 units. This was in line with our bullish outlook, although the rate of increase was faster than our forecasted growth rate of 15.0%.
It is important to note, however, that vehicle sales still remain below their 2011 and 2012 levels due to the market's collapse in 2013. Over our 2015-2019 forecast period, we expect steady growth in sales of an average of 9.4% annually, which will see sales reach 4,551 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. The political crisis in South Sudan is also greatly limiting autos sales. BMI believes efforts to reach a lasting solution to South Sudan's political and...
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...
Food & Drink
South Sudan Food & Drink
Economic conditions in Sudan remain challenging. The effects of the September 2013 currency devaluation (including soaring inflation), restrained government spending and a weak security environment will see real GDP growth come in at just 2.6% in 2014, according to our estimates. We are slightly more positive on the country's growth prospects in 2015 but expect that real GDP growth - at a projected 3.8% - will remain well below potential.
The improvement will be due, in part, to easing inflationary pressure as the government keeps monetary and fiscal policy tight. This will provide some support to Sudanese consumers, who have seen their incomes eroded by surging inflation over the last 12 months. Increasing domestic oil production will provide a boost to exports as the country strives to fill the gaping hole left by oil-rich South Sudan's 2011 secession.
While we expect conditions to improve over the next 12 months,...
South Sudan Infrastructure
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...
Oil & Gas
South Sudan Oil & Gas
BMI View: Fighting 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.
Pharmaceuticals & Healthcare
South Sudan Pharmaceuticals & Healthcare
BMI View: The already depreciating Sudanese pound will come under further strain should oil prices continue their decline as oil exports account for around 70% of total exports in the country. We are already forecasting short-term negative growth in US dollar terms for the pharmaceutical market which could come under increased scrutiny should prices decline further. Our long-term outlook is more positive due to the government's plans to develop the pharmaceutical sector and expand access to healthcare.
Headline Expenditure Projections
Pharmaceuticals: SDG2.05bn (USD438mn) in 2013 to SDG2.32bn (USD379mn) in 2014; +12.9% in local currency terms and -13.5% in US dollar terms. Forecast revised...
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 5.2% year-on-year (y-o-y) to 7.6TWh and consumption will grow by 5.2% 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...