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Published by: Business Monitor International
Published: Feb. 5, 2010 - 62 Pages
Table of Contents
- Executive Summary
- Elections: At Long Last
- Chapter 1: Political Outlook
- Domestic Politics
- A Volatile Year Ahead
- Completion of voter registration for the April 2010 elections and apparent agreement on the criteria for a January
- 2011 secession referendum should not obscure what threatens to be the most volatile year for North-South relations
- since the end of the civil war.
- Table: Political Overview
- Foreign Policy
- External Relations: The Ethiopia Connection
- In enhancing security co-operation with key US ally Ethiopia, Sudan is positioning itself to benefit from Western
- geo-strategic priorities in the Horn of Africa and beyond.
- Chapter 2: Economic Outlook
- Economic Activity
- Growth To Reach 7.0% In 2010
- We have revised up our 2010 real GDP growth forecast for Sudan to 7.0%, from 6.1% previously, to reflect an improved
- outlook for oil prices and a further pick up in risk appetite through Q409.
- ta ble: GDP BY EXPENDITURE
- Balance Of Payments
- C/A To Post 2.9% Of GDP Surplus In 2010
- We now expect Sudan’s current account to post a surplus of 2.9% of GDP in 2010, up from our previous projection
- for a 2.5% deficit, as a result of an improved outlook for oil prices and an expected uptick in oil production.
- Table: CURRENT ACCOUNT
- Monetary Policy
- Inflationary Pressures To Mitigate In 2010
- We expect inflationary pressures in Sudan to mitigate through 2010, with the Sudanese pound expected to
- appreciate gradually against the US dollar, keeping the real cost of imports low.
- Table: MONETARY POLICY
- Regional Outlook
- Growth: V-Shaped Recovery In Store For 2010
- We are forecasting regional real GDP growth in Sub-Saharan Africa (SSA) of 5.1% in 2010, which will mark almost
- a return to trend following 2009’s trough.
- Chapter 3: 10-Year Forecast
- The Sudanese Economy To 2019
- Secession A Key Risk For Long-Term Growth
- There is strong economic growth potential in the non-oil sector, but the uncertainties surrounding devolution and
- secession generate risks for many variables, particularly the fiscal accounts.
- ta ble: SUDAN Long-Term Mac roeconomic Forecasts
- Chapter 4: Special Report
- Political Risk In The Next Decade
- What To Expect In 2010-2019
- Table: Countries Fac ing Major Leadership Succession In 2010-2019
- Table: Countries At Risk Of Major Political Upheaval
- Table: Countries At Risk Of Interstate Conflict Or Heightened Bilate ral Tension
- Table: Count ries Fac ing Secess ion ist Or Autonomy Movements , Insu rgenc ies , Or Civil Wa rs
- Table: Pivotal States
- Chapter 5: Business Environment
- Business Environment Outlook
- Institutions
- TABLE: BMI BUSINESS & OPERATIONAL RISK RATINGS
- TABLE: BMI LEGAL FRAMEWORK RATINGS
- Infrastructure
- TABLE: LABOUR FORCE QUALITY
- Market Orientation
- ta ble: MIDDLE EAST & AFRICA, ANNUAL FDI INFLOWS
- TABLE: BMI TRADE RATINGS
- TABLE: TOP EXPORT DESTINATIONS
- Operational Risk
- Chapter 6: BMI Global Assumptions
- Global Outlook
- 2010 Looking Rosier
- TABLE: GLOBAL AND REGIONAL REAL GDP GROWTH
- TABLE: developed market exchange rates
- Table: Emerging Market Exchange Rates
- TABLE: GLOBAL ASSUMPTIONS
- TABLE: DEVELOPED STATES
- TABLE: EMERGING MARKETS
AbstractThe outlook for the Sudanese economy continues to improve, with the sustained rally in oil pricesand uptick in risk appetite causing us to revise up our estimate for 2010 real GDP growth to 7.0%,from 6.1% previously. With conditions set to continue to improve over the medium term, we expectgrowth to remain strong. That said, although we highlight several recent developments on the politicalfront, we maintain that security concerns surrounding the national elections in April 2010 and areferendum on the succession of South Sudan in 2011 remain key risks to stability going forward.A lthough voter registration for the April 2010 elections has been completed, and an apparent agreementhas been reached on the criteria for the January 2011 secession referendum, we continueto highlight the potential for serious domestic political ructions in Sudan. The lack of clarity on aborder agreement between North and South Sudan poses particularly grave risks, in our view,given the oil-related stakes involved. That said, on the foreign relations front, the outlook is morestable, thanks to enhanced security cooperation with key US ally Ethiopia.
Given our expectations that oil production will increase in 2010, and with our oil and gas teamhaving revised up their oil price forecast, we now expect real GDP to grow by an impressive 7.0%in 2010. With improving risk appetite set to keep foreign direct investment strong over the mediumterm, and oil prices forecast to remain well above 2009 levels through to 2014, we expect growthto remain strong. In addition, rising export revenues on the back of higher oil prices and productionshould see both the current and fiscal accounts flip into surplus in 2010, significantly reducingstructural risks to the Sudanese economy.
T he business environment in Sudan suffers from a weak institutional framework, the perceptionof high corruption and considerable political risk. An arrest warrant issued in early 2009 by theInternational Criminal Court for President Omar al-Bashir will only add to negative investor sentiment.Yet, the government remains pro-business, and encourages foreign interests with liberalinvestment and forex regimes. The authorities have also established Free Trade Zones, whichallow the free movement of capital, as well as tax exemptions and legal benefits.
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