Country Report Sudan April 2009

Outlook for 2009-10

• Sudan faces significant challenges including elections in February 2010, tensions in Darfur, and the diplomatic difficulties caused by the International Criminal Court's arrest warrant for the president, Omar al-Bashir.
• The north-south Comprehensive Peace Agreement will be put under growing strain by the elections, the run-up to the planned referendum on southern independence in 2011, and the fiscal crisis caused by falling oil revenue.
• Progress with economic reform will be limited, as the government is preoccupied with the political situation and unwilling to risk losing support from key constituencies. The fiscal deficit will average 2.1% of GDP in 2009-10.
• The world economy will undergo a deep recession in 2009, with global GDP shrinking by 1.8%, recovering only slowly in 2010. Brent crude will average US$45/barrel in 2009-10 and Sudanese crude will trade well below this.
• Global economic pressures and domestic political turmoil will constrain real GDP growth, which will ease to an average 3.8% over the forecast period.
• As commodity prices fall, inflation is projected to ease to an average of 10.1% in 2009-10. The Sudanese pound will depreciate to an average of about SP2.4:US$1 in 2009 and SP2.64:US$1 in 2010.
• The current-account deficit will widen sharply to an average of US$4.6bn (9% of GDP) in 2009-10.

Monthly review

• The president, Omar al-Bashir, has undertaken a series of international trips within the region in defiance of the arrest warrant issued against him by the International Criminal Court.
• The expulsion of 16 NGOs from Darfur has not yet had led to a humanitarian crisis, although the impact will be felt more severely in a few months. Meanwhile, there have been a spate of kidnappings of NGO workers.
• The dates for elections have been set as February 6th-21st 2010, seven months behind schedule. Before then, the contentious issue of constituency boundaries and sizes will need to be resolved.
• Over 500 people have been killed in two separate rounds of fighting over cattle in Jonglei State, between the Murle, the Bor Dinka and Lou Nuer tribes.
• The fiscal crisis in the South another source of instability, as oil revenue transfers in the first quarter were only one-sixth of the 2008 quarterly average, leading to strikes and rioting over non-payment of salaries and pensions.
• The Sudanese pound is weakening, and a differential of 10% has opened up between the official and parallel market rates.

This report covers the following industry codes:
SIC Code: 60;1
NAICS Code: 52;11