Country Report Sudan June 2009

Outlook for 2009-10

• Sudan faces significant challenges, including elections in early 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 peace deal will be put under growing strain by the elections, by the fiscal crisis in the south caused by falling oil revenue and by disputes in the run-up to the referendum on southern independence, due in 2011.
• 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% 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 Blend will average US$62/barrel in 2009-10 and Sudanese crude will trade well below this.
• Global economic pressures and domestic turmoil will constrain real GDP growth to an average of 3% in 2009-10. The current-account deficit will widen sharply to an average of US$3.6bn (7%of GDP) over the forecast period.
• As commodity prices fall, inflation is projected to ease to an average of 7.7% in 2009-10. The Sudanese pound is forecast to depreciate to an average of SP2.39:US$1 in 2009 and SP2.61:US$1 in 2010.

Monthly review

• Lam Akol, a former member of the southern ruling party, the SPLM, has formed a breakaway party to contest the 2010 elections, a move that in part reflects tribal differences in the south.
• The deputy chairman of the National Elections Commission has warned that the February 2010 election may need to be delayed further if the rainy season disrupts voter registration, which has not begun, though he later backtracked.
• A new press law passed by the Sudanese parliament has been shorn of the more draconian clauses contained in its draft form, but has maintained censorship by the security services, which seriously inhibits press freedom.
• Although oil prices have risen in recent months, Sudan's foreign-currency reserves remain low, and the central bank has halved the amount of foreign currency that travellers are permitted to purchase to 1,500.
• An ethanol plant has been opened in Kenana, the centre of Sudan's sugar industry. It intends to produce 65m litres/year in its first year, rising to 200m litres/y after two years.
• The monopoly of the state-owned Gum Arabic Company has been abolished, in the hope of boosting exports of the valuable emulsifier, which had fallen.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;49;10
NAICS Code: 52;22;212