Country Report Sudan May 2009

Summary

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 peace deal will be put under growing strain by the elections in 2010, disputes in 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 3.6% 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$45/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$5.5bn (11.2% of GDP) over the forecast period.
As commodity prices fall, inflation is projected to ease to an average of 8.8% in 2009-10. The Sudanese pound will depreciate to an average of about SP2.42:US$1 in 2009 and SP2.66:US$1 in 2010.

The presidency has approved the results of the 2008 census. According to leaked reports of the results, the southern population has been estimated at one-fifth of the total, far below the one-third that the SPLM claims.
Talks on Darfur have resumed between the Sudanese government and the JEM rebels. Sudan has made conciliatory moves towards the international community and the humanitarian situation in Darfur has not deteriorated.
Despite an mediation meeting in Qatar on May 3rd between Sudan and Chad, tensions persist after Chadian rebels crossed the border from Darfur into Chad, which threatened to break off diplomatic relations again.
The SPLM has suspended two prominent members for alleged disloyalty. It has also faced political challenges and instability stemming from inter-tribal fighting, which claimed 177 lives in Jonglei in April.
Two international oil firmsONGC Videsh of India and Lundin of Swedenhave withdrawn from exploration in Block 5B, in which they held combined stakes of 48%, judging that the prospects do not warrant further investment.
The Kuwait Fund will provide a US$52m loan to finance the ongoing project to raise the height of the Roseires Dam in eastern Sudan.

Source: Country Report

This report covers the following industry codes:
SIC Code: 48;20
NAICS Code: 517;311