You are on page 1of 42

Research Highlights
Southern Sudan Macroeconomic and Business Environment Overview
June 2011 AfrikaDit Research

TABLE OF CONTENTS
1 2
5

EXECUTIVE SUMMARY BACKGROUND
Economic and Growth Challenges

6
6 7 12 15

MACROECONOMIC SETTING
GDP Structure and Developments Fiscal Developments and External Aid Recent Inflation Developments and Monetary Policy Exchange Rate and External Debt

18
20 22

BUSINESS ENVIRONMENT AND PRIVATE SECTOR OVERVIEW
Challenges facing the private sector Financial Sector Review

26 29 35 37

FUTURE BUSINESS PROSPECTS AND OPPORTUNITIES ANNEX 1: Doing Business in Juba 2011 Highlights ANNEX 2: South Sudan--Major Macroeconomic and Business Indicators (2008-2010) ANNEX 3: Sudan--Selected Macroeconomic Indicators (2007-2010)

Helping bring the hopes and aspirations of the world’s youngest nation to fruition is Afrikadit’s singular mission.

Southern Sudan: Macroeconomic and Business Environment Overview

EXECUTIVE SUMMARY
Background
The Republic of South Sudan became the world’s newest nation on July 9, 2011 as it seceded from Sudan following a historic referendum on self-determination. Political stability in South Sudan has gradually been

established in recent years though occasional setbacks remain a possibility given still unresolved issues with northern Sudan over oil rights, Nile waters, border regions, and external debts. South Sudan will be confronted with the wide array of challenges that face any new country, but the availability of significant oil resources, strong donor support, early signs of foreign investor interest (especially from the region), and good governance can all help to address and gradually overcome these challenges over time.

Macroeconomic setting
South Sudan’s formal economy is dominated by a single resource, namely oil, while a large portion of informal economic activity takes place through subsistence agriculture, livestock rearing, and small scale services. The overall size of the economy is very roughly estimated at $11 billion, which is about one-fourth that

of North Sudan, about one-third that of Kenya (GDP: $32 billion) and Ethiopia (GDP: $31 billion), but notably larger than the regional economies of Rwanda (GDP: $6 billion), Malawi (GDP: $5 billion) or Burundi (GDP: $2 billion). South Sudan’s urban economy has expanded dramatically in recent years—from a very tiny base—particularly in the areas of hospitality services (hotels), building and construction, and finance.

Current Business Environment and Private Sector Overview
Though the formal private sector is still at a very nascent stage, and hampered by severe infrastructure and regulatory constraints, a fast-growing private business community is beginning to emerge. The government

has, in its policy documents, very positively indicated that it intends to leave business and enterprise development to the private sector and is in the process of putting in place relevant laws, regulations, and institutions to make this possible. Partly reflecting such efforts, more than 7,333 businesses are presently registered in South Sudan according to government statistics, including several thousand foreign businesses in areas as varied as telecommunications, air transport, timber, oil production and distribution, farming, mining, building & road construction, importation of goods, road transportation, and hotels. Trade with neighboring countries—involving agricultural products such as maize, wheat, rice, and sugar—is growing fast. The financial industry is also expanding rapidly, with eight banks already in place alongside other financial institutions that include 5 insurance companies, 45 foreign exchange bureaus, and 49 Micro-finance outfits.

Future Business Prospects and Opportunities
Despite tough starting conditions, the Republic of South Sudan has the potential—given it’s very favorable natural resource base—to lay the basis for an open and fast-growing economy with a vibrant and gradually diversifying private sector. Besides business opportunities that will arise on account of the dominant oil sector,

the economy offers huge potential growth in the following notable areas: agriculture (given excellent soil and climatic conditions); forestry, mining; infrastructure; and services such as hotels and banking. Capitalizing on these opportunities will, however, require a macroeconomic framework that is conducive to private sector growth and a business climate that is relatively transparent and predictable. Good political and economic governance on the part of South Sudan’s domestic leadership and external support from outsiders (including through large-scale technical assistance to build capacity in key economic institutions) will also make a critical difference. Assuming these are gradually put in place, there is a very wide and virtually unexploited range of business opportunities in South Sudan whether it is for the emerging pool of local entrepreneurs, for neighboring country investors ready to seize expansion opportunities, or for an even broader source of foreign investors—from the Middle East, Asia, Europe and beyond— that can contribute to and benefit from the transformation of the newly independent country.

1

Southern Sudan: Macroeconomic and Business Environment Overview BACKGROUND The Republic of South Sudan became United Nation’s 193rd member country on July 9th 2011. The Government of South Sudan (GoSS) has adopted a vision for equitable development and poverty eradication. Blue Nile. The last six years under the 2005 peace deal—the Comprehensive Peace Agreement (CPA)—have yielded some institutionalization by South Sudan including growth in decision-making structures for the rich hydrocarbons sector (oil production). These achievements were exceptionally difficult given the rudimentary nature of physical infrastructure (i. drought and flood. such as child and maternal mortality and primary enrolment. roads and communications). as well as the right to collect additional domestic revenue and external assistance. The Agreement assigns a share of almost 50% oil and non-oil revenue that is collected in the South to GoSS. The GoSS already has an oil ministry in place and an embryonic national oil company Nilepet. To this date. South Sudan is in its sixth year of peace following the 2005 Comprehensive Peace Agreement (CPA) that officially ended the 22-year North-South civil war1. and even now. water.. with some local variations. The limited physical infrastructure that existed in South Sudan was devastated during the conflict years. war. political and social structures. but starts from a very low level in terms of institutional capacity and socio-economic development. Physical infrastructure is virtually non-existent. and international humanitarian relief agencies. ending one of Africa’s longest civil wars. this has primarily been based on subsistence agriculture and livestock rearing. and there are structures at central and state levels as well. In rural areas. emerged in 2005 at the signing of the Comprehensive Peace Agreement (CPA). . Key education and health indicators. The CPA addressed some of the long-standing causes of North-South conflict by institutionalizing autonomy for South Sudan and by sharing resources. Ministries and commissions are now operating. as it officially separated from Sudan following a historic referendum on self-determination that took place in January 2011.Bank of South Sudan-BoSS) within the framework of the Central Bank of Sudan (CBoS). though with still limited capacity. the GoSS has made notable accomplishments in setting up basic institutions. only about 15 percent of the adult population is literate.e. In some areas households rely on wage labor. the key remaining issues include: the resource-sharing and border demarcation issues of Southern Kordofan. while market purchases stand at 32%--accounting for the next important food source. These were all created nearly from scratch. mirroring to some extent the lines of responsibility in North Sudan. many of those who don’t cultivate are returnees without immediate access to land. and civil service and proper structures for service delivery is currently being created essentially from scratch. establishing comparative underdevelopment and war affected status as the key criteria for prioritization of public revenue allocations. and the right to have its own banking system (and its regulator-. 1 2 The Comprehensive Peace Agreement (CPA) was signed in January 2005 between the Government of Sudan based in Khartoum and the Sudanese People’s Liberation Movement (SPLM) in the South. including the need to build basic structures such as buildings and staff accommodations. and in others. the Government of South Sudan (GoSS). The official leadership of South Sudan. are among the worst in the world. with no paved roads outside the main urban centers. According to WFP findings (2007) approximately 85% of households in South Sudan cultivate land and around 65% own cattle. and Abyei. Several aspects of the CPA were reportedly scheduled to be implemented over the remaining period of the six-year interim period. faith-based organizations. Up to the mid-1990s. With respect to the economy. electricity. consumption is supplemented by the gathering of wild foods. Some key socio-economic indicators of South Sudan are presented in Chart 1 below. According to the recent USAID engagement agenda for post-conflict economic recovery and growth in South Sudan (2009). Considering the short time frame since its establishment. resulting in the devastation of the region’s economic. The region has suffered from decades of underdevelopment. collectively referred to as the Three Areas. While 53% of food consumed comes from own production. famine. The Wealth Sharing Agreement provided a framework for resource allocation and sustainable decentralization. basic health and social services were provided mainly by a few non-governmental organizations (NGOs). hunting and fishing.

The chief American technical adviser for the census in the South also reportedly said that the census staff could have probably reached 89% of the population. but mainly in the construction of hotels.000 8. and that made the final tally “unacceptable”.26 million. and residential buildings. especially given the highly militarized context in which a large section of the pastoral communities in the South are used to managing their affairs with limited interaction with any form of government. More so. Accordingly. Retail trading including cross-border trade from Uganda and Kenya. the population of South Sudan was estimated at about 8. health care. This is clearly evident in Juba and in other urban and semi-urban areas. the 5th Population and Housing Census was considered by many as a partial population assessment--at best. for instance the GoSS accused that “the Central Bureau of Statistics in Khartoum refused to share the raw census data with Southern Sudan’s Centre for Census.Southern Sudan: Macroeconomic and Business Environment Overview Poverty is pervasive across South Sudan. Though there is very are few official statistics. while many Southern Sudanese remained in exile in neighboring countries. The economy remains highly uneven with significant regional disparities in investment allocations. as well as the basis for repatriation of political power and economic wealth across the country. casual observations and subjective evidence from traders. 1] Source: Southern Sudan Centre for Census. businesspeople.000 2. and some areas were unreachable. Statistic and Evaluation.000 5. the data collected during the census was supposed to be the primary source of information to decide the number and re-allocate the electoral constituencies and to re-demarcate the administrative boundaries. * 3 .000 southerners living in the north of the country.000 7.” The GoSS insisted that the population of Southern Sudan residents in North Sudan were grossly undercounted. According to Darfur Relief and Documentation Centre’s comprehensive assessment in 2010 “The Census was simply an incomplete exercise. The informal sector of the economy has been thriving and growing during the past few years. Construction is booming. In sum.000 6. According to the GoSS’ own estimates. Statistics and Evaluation (SSCCSE -.000 333 586 619 696 721 906 964 973 1. to say the least. However these census results of South Sudan were highly contested by Southern Sudanese officials on a multitude of issues. Internally displaced persons (IDPs) of South Sudan living in the North are estimated at about 4 million. leading to ‘unacceptable results’. in particular the unmatched increase in the numbers of the nomad population in Darfur and exclusion of millions of internally displaced persons (IDPs) and other war-affected communities in areas under the government control.26 million.2010) The 5th Sudan Population and Housing Census. a high point in the implementation of the 2005 Comprehensive Peace Agreement (CPA) was conducted from 22-30th of April 2008. according to GoSS authorities. falling short in meeting universal standards. most notably in the urban and its surrounding areas.104 1. Another challenge relates to the restoration of productive assets and the delivery of basic services. the return of peace has allowed the resumption of normal economic activity. and long-time residents all agree on the observation that the informal and small-scale sector of the economy is flourishing.359 8.” External observers have also suggested that the 5th Population and Housing Census in Sudan had been politicized and contentious. inconsistent and unscientific census to be organized in Sudan’s history”. with about 500. while the census results showed it to be only 21%.000 3. Despite tough starting conditions.Many Southern Sudanese were said to not have been counted “due to bad weather. not in large capital-intensive sectors. Southern Sudan Population by State (in ‘000) Western Bahr El Ghazal Unity Western Equatoria Lakes Northern Bahr El Ghazal Eastern Equatoria Upper Nile Warrap Central Equatoria (Juba)* Jonglei Southern Sudan 0 1. The CPA required that Sudan organize a population census as a key precondition to prepare the ground for the 2010 elections and the 2011 referendum on the right to self-determination. yet the census results showed that their number is little more than 500. Furthermore. however President Salva Kiir suspected figures were being deflated in some regions and inflated in others. controversial. The social and economic impact of the massive current and expected wave of returnees is also a major concern. poor communication and transportation networks. the population of Southern Sudan in Khartoum alone was over 2 million inhabitants.000 [Fig.260* 9. and transportation services has surged over recent years. education and industries. as it was the most polarized. the census results also showed inconsistency in the numbers of the population of Northern Sudan. lodges. He reaffirmed GoSS’ official position that the Southern Sudanese population was in fact estimated to reach one-third of Sudan overall population (close to 15 million).000. The census showed the Southern Sudan population to be 8.000 4. .

National Baseline Household Survey (NBHS) 2009 .52 8 65 49 644 [Chart 1] Central Equatoria State (Juba) 43 2683 (Juba) 4 Source: Southern Sudan Centre for Census .14 0.3 4.97 7 83 49 1.867 44 27 40 72 48 52 129 44 55 57 42 32 77 8.) Population Total Population (in millions) Male Female Average HH Size Rural population (%) Age Group > 18 (%) Education Literacy rate: 15 years and above (%) Literacy rate: between 15-24 (%) Gross enrolment rate for primary school (%) Net enrolment rate for primary school (%) Students per teacher Students per classroom Water.054 17 51 47 54 107 141 1.58 0.km.29 3.Southern Sudan: Macroeconomic and Business Environment Overview KEY SOCIO-ECONOMIC INDICATORS OF SOUTHERN SUDAN (2010) Southern Sudan Area ('000 sq. Health and Sanitation Population with access to safe drinking water (%) Population with access to toilet facility (%) HH with at least one mosquito net (%) Infant mortality rate (per 1000 live births) Under 5 mortality rate (per 1000 live births) Maternal mortality rate (per 100.000 live births) Children fully immunized (%) Household Characteristics Population living in Tukuls (%) Population using charcoal of firewood for cooking (%) HH who own a phone (%) Poverty and Consumption Average per capita consumption per month--Country (SDG) Average per capita consumption per month—Poor (SDG) Population below poverty line (%) Economic and Business Activity HH depending on crop farming or animal husbandry (%) HH who have a bank account (%) Working population that are unpaid family workers (%) Working population that are paid employees (%) Number of registered (formal) business 78 1 53 12 7333 58 N/A 37 21 100 39 51 127 35 44 83 96 15 87 97 28 55 20 60 102 135 2. Statistics and Evaluation (SSCCSE--2010).

achieving rapid. and shared growth is within Southern Sudan’s reach given its immense natural resource potential. A number of multi-lateral donor reviews have indicated some prospect of debt relief (still the subject of negotiation and a rare point of harmony between the North and South). Transitional employment creation is seen as an important short-term requirement to keep the recovery going forward. putting significant pressure on the GoSS to have reportedly draft an effective Oil Law in the coming July—both in terms of its provisions for investors and safeguards around revenue handling. to further the development efforts in the new country. Southern Sudan has a major advantage over most emerging post-conflict governments. The international community is expected to play a particularly an active role given the capacity shortfalls in evidence. Furthermore.Southern Sudan: Macroeconomic and Business Environment Overview Economic and Growth Challenges The growth challenges in Southern Sudan are significant and center on initiating broad-based domestic economic activity in a post-conflict environment2. sustained. uncertainties around the country’s political future as well as local security. Meanwhile. Growth is expected to contribute to all key targets of GoSS’ policy objectives—security and avoidance of conflict. Nowhere in the country is the gap between economic reality and unrealized potential greater than in Southern Sudan. and the well-being of its population. developing an enabling environment to attract private investment is the most important strategic element for encouraging sustainable. but there is no substitute for longer term private investment and enterprise development. In all of this. oil revenues will play an integral role. one of the GOSS’s notable short-term challenges is to select and coordinate outside interests to benefit the South. and impeding longterm investments. inclusive economic growth and poverty reduction in the medium and long term. which is the first for Sudan since the Comprehensive Peace Agreement in 2005 and World Bank re-engagement. According to a mid-term evaluation report of the Joint Donor Team (JDT) for Southern Sudan (2009). 2 According to this core diagnostic Country Economic Memorandum (CEM). making revenue management and transparency particularly key measures. the Government of Southern Sudan (GoSS) with an autonomy over roughly 25 percent of the country’s land area (larger than France) currently contains the majority of the country’s proven and probable oil reserves and the best quality agricultural land. While pursuing security improvement and supporting sound macroeconomic policies. GoSS has just developed a mid-term a growth strategy aimed to stimulate private sector activities and leverage its considerable non-oil resources. What is necessary is a vision and plan for growth and development that builds on Southern Sudan’s strengths and exploits the available opportunities to bring prosperity to all its citizens. and policy inconsistencies at various levels of government including multiple taxes. early action on incentivizing enhanced recovery from existing fields and encouraging exploration for new resources will be critical to maintaining those oil revenues at current levels. These constraints are binding across all sectors and scales of activity. with the effect of restraining productive and marketing activities. particularly those related to transport structures such as interstate and intra-state road networks. providing the core funding of new institutions and the funds necessary for economic diversification. The highest priority constraints to unleashing growth in the South are found to be infrastructure shortcomings. already promising the new state a clean slate in terms of sanctions and debt obligations in order to open the pave the way for private investment. A recent World Bank’s Country Economic Memorandum (CEM) on Sudan (released in 2009) highlighted the importance of planning for non-oil economic growth in the South. development of a long-term growth strategy ought to be given a high priority for the South. To deliver a peace dividend and increase the likelihood of continued peace for the country. higher employment. 5 . with significant resources potentially available for development. With its oil revenues.

the Middle-East and Europe. camels. One can reasonably observe that.about 38% of which is from the North and the remaining 62% is from the South.040 7. In the absence of such figures. suggested that.300 per capita for the South.940 3.760 27.8 billion . The gross investment expenditure component of Sudan‘s GDP is estimated to be $ 13.Southern Sudan: Macroeconomic and Business Environment Overview MACROECONOMIC SETTING GDP Structure and Developments South Sudan’s formal economy is dominated by oil. sesame. Structure of GDP between Northern and Southern Sudan (in millions of USD) North Sudan GDP Private Consumption Gross Investment Export Import 43. the economy can best be described as an agricultural economy.4 billion . Apart from the oil sector. since it is almost entirely derived from oil revenues.104 4. except for exports. sorghum. A recent study by Benjamin Leo (2010) focusing on a systematic examination of Sudan‘s external debt dynamics and the potential eligibility for traditional and multilateral debt relief initiatives. Although GoSS official statistics do not provide sufficient information. Finally.820 [Chart 2] Southern Sudan 10. The private consumption expenditure component of Sudan‘s GDP is estimated to be $ 31. goats and sheep) to Egypt. the export component of Sudan‘s GDP is estimated to be $ 8 billion . It reportedly reportedly exports some animal products (i. Southern Sudan also has a vast forest cover which is rich in diverse tree species which provide rare timber.about 92% of which is for the North and the remaining 8% is for the South. which accounts for limited market activity and low export levels. Benjamin Leo of the Centre for Global Development derived GDP estimates--by using multiple data sources available for 2009. the economic growth of the South has a very narrow base.about 92% of which is in the North and the remaining 8% in the South. medicinal barks or roots.e. fruits.5 billion . This implied a roughly $1. the contribution of the South to Sudan’s economy is quite small. The government consumption expenditure component of Sudan‘s GDP is estimated to be $ 9.7 billion in 2009. As can be seen from Chart 2 & Figure 2 below.361 per capita for the North and $1.about 88% of which is attributed to the North and the remaining 12% to the South.2 billion . and a standard expenditure model. some new regional markets have emerged and cross-border trade has improved since the establishment of the CPA. Alemayehu Geda (2011) highlighted that Khartoum’s GDP share would be around 80 percent.768 1. as well as providing an indicative roadmap on possible scenarios for debt-division and a viable post-secession financial framework. assuming a national GDP (aggregating both the South and North) of approximately $54. and plant oil.696 3. gum.. Currently. Based upon estimates by Leo (2010) and regardless of the final status of Abyei.632 12. the import component of Sudan‘s GDP is estimated to be $ 8.960 680 6 .348 per capita for the whole Sudan— with $1. the structure of Northern and Southern Sudan’s current macroeconomic states vary quite significantly. especially international trade data crossing borders out of the South. While. and peanuts which can play productive roles for the overall economy. wood fuel. there are no official figures for the regional GDP decomposition Northern or Southern Sudan.about 85% of which is attributed to the North and the remaining 15% to the South. Southern Sudan produces agricultural crops such as cotton.

But the latest achievement in inaugurating the first major paved road project since the signing of the CPA.2%). as well as the right to collect additional domestic revenue and external assistance. including personal income tax (1. recent discovery and the resultant trade in oil has boosted the economy greatly. The GoSS share percentage has been determined by the actual production on a monthly basis. while VAT and customs duties account for less than 1% of GoSS revenue(See Chart 3 & Figure 3 below). The Wealth Sharing Agreement under the CPA provides a framework for resource allocation and sustainable decentralization. telecommunications and energy remain limited and poorly maintained. 7 . river transport. In 2010. The construction. major towns and markets. 2] 92% 88% 80% 92% North 38% South 20% 12% 8% 8% Gross Investment Export Import One of the main challenges and constraints to GDP growth in the coming years related to the lack of physical infrastructure. which the 192km Juba-Nimule Road. the total GoSS budget of around $2 billion assumed nearly 98% to come from oil revenue. is expected to provide a vital link from Juba to Uganda— currently the primary regional trade partner of Southern Sudan.Southern Sudan: Macroeconomic and Business Environment Overview Share of GDP between Northern and Southern Sudan 100% 90% 80% 70% 62% 60% 50% 40% 30% 20% 10% 0% GDP Private Consumption [Fig. Fiscal Developments and External Aid Under the Comprehensive Peace Agreement (CPA). According to this agreement. but the existing infrastructure network of roads and bridges. Southern Sudan shares the incomes from oil—its dominant fiscal resource—with the North. rehabilitation and maintenance of strategically important roads remain vital to enhance the accessibility of state capitals. Although agricultural products formed the backbone of the Sudanese economy for many years. Road access has improved since the signing of the CPA. while the sheer remaining 2% was assumed to come from non-oil revenue. assigning a share of oil to the South. Juba was and still is the only place with a bridge across the White Nile in all of South Sudan. The country now has surplus incomes resulting from oil revenues. 50% of the net oil revenue derived from oil producing wells in South Sudan will go to Government of South Sudan (GoSS) and the remaining 50% to the National Government and Northern Sudan States.

8 23. Statistics and Evaluation (SSCCSE--2010) At the state level the key sources of tax and non tax revenue are Personal Income Tax. Capital Gains Tax and Stamp Duties. Business Profits Tax applied to large corporations. in 2010 Central Equatoria financed 38% of its expenditure from own source revenues whereas the proportion is negligible in Jonglei and Lakes states.e.8% 1. With the establishment of some 14 ministers at the end of 2006. fees on contracts and the sale of various commodities. VAT and other National Revenue Other GOSS Revenues TOTAL Source: Southern Sudan Centre for Census. for instance. The second feature is the level of urbanization.Southern Sudan: Macroeconomic and Business Environment Overview Estimated GOSS Revenue Sources (2010) Source [Chart 3] Revenue (in millions SDG) 4. Customs duties.7 Oil Personal Income Tax Customs.913.957. Rental Income Tax. Central Equatoria has three well developed urban centers: Juba (the federal capital).1 4. There are also a number of fees and charges on trading and professional licenses. Nevertheless. In contrast. state service tax on hotels. Statistics and Evaluation (SSCCSE--2010) Estimated GOSS Revenue Sources 2010 [Fig.3 12.6% of the state’s own revenues (i. The variation is explained by the maturity of the tax administration system with Central Equatoria being a well established state which was earlier a Regional Government while the administrative structures are under-developed in Lakes and Jonglei. Yei and Kajo Keji.502. Value added tax (VAT). 3] Oil 97. been a recurring difficulty. the share of tax revenue to the overall Southern Sudan economy is quite negligible (currently standing at less than 2 percent).401.2% 0.6% Personal Income Tax Customs.0 19.4% 0.7 54. Jonglei State is predominantly a rural region.The World Bank’s regional Public Sector reform unit reported that. Excessive wage bills in the government ministries have.8 Revenue (millions of USD) 1.. expenditure management and deficit control has been a challenge since the signing of the CPA. VAT and other National Revenue Other GOSS Revenues Source: Southern Sudan Centre for Census. Despite significant oil-related revenues.5 8.2 1. Non tax revenue accounts for 20. Traffic charges and Housing being major sources). while the urban population in Lakes State is minimal with very limited market-places and urban facilities.0 28. The proportion of expenditure financed from own source revenue generation varies significantly across states. the magnitude of public service (inclusive 8 .

000 as deemed by the development partners GoSS. Statistics and Evaluation (SSCCSE--2010) [Fig. and crowded out development spending.5 323. Statistics and Evaluation (SSCCSE--2010) [Chart 4] Expenditure (Millions SDG) 157.9 217.Southern Sudan: Macroeconomic and Business Environment Overview of the states and counties) ranged from 3 to 8 times the optimum civil service size of 40.7 4. 4] 9 .9 524. GOSS Expenditure Estimates by Sector Sector Accountability Economic Functions Education Health Infrastructure Natural Resources Public Administration Rule of Law Security Social and Humanitarian Block State Transfers TOTAL Source: Southern Sudan Centre for Census. unclassified personnel and ‘ghost’ workers.4 487.7 % Share 4% 4% 7% 4% 13% 5% 13% 11% 26% 2% 12% 100% Share of GOSS Expenditure by Sector (2010) 2% 25% Accountability Economic Functions Education 12% 11% 4% 4% 13% 4% 5% 13% 7% Health Infrastracture Natural Resources Public Administration Rule of Law Security Social and Humanitarian Block State Transfers Source: Southern Sudan Centre for Census.5 164. while salary expenditure for other agencies were less than a million SDGs.8 98. Environment and Finance were particularly enormous.9 1.482. resulting to skewed distribution of expenditures across function.145. the excessiveness in the wage bill in the GoSS included a substantial proportion of recent recruits.1 571.5 601.5 189. the wage bills of SPLA and the ministries of Interiors. A World Bank Public Sector Review for Sudan (2007) noted that. It further pointed out that.

000) (2.000 7.000. state transfers and cash advances to GoSS institutions and units to meet their basic operating costs. Sound public expenditure management is the most important fiscal challenge still reportedly faced by the GoSS. In 2009. The fiscal mismanagement in 2006 put to test some of the newly established fiscal infrastructure – systems and procedures in budget management. led GoSS to temporarily suspend payment of salaries. which was less than 55% of the monthly salary bill. especially on the expenditure controls. GoSS oil revenues dropped by almost 40% during 2009.000 5.000. Historical GoSS Fiscal Outturns 2006-2009 (in SDG) 8.000.000.000. crucial reforms were undertaken since early 2007 to improve the various aspects of public fiscal management.000. namely salaries. local entrepreneurs supplying GoSS had run into trouble since GoSS has large amounts arrears outstanding.Southern Sudan: Macroeconomic and Business Environment Overview Financing of deficits has largely relied on drawing down accumulated oil reserve funds. GoSS could only meet its most essential expenditures.000.000. recent fiscal challenges have also been due to external factors emanating from the global financial crisis.000. 5] Fiscal Balance GoSS Salaries Operating Expenditure Capital Expenditure Gross Expenditure 2005 2006 2007 2008 2009 Gross Revenue 10 .000 3. An important component of instigating fiscal discipline was the design and implementation of a comprehensive payroll and payment system for both the civil service and the army.000. the gap between current revenue and total spending (excluding anticipated grants from multilateral agencies) was three 3 times higher than the planned budget.000. The recent collapse in oil prices has shown how vulnerable Southern Sudan’s fiscal situation is and its dependence on oil price developments. linked to several factors.000 (1.000) Source: Statistical Yearbook for Southern Sudan 2010 (SSCCSE) [Fig. The cash deficit of $429 million was financed through significant draw-downs on accumulated reserves from the Oil Revenue Stabilization Account (ORSA).000. All other expenditures were severely constrained.000 2.000. payments.000. and could have even been higher once suspense expenditures were cleared. Besides domestic problems of public financial management. Second.000 1. mostly on huge infrastructure contracts. budget execution. As a result. reducing the fiscal room for public spending. the funds available to GoSS diminished sharply in 2009 following the global financial crises (including its impact on oil prices). South Sudan faced a severe fiscal strain. According to the World Bank Public Expenditure review (2007) the large number of expenditure items that were unmatched up until November 2006 reflecting the poor technical capacity of budget implementers to impose ex ante control in the approval of expenditure and to provide a complete systemic structure of recording.000 4. for example.000. First. financial and accounting. This meant that in the early months of 2009. the GoSS is by far the largest employer in South Sudan.000. The dramatically lower oil revenue inflow oil revenue receipts from the Government of National Unity (GoNU) in January 2009 of only SDG 84 million. Given early fiscal challenges encountered.000.000 6.000. In 2006.000.000.

USAID and others. the Capacity Building Trust Fund (CBTF). the Basic Services Fund (BSF). Security Others 11 . The seven governance functions fall under Executive Leadership. a recent donor meeting (held in Brussels) in September 2010 aimed to provide assistance under the National Development Plan (2011-2013) and 19 core governance functions for South Sudan. with a well established system of thematic groups. Rule of Law. Health (Including HIV/AIDS) Education Water and Sanitation Source: Multi-Donor Trust Fund for Southern Sudan (MDTF-SS) Factsheet (2011) Accountability State and Peace Building Private Sector Development Agriculture and Rural.. A Joint Donor Team (JDT) is currently working with other donors to help GoSS address the fiscal crisis. As of March 2011. The scale of donor financing is on the order of several hundred million US dollars per annum. Southern Sudan Multi-Donor Trust Funds (MDTF--SS) Allocation to Key Sectors 160 140 150 [Fig. donors have also expressed the need for mutual accountability urging the GoSS to improve transparency and management of public funds. and post conflict reconstruction. Donor coordination in South Sudan has developed to be effective. Development partners in Juba include UNDP. The five pooled funding mechanisms include the Multi-Donor Trust Fund (MDTF). JDT’s projections indicate cumulative disbursements (donor funds) of about $415 million. more than $400 million was disbursed--out of the total $548 million paid to the Multi-Donor Trust Fund for Southern Sudan (MDTF-SS) by its 14 donors and the World Bank. a 10% reduction in block transfers to oil producing States and the waiving of GoSS counterpart contributions to the MultiDonor Trust Fund. The Juba Compact contained a number of austerity measures to help GoSS weather the fiscal crisis. The main objective was to lay the groundwork for a short to long term program aimed at supporting the peace process. settlement of external debt and arrears. The Team is also a member of the Task Force established in 2008 to come up with a Compact between the GoSS and the donor partners. 6] USD Millions 120 100 80 60 40 20 0 52 50 60 47 41 37 23 19 16 Social Development. of which seven have been prioritized. the level of engagement by the international community in South Sudan has increased. including various donor conferences and meetings. World Bank. However. The Juba Compact was formulated as a mutual accountability results framework.Southern Sudan: Macroeconomic and Business Environment Overview The fiscal situation in South Sudan is notable for its heavy dependence on donor assistance. the Sudan Recovery Fund (SRF) and the Common Humanitarian Fund (CHF). DfID. Total disbursement in 2010 was $188 million. Southern Sudan is said to have benefited from significant funding through five pooled donor aid mechanisms amounting to $180 million in 2010. Following the signing of the CPA. and Natural Resources. These include freezing the signing of new contracts.. Public Administration. with the GoSS and donors pledging to monitor progress in implementation of the reforms. Law Enforcement. Security. The Task Force also oversees the implementation of the Multi-Donor Trust Fund (MDTF). Looking ahead. fight corruption and engage in peace building and reconciliation efforts. They are also targeting total Fund disbursements of about $450 million by end-June 2011and between $475 million and $500 million by end-2011 (see Figure 6 below). By the end of the first quarter of 2011. almost as much as the previous four years combined. bilateral donors through the Joint Donor Team.

5 181.82 35.83 0.60 8. given the decline observed in the month-on-month inflation rate.84 0. while.96 -3.3 percent (between May 2010 and May 2011).6 138.39 0. Juba Consumer Price Index--General Inflation (May 2010-May 2011) Month May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Price Index 137.5 [Chart 5] Year-on-Year Inflation 1. According to the Southern Sudan Centre for Census. the price of wheat flour more than doubled during the same period from 12 .57 Month-on-Month Inflation -0.48 -2.8 140.6 percent (see Chart 5 and Figure 7 below).79 22.17 0. inflation in consumer prices is driven primarily by developments in food prices.4 134.46 12.0 185.2 percent between May 2010 and May 2011.73 33. Statistics and Evaluation (SSCCSE) Since food makes up 67% of the basket of goods in Juba Southern Sudan. however.86 1.07 1. the annual Juba Headline Consumer Price Index (CPI) at end May 2011 amounted to 35.6 139.8 percent in May 2011 while on a year-on-year basis it was found to be 44. 7] Year on Year Inflation-FOOD COMPONENTS Year on Year Inflation-OVERALL Source: Southern Sudan Centre for Census.0 135.8 percent in May 2011. which has fallen from its peak level of 12.10 5.6 153. According to the regular monthly survey of the Southern Sudan Centre for Census and Evaluation (SSCCSE).08 -0.69 32.02 3.1 percent in January to just 0.27 -1.09 -3.0 171.78 12.Southern Sudan: Macroeconomic and Business Environment Overview Recent Inflation Developments and Monetary Policy South Sudan is currently a high-inflation economy.81 1.4 137. Statistics and Evaluation’s (SSCCSE) latest Consumer Price Inflation Press Release for the city of Juba.53 0.16 -1.22 33. The pace of future inflation seems to be moderating.1 186. the price of bread and cereals increased by 67. Monthly inflation in Food & Non-Alcoholic beverages increased by 0.5 183.77 Source: Southern Sudan Centre for Census. Statistics and Evaluation(SSCCSE) Juba Year-on-Year Inflation (%) 50 40 30 20 10 0 -10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 [Fig.

5 4.05 68.7 0.00 7.00 -5.2 Aug10 85.46 3.00 0.9 4. water.5 1.67 6.1 13.electricity.74 0.4 5.00 -0.9 & Tobacco Housing.00 0.17 3.90 Jan11 11.4 3.02 18.60 11. Transport Recreation & Culture Restaurants and Hotels Miscellaneous goods & services ALL ITEMS May10 -3.5 1.1 6.82 Mar11 -0.26 18.0 19. weighted according to how much of the item households consume.3 3.42 -8.2 [Chart 6] Apr11 123.88 17.3 3.02 8.0 23.7 20.48 -2.87 0.5 1.3 4.7 12.3 10.51 percent respectively in May 2011.00 15.00 0.90 1.3 4.00 7.60 -7.40 0.3 3.86 1.81 0. Statistics and Evaluation (SSCCSE) Monthly Inflation (May 2010-May 2011) Monthly Inflation Food & non alcoholic beverages Alcoholic beverages & Tobacco Housing.25 0.72 61.5 11.9 11.04 38.78 6.7 12.00 0.93 0. food items made up 67% of the basket of goods.10 5.00 0.00 13.33 0.Southern Sudan: Macroeconomic and Business Environment Overview 3.00 3.7 12.3 19.5 1.57 10.3 3.2 Feb11 119.7 7.00 16.2 Sep10 85.2 May11 124.00 0.74 -0.81 1.9 2.41 0.00 -5.1 percent followed by Alcoholic beverages & Tobacco and Transport prices with a monthly inflation rate of 4.60 8.0 135.49 8.0 4.53 0.4 22.79 4.2 Jul10 84.48 [Chart 7] Apr11 3.5 1.85 -5. Consumer Price Index3 (May 2010-May 2011) Consumer Price Index Food & non alcoholic beverages Base (Apr-07) 61.5 SDG/kg to 8.6 4.19 38.0 Oct10 89.00 0.86 -0.0 20.7 12.19 10.3 3.69 -34.41 11.8 8. (See Charts 6-8 below).8 100.0 185.8 140.gas etc Furnishing & household equipments.07 -3.71 0.7 12.4 0.60 Jul-10 -1.35 -8.56 Nov10 -1.2 6.30 Sep10 -0.76 -2.2 Jan11 114.5 8.2 6.39 0.6 138.3 6.84 Jun10 0.0 137.87 -0.5 1.9 3.35 0.5 4. electricity & gas inflation drop to just -5.42 0.83 0.79 Feb11 4.7 12.2 4.9 percent in May 2011.5 Source: Southern Sudan Centre for Census.86 Aug10 0.00 -1.9 20.0 6.02 3.72 -0.36 5.74 May11 0. And the initial weights for each of the items were generated in a welfare-monitoring survey conducted in Juba.3 3.4 134.60 0.30 0.3 3.84 0.6 139.76 0.9 1.00 7.1 3.51 0.9 6.85 and 4.4 4.01 7.3 2.0 171.0 May10 86.4 7.0 4.3 21.55 -7.77 Source: Southern Sudan Centre for Census.98 0.1 186.18 -1.2 Nov10 88.1 Jun10 86.0 SDG/kg-.4 1.61 3.46 3.8 4. In April 2011.00 0.0 4.00 0.63 Dec10 15.0 6.1 1.00 Oct10 5.00 14.98 4. One a year-on-year basis the prices of Furnishing & Household equipments recorded the highest inflation at close to 97 percent.74 0. looking at monthly inflation by the non-food components of the CPI.9 3.25 -0.7 20.5 1.1 11. water.3 6.21 0.1 11.gas etc Furnishing & household equipments Transport Recreation & Culture Restaurants and Hotels Miscellaneous goods & services ALL ITEMS 16.3 3.22 3.17 0.35 9.3 4.9 6. Statistics and Evaluation (SSCCE) 3 The consumer price index contains 85 items.27 -1.1 11.78 12. Furnishing & Household equipments show the highest inflation rate of 17.9 6.6 153.3 4.5 4.22 9.00 5.3 3. Similarly.5 1.00 -2.11 4.90 0.3 6.19 -1. Housing.3 3.5 1.03 -2.3 12.27 0.0 4.00 1.54 of these are food items or nonalcoholic beverages.4 11.2 Dec10 102.9 Mar11 119.0 5.12 25.2 7. water.0 6.all together accounting for the exponential rise observed on the year-on-year inflation in the prices of Food & Non-alcoholic beverages.6 4.electricity.5 Alcoholic beverages 3.1 3.0 10.0 22. 13 .11 7.5 183.00 0.4 137.6 22.5 181.4 19.7 19.

34 Jun10 -0. water.87 0.43 -1.28 71.48 9.34 -4.35 2.17 7.90 16.70 7.02 8. 14 .87 9.00 Jul-10 -0.5% between April 2010 and April 2011.46 12.74 -7.91 7.37 11.49 -6.72 11.68 12.42 4.13 11.98 -7.67 13.19 2. the near 13 percent inflation recorded for South Sudan (on year-on-year basis) was roughly 6 percent points higher than the average year-on-year inflation registered during the same period (according to the IMF at just 7.25 19.01 11.49 1.16 -7.29 13.20 5.36 0.88 8.22 -5.89 1. low development in infrastructures improvements along the major trade routes.80 28.23 0.26 15.16 -1.68 11.50 16.22 33.92 7. Hence most of the recent inflation observed in Juba is attributed to the rise in prices of food and non-alcoholic beverages--which if it continues at current rates will progress to a moderate 9.51 -7.37 Nov10 -6.22 Feb11 39.05 11.79 8.08 3.00 8. one can note that in contrast to conditions in 2009 when inflation in Southern Sudan was markedly lower than the average Sub-Sahara African norm.69 -1.40 -3.08 -0.88 25. FOOD INFLATION (May 2010-May 2011) Year-on-Year Overall Inflation Food & Non-alcoholic beverages Inflation 35.21 81.82 35.98 Mar11 36.35 Aug10 -0.11 [Chart 9] Month-on-month Annualized rate of monthly increase Source: Southern Sudan Centre for Census.84 12.00 23.77 0.15 1. Assuming inflation outturns in Juba can serve as a rough proxy for overall developments in consumer prices of Southern Sudan (to complement for the lack of country-wide inflation surveys). Because food makes up such a large percentage of the basket of consumer goods and Southern Sudan is heavily dependent on imported food.87 14.31 32.53 -6.62 14.08 9.91 5.74 -4. Statistics and Evaluation (SSCCSE) Imported items also seem to be a major driver of overall inflation.75 14.52 -3. in 2010.07 1.72 49.72 6.88 0.96 -3. signifying the recent toll imported inflation of food products has had on the general CPI for Southern Sudan (see Figure 8 below).84 -1.39 17.19 96.14 [Chart 8] Apr11 37.20 64.07 -3.09 -3.60 18.33 0.93 9.81 0.00 17.62 10.13 Jan11 30.90 11.2 percent).37 -5. Other important factors are the recent depreciation of exchange rate between Southern Sudan and its major trading partners.99 -17.73 33.93 2. World food inflation is currently high—FAO’s World food price index increased by 36.39 0.84 -1. world/neighboring food and fuel prices are likely to impact strongly on movements in consumer prices.08 9. Statistics and Evaluation (SSCCSE) Compared to the region.Southern Sudan: Macroeconomic and Business Environment Overview Annual Inflation (May 2010-May 2011) Annual Inflation Food & non alcoholic beverages Alcoholic beverages & Tobacco Housing.40 -1.79 22.38 May11 44.1 percent annualized inflation rate (see Chart 9 below).83 Dec10 19.57 Source: Southern Sudan Centre for Census.gas etc Furnishing & household equipments Transport Recreation & Culture Restaurants and Hotels Miscellaneous goods & services ALL ITEMS May10 2.69 32.39 1.76 14.02 11.79 Oct10 -2.26 16.11 1.00 6.68 -6.88 25.75 33.02 8.05 10.85 Sep10 -1.24 78. political uncertainty which can cause traders and wholesalers to reduce supply and price pressures caused by inflow of returnees.76 4.39 47.electricity. OVERALL Vs. inflation in Southern Sudan is considerably higher than in neighboring countries.33 26.57 44.

inflation developments in South Sudan will necessarily be linked to credit conditions set by the CBoS in Khartoum and by a combination of local. an official exchange rate (which is managed and determined by the Central Bank of Sudan) and freely floating parallel market. and import developments in the Southern Sudanese economy.00 10.00 2009 2010 [Fig. followed by a gradual nominal depreciation between 2008 and 2010 See (Figure 9 below).00 2. without an independent monetary policy capability.4 The depreciation after 2008 has been linked to declines in foreign direct investment and net private transfers. and to about $300 million by March 2009. Looking at the exchange rate movements in Sudan over recent years. increase of supply by focusing on promoting non-oil exports. has in principle a mandate to overlook the implementation of monetary policy--with important responsibility for controlling inflation. which is sensitive to speculations and rumors about the economic and the political situation in the country.00 0. BoSS. By the end of 2008. Southern Sudan Vs SSA 14. South Sudan’s exchange rate developments have thus been no different than those of North Sudan. 4 The major Exchange Rate policy objectives outlined the Central Bank of Sudan for the year 2010 included achieving durable stability of the exchange rate by enhancing its flexibility within the framework of a managed flexible exchange rate regime and considering the shift from pegging of the national currency exchange rate to a single foreign currency to pegging to a basket of currencies. net official international reserves fell below $1 billion (equivalent to 6 weeks of import cover). 15 . as a unique branch of the Central Bank of Sudan (CBoS). rationalization of importation.00 8. Exchange Rate and External Debt South Sudan does not yet have an independent exchange rate and is still using the Sudanese Guinea (SDG) as its unit of currency. 8] Sothern Sudan Source: Southern Sudan Centre for Census.Southern Sudan: Macroeconomic and Business Environment Overview Inflation. The salient feature of the Sudan foreign exchange market is the existence of an active dual market for foreign exchange. In practice. the CBoS highlighted focus on continuation in the rationalization of demand for foreign exchange. operating side by side.00 12.00 4. Moreover. does not (yet) have the full independence of a regular central bank that can control monetary policy through the instruments of a conventional banking system. Indeed. Statistics and Evaluation (SSCCSE) and IMF The Bank of South Sudan (BoSS). supply-side. however.00 SSA 6. The IMF reported foreign direct investment fell by $500 million and private transfers by $800 million in 2008. there was a nominal appreciation between 2005 and 2008. as well as working toward the encouragement of direct foreign investment flows and building of the reserves.

According to recent IMF reports. 9] 2. following the depreciation. As gathered from IMF reports. and an adequate banking supervisory framework. which would likely serve South Sudan best in view of its relative simplicity and its ability to fiscal discipline and economic stability. Pressure on the exchange rate eased somewhat. However. in a bid to close the gap with the parallel market rate.7 billion in net present value (NPV) terms – up from approximately $15 billion in 2000. At the outset. 16 . China.44 2. and India.Southern Sudan: Macroeconomic and Business Environment Overview Average Exchange Rate. A flexible exchange rate regime for a new currency is also a possibility. the central bank introduced a daily premium for purchases of the guinea—roughly equivalent to the amount of the subsequent depreciation —on top of the official exchange rate. The authorities also introduced new measures to curb the demand for foreign currency.3 2.61 2. including an increase in custom duties on various consumption goods. 426 percent of annual export receipts. Sudan‘s external debt is approximately 64 percent of the country‘s gross domestic product. The choice of a suitable new exchange rate and new exchange rate regime is something that the authorities will soon confront and that has been a subject of recent IMF missions. excess liquidity and uncertainty in the run-up to the referendum have intensified pressure on the exchange rate. Gross international reserves continued to decline. but this would require a more challenging institutional framework for the conduct of monetary and exchange rate policy. This has allowed the Central Bank of Sudan (CBOS) to limit its intervention and rebuild its international reserves. Sudan‘s 5 A currency board arrangement involves a fixed exchange rate link to a selected dominant currency (say USD or EURO) and the issuance of new domestic currency only in response to and on the basis of foreign exchange inflows. and an increase from 5 to 10 percent of the development tax rate.09 SDP/USD 2 1. Several exchange rate options can be considered following South Sudan’s formal independence. prompting the CBoS to undertake in November 2010 a depreciation of the Sudanese guinea (SDG) by about 19 percent. an arrangement similar to that in Djibouti. South Sudan does not appear to have external debt that it has independently contracted on its own.5 However. With respect to debt. IMF advice appears to be for the government of Southern Sudan to issue and manage its own currency in the near future.02 2. the official and parallel rates have continued to converge. as a result of shortfalls in external financing as well as the Sudan authorities’ exchange rate intervention policies in the run-up to the November depreciation. the GoSS appears ready to continue using the Sudanese pound for 6-9 months after the expiration of the CPA in July. One possibility is a currency board arrangement (CBA).58 2. a currency board arrangement would require sound public finances. Since then. absence of lending to the government.17 [Fig.5 1 2003 2004 2005 2006 2007 2008 2009 Source: IMF Staff Reports (2009 & 2010) According to the latest IMF staff review in April 2011. the preparations for the introduction of a new currency may be prolonged. 2003-2009 3 2.5 2. and 423 percent of government revenues. The majority of the recent increase was due to the further accumulation of arrears to Paris Club and non-Paris Club creditors as well as sizable new loans from Arab creditors. instead of opting for an outright depreciation. which were applied on some imports. but nonetheless shares its portion of the overall external debt accumulated by Sudan in the past several decades. In this respect. Sudan’s external debt stood at roughly $34.

this only reflects what Sudan paid to creditors – not the total amount actually due. refuses to take on any of the debt. this would equal roughly 188 percent of annual exports. They also consider that the South should shoulder part of the debt. both North and South Sudan will need to soon put in place a roadmap towards some sort of debt relief in the near future. While the two parties expressed different views regarding debt apportionment. then it may look forward to substantial debt relief. according to the ultimate beneficiary principle.Southern Sudan: Macroeconomic and Business Environment Overview external debt ratios reportedly exceed those deemed sustainable for-poor performing countries under the World Bank/IMF Debt Sustainability Framework (DSF) as well as the enhanced HIPC Initiative threshold6. such as a 150 percent debt-to-exports ratio. According to a recent study on Sudan’s debt sustainability. on the other hand. the debt should be allocated geographically. The South. Such debt relief would first involve “traditional” debt relief from Paris Club creditors (usually involving a two-thirds reduction of total bilateral debt). However.e. the application of a traditional Paris Club treatment (i. A Sudan Debt Technical Working Group (TWG) tasked with addressing some of these issues has met in recent months. The respective DSF thresholds are utilized to gauge the probability that a respective country will experience debt distress over time. Sudan‘s outstanding external debt obligations would decline from $34. Sudan‘s external debt burden will remain unsustainable over the medium to long-term. this profound indebtedness situation is expected to pose a huge challenge for the post-independence Southern Sudan 6 17 . but pointed that in case of apportionment. Instead. assuming that all bilateral and private creditors participate in a 67 percent Net Present Value (NPV) reduction of eligible pre-cut off debt. if South Sudan receives a debt treatment received by HIPC countries (under IMF and World Bank programs). and then a broader reduction by to Sudan’s multilateral creditors to reach certain “safe” thresholds. the HIPC Initiative threshold largely is used to determine the extent of debt relief required (i. In relative terms.. That said. In 2009..e. However. Sudan has failed to fully repay the majority of its debt obligations.7 billion to approximately $19. from the perspective of the Khartoum authorities.3 billion in NPV terms. Sudan‘s new debt-service totaled only 4 percent of exports. In contrast. In the absence traditional debt relief. Given the huge debt burden. In contrast. the Sudanese government has mobilized scarce public resources to repay new obligations due for selected creditors – largely those that have continued to provide new loan financing. debt can only be solved in the context of a comprehensive agreement on all outstanding CPA-related issues. Although the issue of debt apportionment is still outstanding. One important issue that needs to be addressed in this regard is the issue of debt apportionment between North and South Sudan. not necessarily determine sustainability). Naples terms) would greatly reduce Sudan‘s external debt ratios.

widely engaged in diverse economic activities like water purification and bottling. micro. Waste Management and other services Construction Wholesale and Retail Trade.037 97 52 46 10 31 361 22 211 7. Moreover. A fair number of these companies are reportedly part of one of the business conglomerates of the Southern Sudanese “tycoons” who have successfully targeted the most promising segments in the last few years (a prominent example being the ALOK group of companies.7% 0. Steam and Air-conditioning Supply Manufacturing Water Supply.9% 100.9% 0. high-gain ventures. Service activities Arts. are in trading and service activities.1% 1. Repair of motor vehicles and motorcycle Transportation and Storage Accommodation and Food Service Information and Communication Financial and Insurance Activities Professional. Nonetheless. trade and commercial regulation.8% 0. there are a number of local private entrepreneurs currently involved in economic activities across Central and Western Equatoria. Yet. Electricity.7 As would be expected given the stage of economic development. The rural areas are virtually neglected of any entrepreneurial activity above household-level micro-enterprises.116 45 1. building and road construction and hotel management). Mining and Quarrying. air transportation.7% 0. meaning a risk venture with a low initial investment and a very short repayment period.1% 1.3% 0. Most enterprises.Southern Sudan: Macroeconomic and Business Environment Overview BUSINESS ENVIRONMENT AND PRIVATE SECTOR OVERVIEW A major and positive theme outlined in the GoSS Mid-Term Growth Strategy (2009) is that business and enterprise development in Southern Sudan should be left to the private sector. Entertainment and Recreation Other Service Activities TOTAL [Chart 10] Number 10 199 7 89 5.6% 14. Often. the first few years after the signing of the peace agreement has shown that this work is still in its very early stages.3% 2. stone crushing. the local added value is generally low. Sewage.2% 69. Scientific and Technical Activities Administrative and support service activities Education Human Health and Social. and “sunk capital” investment is rarely seen according to this report. Gas.4% 4. typically less than one year.0% Sudan (2010) Source: Southern Sudan Centre for Census. A large portion of private enterprises currently active in Southern Sudan tend to have business owners whom are Kenyan. the high level of both political risk and day-to-day insecurity will mean that investors are calculating very high margins leading to short payback periods.1% 0. Registered Businesses in Southern Sudan by Type of Activity in 2010 Type of Business Activity Agriculture.333 % Share 0. The report also notes that some investments in Southern Sudan are made by “rogue investors” – individuals with a taste for high-risk. It is reported that a limited number of European (non-oil) investors are active. GoSS is increasingly taking over this role and is making efforts to create a conducive and transparent regulatory framework for the private sector.6% 0. and primarily geared towards setting up government structures and housing as well as providing services for a large (but temporary) expatriate community (accommodation. these are regarded as “hit and run” investments. Obviously. largely fragmented. logistics and restoration). a few to implement one-off projects. The formal private sector is still at a very nascent stage in Southern Sudan. mostly in service delivery in the fringe of international assistance programs. irrespective of their origin. The interim constitution of Southern Sudan grants authority to GoSS concerning matters relating to commerce. the formal private sector is noted to be mostly in and around the capital. Ugandan. Juba. . but few number indigenous entrepreneurs have developed sizable enterprises.1% 2. Statistics and Evaluation (SSCCSE)--Statistical Yearbook for Southern 7 18 The Peace Security and Development Network country report in its Public-Private Cooperation in Fragile Sates (2009) describes the private sector as undeveloped. or North Sudanese in origin. Forestry and Fishing. Some returning Southern Sudanese have started to set up businesses. since experiences have shown that it is the private sector that is a key driver of investment and economic growth.and small-scale enterprises and informal retailers are large in numbers.

it is reported that. Moreover out of the total. Communications. as well as businesses ventures in public infrastructure services including provision of water supply. Insurance. A large number of international investors come from the region (i. Some notable international players in Southern Sudan include the Kenya Commercial Bank.683) business entities are presently registered in the capital Juba--with 84 percent of them engaged in retail & wholesale trade and restaurants. Given Southern Sudan’s promising resource endowments. Uganda. Heineken and Ascom Petroleum. Equatoria Timber Company. The international private sector operates in diverse sectors and activities including telecommunications. promising business ventures involving agriculture. banking. KK Security. North Sudanese and Ethiopian). Vivacell. Electric. MTN. building & road construction. forestry.1 percent share. Spring Petroleum. ROKO Construction. Jetlink. mining and quarrying. sewage and waste management currently seem to contribute insignificantly to the overall private sector activities currently available in Southern Sudan.Southern Sudan: Macroeconomic and Business Environment Overview A total of 7. Kenya. followed by accommodation and food services with 14. SAB Miller.Southern Sudan Business Registration Database 19 . at present. Gas. mining. Davinci Lodge. SDV Transami. Total Ltd. Intra Africa. the majority of the business interests in Southern Sudan are observed to be engaged in wholesale and retail trade--accounting for nearly 70 percent of all registered business. timber. Regional Business Ownership by Type in Southern Sudan Nationality Agriculture.333 businesses are presently registered in the 10 state capitals of Southern Sudan. air transport. hydrocarbon (oil) production & distribution. with each currently commanding a mere share of less than one percent. And Sanitary Services 3 3 Wholesale Trade 2 35 1 5 43 Retail Trade 2 9 1 521 4 53 590 Finance. Air Uganda. Afex Hotels. according to government statistics (see Chart 10 above). fishing. Delbit Petroleum. JIT Supermarket. a third (or 2.e. ZAIN. And Real Estate 2 2 Services [Chart 11] Public Administration 1 1 6 1 4 13 Ethiopia Kenya South Africa Sudan Uganda Southern Sudan Total 1 1 2 9 36 3 47 97 Source: Government of Southern Sudan Ministry of Commerce and Industry-. Forestry. hotels and lodges. importation of goods. Ethiopian Airlines. Civicon Construction. road transportation. According to data obtained from the Southern Sudan Centre Census Statistics Evaluation (SSCCSE). East African Airlines. And Fishing 1 1 Construction Transportation.

Although regional export and import data are not publicly available in Southern Sudan. Juba was and still is the only place with a bridge across the White Nile in all of South Sudan. Together. while the export from Southern Sudan being virtually none. A recent World Bank field survey (2009) suggests Uganda to be the leading exporter to Southern Sudan putting the value to an even higher estimated amount of $1. In all other study sites. the existing infrastructure network of roads and bridges.Southern Sudan: Macroeconomic and Business Environment Overview Share in Volume of Annual Imports to Southern Sudan (January-December 2010) 35% 30% 25% 20% 15% 10% 5% 0% 0% 2% 0% 1% 1% 1% Textile [Fig. major towns and markets. maize flour. and GoSS together with donors have reportedly initiated emergency repairs of the main roads. motor vehicle and motor cycle sales and repair. however. biscuits. the Ugandans are only 20 percent the rest being Sudanese. telecommunications and energy remain limited and poorly maintained. While input and product markets are undeveloped. onion. studies suggest the majority of trade has been localized—focused predominantly with neighboring countries like Uganda and Kenya— and occurring when security conditions allow. Others trade foodstuffs. the sale of (top-up) call time for mobile phones. soda. Sudan Customs Station (Nimule Customs Station--Southern Sudan) Non-oil trading is conducted primarily by the private sector across Southern Sudan. rice. A rapid food assessment survey (2008) conducted in the main physical locations of food commodity markets in Southern Sudan also revealed that the source of supply for major urban markets in Southern Sudan is North Sudan and Uganda. Challenges facing the private sector The lack of physical infrastructure (particularly all-weather roads) in Southern Sudan is generally cited as one of the major constraining factors for private sector development. This information suggests the existence of significant cross-border trade between North and South Sudan—suggestive of a post-secession cooperative framework and significant trade growth potential. mirror trade data shows that Kenya and Uganda may have an estimated export to South Sudan of about $75 and $55 million in 2006 composed predominantly of manufactured goods.e. where many activities are also carried out by SMEs from surrounding countries. According to Alemayehu Geda (2011). rice. The construction. river transport. Road access has improved since the signing of the CPA. maize flour. wheat flour and sorghum sold in the four commodity markets surveyed. But still. 53 % of the traders in Juba were Ugandan while the rest being Sudanese. salt. A large majority of local entrepreneurs are working in the informal sector. Malakal and Wau) 20 Machinary Footwear Various Soap Fuel Salt Cereals . hardware from China. A major area of local entrepreneur preoccupation is the retail sector (sugar. According to a country report by Peace Security and Development Network focusing on Public-Private Cooperation (2009). inter-regional trade flows exist for agriculture products and livestock marketing at present. building materials). repair and maintenance of electronic equipment (i. North Sudan and Uganda account for the bulk of sugar. public transports (mini-buses and bodas) and river transportation. livestock. money transfers and exchange. 10] 32% 19% 16% 16% 3% 4% 1% 0% 3% Sugar Cooking Oil Electronics Beverages Building Materials Wheat/ Flour Medicine Source: Ministry of Interior. beer. telecommunication services. carpentry.2 billion per annum. only three towns (Juba. rehabilitation and maintenance of strategically important roads remain vital to enhance the accessibility of state capitals. computers). According to this survey.

law enforcement capacity and supporting services. accountable. according to USAID Agenda for engagement in Post-conflict economic recovery and growth in Southern Sudan (2009).e.Southern Sudan: Macroeconomic and Business Environment Overview have partial access to diesel stations for electricity. In addition. State-owned lands. one notable example is concerns the new Southern Sudan Land Bill. and consistent manner. Access to land is a particularly limiting factor for private sector development. and Trade & Industrial Licenses regulations have all recently been endorsed by GoSS. It is also important to note that provisions requiring foreign investors with 21 .e. it is possible to take over the lease from another lessee or obtain a lease for a new plot directly from the government. and registration. Limited liability and Partnership Acts. agriculture. functioning institutions. and establishing trade facilitation systems for better connectivity to regional countries and the Northern Corridor to the Mombasa Port in Kenya. Key laws intended to promote a viable investment climate such as the Investment Act. adequate legislation. The purpose of land use (i. the implementation process of the already enacted laws is rather slow and confused as a result of the sheer magnitude of the laws and regulations as well as the lack of capacity within the institutions responsible for their implementation. A well functioning framework includes a coherent land policy. Southern Sudan is critically dependent on Kenya and Uganda for its access to the sea and to trade facilitation services. Although foreign investors cannot buy land. The existing national grid only covers six states and the northern parts of the Blue Nile. Currently. the possibility has been opened for securing land on long-term leases following a Land Bill that came into force in February 2009. Contract Act. In Southern Sudan this industry would help to provide that part of the country with competitive services and the two routes to the sea through Port Sudan and Mombasa. This poses challenges of rapidly evolving services in transport while simultaneously establishing institutions for the development of the sector.. ensuing transport and trade facilitation links between the north and the south of the country. for investment in agriculture and natural resources. Moreover. industry etc. In all of the above areas. Communal areas. some progress is being registered. Any investor wanting to make use of land in either urban or rural areas should be aware of old land rights (i. Although major steps have been taken in order to develop appropriate legal and regulatory frameworks for Southern Sudan (drawing from national laws).e. With respect to policies. The development of a comprehensive Investment Bill is slowly progressing. in Southern Sudan there is a potential for establishing private sector inland container depots (ICDs) and a logistics industry with external collaboration. Some recent industry-specific studies have pointed out that. Because Southern Sudan is effectively a land-locked region. the Agency Act. it also faces the unique challenges of developing a logistics industry that is well integrated with neighboring countries. the lack of functionality pertaining to land administration both at the central and local levels is a key part of the problem. one of the key challenges facing business and investors in Southern Sudan identified (as in most post-conflict economies) is the uncertainty and unpredictability of the laws and regulations governing doing business. The key challenge is ensuring the commitment and ability of the government to implement business laws and regulations in a transparent. they have the rights granted to them to lease it..) both play key roles in the rights involved. Land access issues and resulting disputes are not effectively managed and handled. But still. investment. Some steps have also recently been undertaken to improve the regulatory framework for investors in Southern Sudan. Southern Sudan has particularly poor access to electricity services.) and the origin of the land (i. A reliable. etc. sustainable and transparent functioning land registration system is also a critical enabling factor for private sector investment. the legal environment is still to be clarified in critical areas such as land. The physical recovery program in Southern Sudan is (out of necessity) tuned to basic infrastructure needs and includes building an internal (rural) road network. land rights from before the war in 1983) and the rights of returnees to that land (including the right to make use of the land for pasture). Southern Sudan still lacks an overall framework for land issues and the security of land tenure is still very weak. although implementation is still a challenge.

or control business organizations in any sector of the economy of Southern Sudan as domestic business organizations. training. the working responsibilities of BoSS include: serving as a treasurer to the government and management of foreign exchange. At least five regional commercial airlines serve Juba alone. and performing supervisory duties to ensure commercial banks and other financial institutions behave responsibly. assuming a role in promoting economic growth and development of the whole country. particularly the promotion of monetary stability and sound financial system. emphasizing that the Government of Southern Sudan is making strides to improve the business environment for small and medium enterprises (SMEs). a little behind Khartoum (154th). This state of affairs will likely change only following formal independence as and when South Sudan opts for its own domestic central bank and domestic currency. As there was an urgent need for banking facilities in Southern Sudan during the interim period-. is a unique branch of the Central Bank of Sudan (CBoS) responsible for administrating the conventional banking window and exercises a number of functions to achieve macroeconomic objectives. There are yet no commercial courts in Southern Sudan. and land ownership that have GoSS business registry since it started in 2006. Southern Sudan’s macroeconomic situation is linked closely to and dependent on Sudan’s overall macroeconomic developments and Khartoum’s monetary and credit policies. The overall judiciary remains weak. assuming an economic advisory role to the public sector. It attempted to fill the data gap in the semi-autonomous region. maintaining stable exchange rate. particularly from the perspective of SMEs. But significant investments in staffing. with that of monetary policy making. Based on the aggregate ranking.when the Islamic banks withdrew from the Southern Sudan. acting as an agent of the government in collecting revenue. In May 2011. while variations were observed on a topic by topic basis. commercial banks have been established and basic infrastructure is being rehabilitated. operations. Juba was ranked 159th on the ease of doing business. or other monetary policy instruments. sound banking system and issuance of currency note. 22 . The report notes that more than 9. the International Financial Corporation’s (IFC) released its first-ever city profile in Doing Business in Juba 2011. Neither does the BoSS have control over the exchange rate policy or the management of international reserves. The Investment Promotion Act (2009) prohibits discrimination in that foreign Investors may own. In practice. the GOSS does not have control over the growth of money supply and credit. the Bank of Southern Sudan (BoSS) was established as a ‘branch’ of the Central Bank of Sudan (CBoS). in which the city of Juba was ranked 159th out of 183 economies on the ease of doing business. The Wealth Sharing Agreement (2004) of the CPA recognized “a dual banking in Sudan during the interim period. with a network of four branches (spread across three Southern Sudan states). however. the GoSS has taken steps to recently bring all customs operations under the administration of the national customs department. the change in monetary reserve requirements. The primary responsibility and mandate of BoSS was to contribute in ensuring price stability. To a large extent. An Islamic banking system shall operate in the Muslims dominant Northern Sudan and Conventional banking system in Southern Sudan”. Measuring business regulations and their enforcement in Juba.Southern Sudan: Macroeconomic and Business Environment Overview Southern Sudanese partners to pay start-up funds have been removed recently.000 businesses have signed up with the government business registry since it started in 2006. Financial Sector Review The Bank of Southern Sudan (BoSS). Doing Business in Juba 2011 was the first assessment of business regulations in Southern Sudan capital. which is expected to become Africa’s newest nation in July. acting as the bankers’ bank in many respects including provision of clearing house services and controller of credit as well as lender of the last resort to the banking sector when faced with short term liquidity problems. the report cited improvements in eight laws on business registration. In addition. For the most part. (See Annex 1). and equipping customs administration in the South will still be required to ensure that customs operations are integrated throughout the country. and another five cargo airlines have made it easier to transport goods to the region. and in most cases it is difficult to discover where one can turn to when one becomes involved in commercial disputes. Also. The Government of Southern Sudan does not have full autonomy when it comes to macroeconomic policies— in particular.

Southern Sudan: Macroeconomic and Business Environment Overview The commercial banking industry in South Sudan consists of eight banks with a combined network of forty-five branches. a recent by the BoSS notes that. In terms of the composition of the sector. The financial system in Southern Sudan is underdeveloped due to over 2 decades of war. despite entering this market some few years ago. Its Ethiopian counterpart. Ranked the largest bank in Kenya by assets. They facilitate transfer of funds (remittances) from one area to another through telegraphic transfers. while it is reportedly looking at expansion plans to have around 30 branches across the postindependence state of Southern Sudan by 2015 and 100. KCB has 14 branches in Southern Sudan. Currently. provide overdraft and documentary credits to customers who wish to cover temporary liquidity shortages and import goods respectively. the Kenya Commercial Bank (KBC) spearheads the commercial banking industry in Southern Sudan. up from around 10.000 customers in the next three years.000 most recently. and render consultancy services to their customers through financial and economic appraisal of investment projects. Besides these basic functions. the commercial banks in Southern Sudan perform a number of support services of specialized nature to their customers. “…commercial banking in Southern Sudan is a domination of the branches of foreign commercial banks pursuing business without regard to non-financial objectives of contributing in development”. KCB (Sudan) Ltd. still operates out of a single branch in the capital. 11] Nile Commercial Bank (NCB) 2% 9% 27% 7% Ivory Bank Equity Bank 15% 31% Commercial Bank of Ethiopia (CBE) 7% Agricultural Bank of Sudan (ABS) Mountains Trade and Development Bank (MTDB) Kenya Commercial Bank (KCB) Buffalo Commercial Bank (BCB) Source: Bank of South Sudan (2010) 8 According to IFC’s Doing in Juba 2011.8 Commercial banks provide a variety of services to the Southern Sudan economy through mobilization of deposits and allocation to promising investment projects that can spur growth. almost a year after the signing of the CPA. access to credit is very limited as business firms consider this as the second biggest obstacle in doing business (following physical infrastructure constraints). It formed a subsidiary company. The Distribution of Commercial Banks across Southern Sudan States NAME OF BANK Nile Commercial Bank (NCB) Kenya Commercial Bank (KCB) Buffalo Commercial Bank (BCB) Ivory Bank Equity Bank Commercial Bank of Ethiopia (CBE) Agricultural Bank of Sudan (ABS) Mountains Trade and Development Bank MTDB Total Source: Bank of South Sudan (2010) EQUATORIA 5 9 2 2 3 1 1 1 24 BHAR ELGHAZAL 4 2 1 2 0 0 1 0 10 UPPER NILE 3 3 0 3 0 0 2 0 11 12 14 3 7 3 1 4 1 45 [Chart 12] TOTAL Market Share of Commercial Banks in Southern Sudan 2% [Fig. Most lending is short term (3 to 6 months) and interest spreads are high. Commercial Bank of Ethiopia (CBE). Microfinance institutions cover approximately 5% of clients in Juba and less than 1% of the potential market across Southern Sudan. Only 10% of loans are extended to small and medium-size enterprises. 23 .

The CBoS through its annual credit policy directs commercial banks to allocate a certain proportion of (12%) from their total lending portfolio to Micro-finance projects. the Microfinance Institutions (MFIs) in Southern Sudan are a collection of eight civil society organizations. protection of depositors’ rights and safety of banks. The BoSS also plans to institute a financial services company entrusted with the task of issuing and selling government securities. Each of these banks would be expected to focus its lending on those specialized areas or domains. the microfinance industry in Southern Sudan is presently seen to be undeserving popular financing needs and estimated to be reaching a mere 1-3% of the potential market. BOSS encourages the establishment of foreign banks branches and claims to be pursuing a policy of paying share capitals in multiple (three) installments. The objective of microfinance institutions is to make financial resources available to the poorest echelons of the South Sudanese people. and of recent educational and living expenses of Southern Sudanese nationals abroad.Southern Sudan: Macroeconomic and Business Environment Overview As part of several reforms anticipated for Southern Sudan’s Banking and Financial Institutions (postindependence). Its basic aim would be to strengthen public confidence in banking system. and a network of forty-nine Micro-finance institutions spread across Southern Sudan. The Forex bureaus are established according to a Foreign Exchange Dealing Act (1999) in Southern Sudan with a sizable number of branches outside Juba. the Bank of South Sudan. Whereas. This would be used as a monetary policy tool as well as a source of financing the government’s budgetary deficits. encourages the establishment of national commercial banks and international banks linking South Sudan to global financial market. The BoSS also sees the need for the eventual establishment of a Bank Deposit Insurance Corporation to complement regulatory and supervisory role of the Central Bank of South Sudan. investment banks. Finally. the insurance business consists of five insurance companies. there is a dedicated MFI Unit in the BoSS with a mission to promote Micro-finance in Southern Sudan--through mentoring and supervising MFI providers and coordinate the government (BoSS) & non-government technical resources (including looking after the application of the wholesale credit from the Unit to the micro-finance providers). mostly women. self-sufficient businesses in Southern Sudan without collaterals. to start or expand very small. Non-Bank Financial Institutions in Southern Sudan consist of forty-five Foreign exchange bureaus. five Insurance companies. Their major objective is to widen the supply of foreign exchange for small users such as travel and medical treatment abroad. But still. While. which are under control of the Bank of Southern Sudan as they practice partial banking activities in collecting risk premiums from the public and invest them. non-governmental and government organizations. saving and mortgage banks. with a network of forty-nine units across Southern Sudan (see Chart 13 and Figure 12 below). These foreign exchange bureaus are involved in selling and purchases of foreign exchange. In addition. The Distribution of Microfinance Institutions (MFIs) across Southern Sudan States NAME OF MFI Sudan Microfinance Institution (SUMI) BRAC Financial Sudan Limited (FSL) Rural Finance Initiative (RUFI) Enterprise Microfinance Institution (EMI) Women& Youth Empowerment (WAYE) Christian Agenda For Development (CAFD) JASCO TOTAL Source: Bank of South Sudan (2010) EQUATORIA 4 16 2 2 2 2 28 BHAR ELGHAZAL 1 7 3 1 1 13 UPPER NILE 1 6 1 8 6 29 6 2 1 2 1 2 49 [Chart 13] TOTAL 24 . BoSS also promotes the establishment of specialized banks such as agricultural banks. industrial banks.

12] Sudan Microfinance Institution (SUMI) BRAC Financial Sudan Limited (FSL) Rural Finance Initiative (RUFI) 12% 59% Enterprise Microfinance Institution (EMI) Women & Youth Empowerment (WAYE) Christian Agenda For Development (CAFD) JASCO Source: Bank of South Sudan (2010) 25 .Southern Sudan: Macroeconomic and Business Environment Overview Market Share of Microfinance Institutions (MFIs) in Southern Sudan 2% 4% 2% 4% 4% 13% [Fig.

much of which is largely unutilized or under-utilized (only 31% of households have put all their available land into cultivation according to the WFP). or more than a quarter of the total land area in Southern Sudan. According to Global Insight’s recent assessment. and good governance can all help to address and gradually overcome these challenges over time. In contrast to this potential. in particular with respect to food security and employment. Currently.Southern Sudan: Macroeconomic and Business Environment Overview FUTURE BUSINESS PROSPECTS AND OPPORTUNITIES South Sudan will be confronted with the wide array of challenges facing any new country. early signs of foreign investor interest (especially from the region). is very much suited for medium and large scale commercial agriculture as it is has some of the most fertile soils in Sudan. The 2007 FAO report on the State of the World’s Forests estimated that natural forests and woodlands cover a total of 192. Southern Sudan has large areas of both timber and non-timber forests. Southern Sudan also has potential in related more value adding industries including leather processing and sugar cane development (including ethanol production). but the availability of significant oil resources. Besides having the majority of Sudan‘s currently known proven and probable oil reserves.). According to investment opportunities identified by GoSS ministries. fertilizers. most of the present agricultural production in the South is at subsistence level. Thus.. groundnuts. and a recent private-public cooperation country report on fragile states. with some 80% of Sudan’s oil production—equivalent to 380. dairy products. the region has the near-term economic resources to assist its state formation and development. endowed with 8 months of rain and two planting seasons. meat processing. cotton. Agricultural produce here include: sorghum. in that there is a growing market which is currently only being served by poor quality imports with very high prices. the Southern Sudan economy can effectively diversify into the following main areas: • Agriculture and livestock: This sector is of major importance to the Southern Sudanese economy. sesame. the very favorable natural resource base of South Sudan has the potential to lay the basis for an open and fast-growing economy with a vibrant and gradually diversifying private sector. with an estimated amount of nearly 8 million cattle in Southern Sudan. A further advantage mentioned is that in the case of poultry meat there is already a well-established distribution system in place. for example. and commercialization currently only takes place on a very small scale. There is a great deal of potential for international investment in cattle rearing. about 50 percent is prime irrigable agricultural land. the Republic of South Sudan has a major advantage over most emerging post-conflict governments. despite tough starting conditions. livestock plays a significant role. industry & agriculture. even under the challenging (and costly) business climate conditions prevailing in Southern Sudan. that only around 2% of the total available land in South Sudan is currently fully cultivated. . technical expertise to set up and run a commercial marketing company. The Ministry of Agriculture has indicated that the Green Belt. The development of agriculture can also be driven by cross-border trade in key foodstuffs that could be produced in South Sudan for export markets in the East Africa Community. fishery and cattle feed development9. Private sector opportunities are plentiful and often virtually untouched many areas.000 b/d—based in Southern Sudan. and fruit. strong donor support. Direct inputs that could be provided by the private sector are knowledge about and the provision of new agricultural techniques and varieties. Developing production is then simply an issue of backward integration. the cost price difference is so large that a competitive and import-substituting industry can be developed.000 square km. Indeed. commercial utilization is limited to teak (from plantation forests) and mahogany (natural). shea-nuts. It is reported. and given the government’s commitment to produce enough food to be self-sufficient. With increased access to oil revenues and its immense untapped agricultural prospect. Setting up agricultural service supply companies would present a market-oriented solution for attaining this objective. While. Increased productivity in the agricultural sector requires an increased level of mechanization and improved inputs (seeds. Southern Sudan chamber of commerce. vegetables. etc. reaching from the Central to the Eastern Equatorial state. maize. Out of close to 82 million hectares of land surface in Southern Sudan. South Sudan also has some of the best quality agricultural land. Gum Arabic is also considered to be a potentially interesting • Forestry: 9 26 An often mentioned agro-investment opportunity in Southern Sudan is that of poultry development.

its export infrastructure is in the north10.e. considered the largest floodplain in Africa. This implies that North and South Sudan must co-operate. 27 . some of which still have large numbers of wildlife. The cost of transport. With the exception of Juba--all other urban. montane forest. the present costs of transport in Southern Sudan are high even for Africa. Hospitality is currently in a transitional stage. the key short-term challenge of the new state of South Sudan’s lack of oil infrastructure. which typically has high transport costs relative to other parts of the world.. meat and fruit canning. power and energy. While most of Sudan’s oil resources are in the south of the country. none of these parks are currently operational. including old factories across Southern Sudan engaged in sugar processing. The demand for power is largely unmet despite existing potential to generate over 500 MW and hence a great potential for private investment. The production of mineral water is already taking place while the production of soft beverages and beer (by SAB Miller) is being developed in Juba by foreign investors. and lowland tropical forest. Some recent industry-specific studies have pointed out that. as well as habitat for much of Southern Sudan’s wildlife. Nevertheless. The same is true for commercial railway schemes. However. oils. of which seven are major and nine are small. • Tourism & Hospitality: • Manufacturing: Mainly small-scale manufacturing is taking place in Southern Sudan. The flood region includes the Sudd. Electricity also necessitates all-round investment since there is no national electricity grid to supply consumers from a central location. Road transportation is largely undeveloped mainly due to poor roads and has left huge gaps which present a good potential for private firms. Nonetheless. including carpentry and metal processing. Potential fields of medium and large scale manufacturing investments identified by the Southern Sudan chamber include in developing existing defunct agro-processing industries that presently in need to be revitalized. the demand for both the domestic and productive use of water is expected to increase rapidly as peace takes full effect in Southern Sudan. but renewed efforts should be considered to minimize reliance on a neighboring country for export is fraught with uncertainties and changing political conditions. The cities are expanding rapidly and the demand for construction materials coupled with high transportation costs has led to high prices of residential units. Currently. weaving and bags). and as people are returning and looking for means to start and restart agricultural production.Southern Sudan: Macroeconomic and Business Environment Overview area for commercialization. low rainfall woodland savannah. the South’s imminent reliance on the North could render the former vulnerable to the latter’s control of export infrastructure. interstate and regional highways have a dirtsurfaced roads. thus undermining the private sector to do business in South Sudan. Southern Sudan contains six ecological zones: semi-desert. poles and firewood. which makes this a very ‘lucrative’ sector (i. • Transportation: Southern Sudan still lacks an established public transportation systems. As for construction. However. According to GoSS’ own review. brewery. telecommunication. The sector is currently dominated by private operators. and more luxury hotels and regulated game spotting could be developed as a longer-term investment. water and sanitation services. • Infrastructure: The restoration of roads and buildings has been ongoing in Southern Sudan since the signing of the CPA. high rainfall woodland savannah. Due to the absence of a national grid. real estate development is widely viewed as a promising venture given that only an estimated 12 percent of housing demand is currently met across Southern Sudan). inter-urban. 10 As the troubled gas transit relationship between Russia and Ukraine has demonstrated. food. rural areas will have to be catered for by various types of small-scale energy systems. Southern Sudan also has extensive and diverse forest and woodland resources that provide timber. agro-industrial complex. there are no commercialized irrigation schemes. Water resources in Southern Sudan still remain underdeveloped and underutilized and much of the sparsely existing infrastructure does not function efficiently. flood region. Mobile safari operations could also be a starting point in the short-term. in Southern Sudan there is a potential for establishing private sector inland container depots (ICDs) and a logistics industry with external collaboration. medicines. There are a total of 16 ports along the White Nile in Southern Sudan. the shortage of finance and technology in manufacturing. limits growth in this sector. at least in the short to medium term. Southern Sudan has seven National Parks and 12 Game Reserves. there is ongoing work to build more government buildings and hotels. coupled with high transportation and procurement costs (input costs). Air transportation is still largely undeveloped although regional operators are presently pouring into the market. raise the cost of production and service delivery.

Assuming these are gradually put in place. can provide a new financial starting point for both countries in their relations with external providers of credit. public financial management. and to manage external inflows more broadly. Europe and beyond—that can contribute to and benefit from the transformation of a newly independent country. Asia. As noted above. Hence. a new currency. there is a very wide and virtually unexploited range of business opportunities in South Sudan whether it is for the emerging pool of local entrepreneurs. The benefits of such debt relief will flow to the overall economy and to the private sector that will face a more stable and less risky macroeconomic environment. however. South Sudan is fortunate to have several strong assets on which to build a fast-growing economy with a vibrant and gradually diversifying private sector. bilateral lenders and the like. once debt apportionment issues are settled. at low interest rates). or for an even broader source of foreign investors—from the Middle East. specific policies could be adopted to hold down inflation.. capitalizing on these opportunities will require a macroeconomic framework that is conducive to private sector growth. this provides greater flexibility and policy tools to the government and could allow for a more growth-conducive macroeconomic environment to be put in place. and debt relief—can each potentially play an important role in deepening private sector growth: • New Currency: The establishment of a new and stable currency could allow the South Sudan to manage its economy in line with its own domestic conditions and circumstances. To access such funding. even with many demanding tests that lie ahead for the newly independent country. If properly administered. to provide a competitive boost to exports. it will be difficult for both countries to successfully access the wide range of funding that is available from multilateral banks. debt relief will be indispensable. Such funding will. macroeconomic developments—most notably. • IMF Entry: South Sudan’s likely and expected entry into the IMF can help in securing assistance needed for a wide range of technical macroeconomic challenges (inflation control. export credit agencies. • Debt Relief: In summary.Southern Sudan: Macroeconomic and Business Environment Overview Beyond sector-specific opportunities. 28 . monetary policy. IMF entry.e. however. especially that provided on concessional terms (i. for neighboring country investors ready to seize expansion opportunities. Without debt relief. Good political and economic governance on the part of South Sudan’s domestic leadership and external support from outsiders (including through large-scale technical assistance to build capacity in key economic institutions) will also make a critical difference. be very important especially for a newly independent country that faces large financing needs to meet urgent social and infrastructural requirements. Debt relief for both North and South Sudan. and banking supervision) and can also facilitate—via a formal Fund program—wider access to donor funding in these and other areas.

Juba would rank 123rd of 183 countries on the ease of starting ahead of Kenya (125th). social security and pension administrations. costing 192% of income per capita. enforcing contracts and closing a business A.2% of income per capita. and costs 250. On the other hand. but behind Rwanda (9th) and South Africa (75th). trading across borders. Doing Business in Juba 2011 investigated the regulations that enhance business activity and those that constrain it.ANNEXES ANNEX I Doing Business in Juba 2011 Highlights Southern Sudan: Macroeconomic and Business Environment Overview Nine indicators were included in the aggregate ranking on the ease of doing business that was comparable with the 183 economies covered in the study. registering property. dealing with construction permits. and registration with local authorities.936% of income per capita. Uganda (133rd). Starting a Business Rwanda Egypt UAE South Africa Nigeria Sudan (Khartoum) Juba Kenya Uganda Guinea-Bissau SS Average 9 19 45 75 109 120 123 125 140 183 126 B. In Khartoum. at a cost of 5. Rwanda (82nd). getting credit. The indicators in Doing Business in Juba 2011 are also comparable with 346 cities in 38 economies benchmarked in other sub-national Doing Business studies. Juba would rank 49th out of 183 economies on the ease of dealing with construction permits. paying taxes. The number of procedures shows how many separate interactions an entrepreneur are required to have with third parties. tax registration. the same process is more complex--19 procedures and takes 9 times longer. 29 . Juba is behind Kenya (35th) but ahead of South Africa (52nd). Juba requires fewer steps than the global average (18). A construction company wishing to build a warehouse in Juba spends 30 days on 10 procedures to obtain building approvals and utility connections. time and cost for a small to medium. Business entry requirements go beyond simple incorporation to include the registration of a business name. Compared globally. 15 days. The process in Juba is faster but more costly than it is in Khartoum. Such indicators can be telling.Starting a Business: measures the procedures. registration with statistical. where an entrepreneur spends 36 days and 33.6% of income per capita to start a business. and Egypt (154th). protecting investors. It benchmarked the ease of starting a business.size enterprise to start up and operate formally. time and cost for a small to medium-size business to obtain all the necessary approvals to build a simple commercial warehouse and connect it to basic utility services. Starting a limited liability company in Juba takes 11 procedures. No minimum capital is required by law. it is much cheaper. With just 10 required procedures.Dealing with Construction Permits: measures the procedures.

if necessary. The other measures the scope and accessibility of credit information available through public credit registries and private credit bureaus and provides information on coverage. The transaction is considered complete when it is opposable to third parties and the purchasing company can use the property as collateral for new loans or. Juba ranks 124th of 183 economies on the ease of registering property--ahead of Uganda (150th) and Kenya (129th) but behind Rwanda (41st) and Egypt (93rd). the global best performer. One describes how well collateral and bankruptcy laws facilitate lending. takes less time (9 days) and is much cheaper (3% of property value). The same process in Khartoum requires fewer procedures (6). property can be registered in 2 procedures and 2 days at no cost. Compared globally. sell it to another business. The financial 30 . To register a property in Juba.7% of property value. Registering Property SS Average Timor-Leste Nigeria Senegal Uganda Kenya Juba Egypt South Africa Rwanda Sudan (Khartoum) 0 40 41 40 80 120 160 200 93 91 129 124 150 166 121 183 179 D. The 2 types of institutions are measured by 2 sets of indicators. In Saudi Arabia. an entrepreneur must spend 18 days on 7 procedures that cost 14. Businesses cite it as the second biggest obstacle after electricity constraints.ANNEXES Dealing with Construction Permits 200 160 Southern Sudan: Macroeconomic and Business Environment Overview 183 154 133 140 117 82 168 120 80 49 52 40 0 29 35 UAE Kenya Juba South Africa Rwanda Uganda Sudan Egypt (Khartoum) Nigeria Eritrea SS Average C. Access to credit is very limited in Juba.Getting Credit: measures 2 types of institutions and systems that can facilitate access to finance and improve its allocation.Registering Property: records the full sequence of procedures necessary for a business to purchase a property from another business and transfer the title to the buyer’s name.

Nigeria (59th). According to a recent journal of financial economics. Khartoum ranks 138th. the presence of legal and regulatory protection for investors explains up to 73% of the decision to invest. the global top performer for this indicator. New Zealand. Microfinance institutions cover approximately 5% of clients in Juba and less than 1% of the potential market in Southern Sudan. With a score of 2. Only 10% of loans are extended to small and medium-size enterprises. Egypt (74th) and Kenya (93rd). Protecting Investors 200 160 120 80 40 10 0 29 61 74 120 94 154 133 113 173 183 Sudan (Khartoum) Afghanistan Nigeria Kenya South Africa Rwanda Uganda Egypt UAE Juba SS Average 31 . both governments and businesses have an interest in strengthening investor protection. A higher ranking on the strength of investor protection index indicates that an economy’s regulations offer stronger investor protection against self dealing in the areas measured. such as dilution of share value or insider trading.7 on the strength of investor protection index. Within the region. the liability of company directors for self dealing and the ability of shareholders to sue directors for misconduct. they tend to invest in fewer companies in which they take majority stakes. scores 9. and Egypt (72nd). If investors fear potential expropriation by a company’s officers. The indicator does not measure all aspects related to the protection of minority investors. Juba ranks 173rd out of the 183 economies.7 out of 10 on the overall strength of investor protection index.ANNEXES Southern Sudan: Macroeconomic and Business Environment Overview system in Southern Sudan is underdeveloped due to over 2 decades of war. scoring 0 out of 6 in terms of depth of credit information and 5 out of 10 on the strength of legal rights. minority shareholders are better protected from director’s misuse of corporate assets for personal gain in South Africa (10th). Getting Credit South Africa Kenya Rwanda Uganda Egypt UAE Nigeria Sudan (Khartoum) Juba Palau SS Average 2 6 34 46 72 72 89 138 176 183 120 E. Because of this. Most lending is short term (3 to 6 months) and interest spreads are high. Considering the depth of credit information and the strength of legal rights indexes. Protecting Investors: measures the transparency of related-party transactions. Juba would rank 176th of the 183 economies--far behind Kenya (6th). Uganda (46th).

The primary port used by its local traders is the port of Mombasa in Kenya. wait 60 days. To export through the same port. situated 1. High tax rates and burdensome tax administration are consistently ranked among the main obstacles to doing business by entrepreneurs around the world.ANNEXES Southern Sudan: Macroeconomic and Business Environment Overview F. where the same company spends 180 hours every year on 42 payments and 36. cargos to and from Juba have to go through 2 customs border posts—at Nimule/Bibia border between Sudan and Uganda and at Malaba between Uganda and Kenya.420 to import a standardized container of cargo through the port of Mombasa.492 while exporting takes 32 days and costs USD 1. and spend USD 9. 38 days and costs USD 2. In order to trade overseas.1% of its commercial profits.050. Juba is an inland city. Even though Sudan is home to Port Sudan--a deep-water port in the northwestern part of the country--geography and conflict have constrained Sudan’s north-south infrastructure linkages. while exporting takes 32 days and costs USD 2. Juba would rank 181st on the ease of trading across borders--only ahead of Afghanistan (183rd) and the Central African Republic (182nd).900. and spend USD 5. This is slower and more expensive than from Khartoum where. wait 52 days. The time indicator captures the number of hours it takes to prepare. and pays 25. time and total tax rate borne by a standard firm with 60 employees in a given year. In other parts of Sub-Saharan Africa. on average. 32 . Paying Taxes SS Average Belarus Kenya Egypt Nigeria Sudan (Khartoum) Juba Uganda Rwanda South Africa UAE 0 5 40 80 120 160 200 25 43 61 84 94 136 134 162 116 183 G. an entrepreneur needs to submit 9 documents. Paying Taxes: measures the payments. The indicators cover procedural requirements such as documentation requirements and procedures at customs and other regulatory agencies as well as at the port.962. including the time and cost of inland transport to the largest business city. In Juba. Compared globally to 183 economies. via Port Sudan. They also cover trade logistics. Globally.Trading Across Borders: measures the time and cost (excluding tariffs) associated with exporting and importing by ocean transport. the process is quicker and cheaper: importing takes. a medium-size company spends 218 hours per year making 46 tax payments. and the number of documents necessary to complete the transaction. importing takes 46 days and costs USD 2. The number of payments indicator measures the frequency with which the company has to file and pay different types of taxes and contributions. This is more cumbersome but less expensive than in Khartoum. Juba would rank 84th among 183 economies on the ease of paying taxes--ahead of Egypt (136th) but behind Uganda (62nd) and Rwanda (43rd). file and pay 3 major types of taxes: profit taxes.025. The total tax rate measures the tax cost borne by the standard firm.400 kilometers away.5% of its annual commercial profit in taxes. adjusted for the way in which those payments are made. An entrepreneur in Juba needs to submit 11 documents. consumption taxes and labor taxes and mandatory contributions.

The dispute involves the breach of a sales contract worth twice the income per capita of the economy. Enforcing Contracts 200 160 120 80 40 0 39 74 84 113 97 125 134 143 146 118 183 Kenya Egypt Timor-Leste Sudan (Khartoum) South Africa Juba Rwanda Uganda Nigeria UAE I. Juba is among the world’s poorest performers in the area of closing a business.Enforcing Contracts: measures the time. stable economy. and Uganda (113th). 12 of the region’s 46 economies have had fewer SS Average 33 . Speed. A functional dispute resolution system is essential for sustaining a healthy.ANNEXES Trading Across Borders UAE Egypt Sudan (Khartoum) Kenya Nigeria Uganda South Africa Rwanda Juba Central African Republic Afghanistan SS Average Southern Sudan: Macroeconomic and Business Environment Overview 3 21 143 145 147 149 151 160 181 182 183 136 H. It does not however measure insolvency proceedings of individuals and financial institutions. cost and number of procedures needed to resolve a commercial lawsuit between 2 domestic businesses. Globally. cost and outcome of insolvency proceedings involving domestic entities. Closing a Business: studies the time. The case is disputed on the merits and the court hears an expert on the quality of the goods sold. Juba would rank 74th of 183 economies--behind Rwanda (39th) but ahead of Khartoum (146th). This does not put Juba far behind other countries in the region. Enforcing a contract in Juba requires 46 procedures over 111 days and costs 26% of the value of the claim-faster and cheaper than the Sub-Saharan average (which requires 639 days and costs 50% of the value of the claim). Juba would rank among the bottom 26 economies on this indicator. In fact. Efficient contract enforcement is associated with greater access to credit for firms. Wellfunctioning courts help businesses expand their networks and markets. Kenya (125th). low costs and continuation of viable businesses characterize the top-performing economies. Compared globally. Sub-Saharan Africa has the largest share of economies with little or no insolvency practice.

7% of the value of the debtor’s estate and takes 3. To close a business in Sub. on average. Closing a Business SS Average Sudan (Khartoum) Rwanda Juba UAE Egypt Nigeria Kenya South Africa Uganda New Zealand 0 17 40 80 120 160 200 57 75 86 99 131 143 128 183 183 183 34 .4 years. 20.Saharan Africa costs.ANNEXES Southern Sudan: Macroeconomic and Business Environment Overview than 5 insolvency cases annually in recent years.

239 4.503 4. Claims by government (BoSS) of which.ANNEXES Southern Sudan: Macroeconomic and Business Environment Overview ANNEX 2: Southern Sudan--Major Macroeconomic and Business Indicators (2008-2010) 2008 2009 2010 (SDG in millions. Money supply of which. GOSS. Banking and Credit A.020 35 .442 318 39.612 4.671 119 5.098 650 483 167 4.5 0.840 899 867 4.Bank of South Sudan (BoSS) B.483 2. Factors Affecting money supply Net Foreign Assets Net Local Assets Revaluation C.402 101 4.179 1.321 28 37 2 N/A 66 6 1.121 118 3.254 766 491 275 1.Commercial Banks .281 5.313 990 19. Agriculture Industry Imports Exports Local trade Others Consolidated commercial banks balance sheet Deposits Current deposit Saving & other deposits Bank of Southern Sudan consolidated balance sheet assets Government Finance GoSS Revenue Oil Revenue Non-Oil Revenue GoSS Expenditure Salaries Operating Capital 6. States and local government Public corporation Claims on private sector Claims on commercial banks D.606 1.713 1.873 2.227 1.6 N/A 57. Currency with the Public Demand Deposits with .1 200 176 119 25 136 138 25 139 118 389 -8 888 460 -625 963 318 318 N/A 4. Position of commercial banks financing by economic activities or sectors of which. unless otherwise indicated) Money.790 6.6 7 715 484 392 92 3.3 34.

860 1. Statistics and Evaluation (SSCCSE)--Statistical Yearbooks for Southern Sudan (2009& 2010) 36 .555 1. Repair of motor vehicles and motorcycle Transportation and Storage Accommodation and Food Service Information and Communication Financial and Insurance Activities Professional. Mining and Quarrying. Steam and Air-conditioning Supply Manufacturing Water Supply. Waste Management and other services Construction Wholesale and Retail Trade.077 24 988 2009 633 52 2010 20 20 Source: Southern Sudan Centre for Census.26 1.786 10 199 7 89 5116 45 1037 97 52 46 10 31 361 22 211 2.333 10. Entertainment and Recreation Other Service Activities Businesses by Year of Founding.068 11.ANNEXES Southern Sudan: Macroeconomic and Business Environment Overview ANNEX 2: Southern Sudan--Major Macroeconomic and Business Indicators (2008-2010) 2008 Fiscal Balance Direct Expenditures of GONU Reserves Overall Budget Deficit/Surplus Agriculture Estimated Cattle numbers (thousands) Estimated Cereal Production in Traditional Sector (in ‘000 tons) Businesses and Cooperatives Businesses by Type of Activity (Number) off which. Forestry and Fishing.735 660 1. Scientific and Technical Activities Administrative and support service activities Education Human Health and Social. (Number) Memo items: South Sudan Population (millions) 8. Sewage.136 7. Electricity. Gas. Agriculture. Service activities Arts.

unless otherwise specified) 19. unless otherwise specified) 8.147 484 139.531 1.0 6.904 21.7 58.1 2.3 14.4 16.1 29.615 34. dollars) GNP per capita (in USD) Oil Production (average.4 5.0 22.715 3.0 10.6 6.663 15.8 6.834 7.0 23.4 12.497 3.528) (10.433 803 (9.2 41.0 7.394 462 144.644 1.287 58.30 34.5 17.036 31.902 8.933 3.8) 2.5 7.3 13.398 1.6 7.5 6.8 5.0 8.7) 2.308 4.399 1.251 1.3 14.458 2.918 2.131 703 (8.314 6.6 26.S.6 1.081 1.1 33.316 474 151.1 2008 2009 2010 Proj.174 66. & SOEs) Credit to the private sector Net foreign assets Exchange rate (SDG/US$) end-of-period Balance of Payments Exports of goods (in millions of USD) Oil exports non oil products Imports of goods Current account balance (% GDP) FDI and Portfolio investment (net) External debt (in billions of USD) External debt (% GDP) External debt-service ratio (% exports in Cash payments & Commitment basis) Gross official international reserves (in months of imports of goods & services) Government finances Revenue and Grants Tax revenue Oil revenue 28.632 18.5 -3.8 -4.5 13.097) (7.4 8.8 29.7) 2.0 128.9 68. (in millions of SDG.2 41.358 5.378 1.3 37 .5 9.000 15.9 31.429 54.1 16.6 21.960 13.9 1.3 7.9 29.488 460 137.7 7.0 38.236 9.748 15.4 32.9 21.319 13. in thousands of barrels per day) Crude Oil Exports (volume.6 7.628 33. in thousands of barrels) Gross National Saving (% GDP) Gross domestic fixed investment (% GDP) Government investment (% GDP) Private investment (% GDP) Consumer prices (year-average) Consumer prices (end of period) Money and Exchange Rates Broad money (M3) Credit to the public sector (Govt.1 23.904 576 (9.0 11.827 7.4 1.7 6. unless otherwise specified) 20.977 2.5 16.9 10.09 28.1 12.981 36.480 11.523 1.4 6.7 64.9 45.443 460 (7.0 6.0 (in percentage of GDP.8 19.3 11.9) 3.811 46.595 1.5 121.3 29.0 8.390 5.3 15.661 1.722) (10.9 93.9 159.2 14.5 23.273 10.02 22.552 … (in millions of USD.8 58.5 16.0 8.150) (7.2 11.028 1.ANNEXES Southern Sudan: Macroeconomic and Business Environment Overview ANNEX 3: Sudan--Selected Macroeconomic Indicators (2007-2010) 2007 Economic Activity and Prices Real GDP growth (annual percentage change) Oil Non-oil GDP Sector Share (percentage) Agriculture Industry Services Nominal GDP (in millions of SDG) GDP at current market prices (USD millions) Nominal GDP per capita (in U.3 8.8 897 0.

3 20.033 2010 Proj.2 58.0 1.3 39.1 81.2 -1.4 887 2008 0.5 17.4 1.8 -5.7 21.7 -3. discrepancy) External financing of the deficit Domestic financing of the deficit Change in arrears (in millions of USD) Memo items: Population.1 854 2009 0.1 3.1 69.5 23.ANNEXES Southern Sudan: Macroeconomic and Business Environment Overview ANNEX 3: Sudan--Selected Macroeconomic Indicators (2007-2010) 2007 Grants Expenditure and net lending Current expenditure Investment expenditure Overall fiscal balance (incl.7 4.0 38. mid-year (in millions) Sudanese Crude Oil Price (USD dollars per barrel) Source: IMF Staff Report on Sudan (June 2010 & April 2011) 37.1 0. 0.222 38 .7 0.6 2.4 0.4 1.4 2.0 4.6 25.8 3.6 20.4 17.2 1.9 21.1 47.8 -4.4 40.1 4.2 1.