Doing Business in South Sudan

Business and Economic Overview

Since the onset of the civil war, the disruption of oil exports and the fall in global oil prices, South Sudan’s economy has considerably suffered. Indeed, crude petroleum has consisted of in excess of 99.5% of South Sudan’s exports and is the significant source of the government’s foreign exchange.

Real GDP growth has been negative since 2015 and is forecast to remain so until 2019. At the same time, hyperinflation has occurred through a current annual rate of 182.2%. There is also significant disparity between the overvalued official exchange rates and black-market exchange rates as the South Sudanese Pound continues to depreciate.

South Sudan ranks 187 of 190 in the World Bank’s 2017 Ease of Doing Business Index and 181 of 190 in their Ease of Starting a Business Index. The Government of South Sudan welcomes foreign commercial activity and investment although political violence, corruption, poor financial management and extremely lacking infrastructure make South Sudan a difficult place to do business.

International companies have frequently complained about the inability to convert local currency into US dollars. This led to SABMiller ending Sudanese production in 2016.

Nevertheless, there are every few restrictions on foreign firms operating in or exporting to South Sudan. Given the predominance of the petroleum industry to South Sudan’s economy, the vast majority of opportunity exists in this sector.

South Sudan is seeking to more than double its oil production over the years 2017/2018 and the government is seeking significant investment in oil exploration and the construction of energy connections to neighbouring countries in order to diversify its export routes away from Sudan. The agricultural sector is also seen as a crucial industry for investment, both by the government and World Bank. In particular, South Sudan has the potential to become the fourth largest exporter of gum arabic in the world. 

Significant infrastructure renewal is also required, but the government lacks the finance to undertake large scale projects.

Overall, the political situation and government’s financial management are the determinants of the ease of doing business and the scale of commercial opportunity in South Sudan. Market entry is suggested through a partnership with either a government or military official, as these figures own most private enterprise and are more likely to win government contracts.


Security Situation

South Sudan remains in the midst of a civil war between the government’s Sudan People’s Liberation Movement and the Sudan People’s Liberation Movement-in-Opposition: a war that has transcended politics and has a strong ethnic association owing to the government widely perceived as Dinka dominated.

As such, both political and ethnic violence is regular across the country and including along the national borders, where foreign governments have also acted across the South Sudanese border. The situation is particularly unstable in the southern, eastern and northern states. Owing to violence in the latter, President Kiir declared a state of emergency in December 2017.

Weapons are easily obtained and as such criminals are often armed. The poor economy means that crimes are often financially motivated. For example, extortion at checkpoints by armed criminals is commonplace, particularly after dark. Although there is no direct threat of terrorism, attacks cannot be ruled out owing to the heightened global threat to Western interests and nationals, motivated by a number of conflicts or terrorist groups.

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