SUDAN

RISK RATING
Severe
Default High Risk Score 9.00
Normal Average 6.90
Weighted Average 6.64
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

The transitional government has clinched a remarkable peace deal with long-marginalised non-Arab armed groups in Darfur, South Kordofan, and Blue Nile regions who will now seek to enter the political process ahead of elections in 2022. Prime Minister Abdallah Hamdok wanted to clinch this peace deal to counter criticisms he is leading a deadlocked transitional government. He will use the peace deal to drive fresh momentum into his reform policies. In 2020, Sudan became the third Arab state to publicly agree to establish ties with Israel, while Sudan will finally be taken off the list of state sponsors of terror after 27 years. This development means that Sudan can now gain access to financing from international banks and institutions and is open for business from multinationals. However, the 2020 peace deal was the easy part, as holdout groups in western and southern regions still imperil security, while myriad local grievances and a weak economy threaten to derail implementation of the peace. The pandemic has also exacerbated tensions between the military and civilian administrations, as well as between Bashir loyalists and pro-democracy supporters.

  • Prime Minister Abdalla Hamdok leads a government of technocrats under a power-sharing agreement between the military and civilian groups for a transitional period due to last until late 2022. There are already concerns that there are insufficient mechanisms in place to force the military to hand over power after its initial 21 months of rule. Relations between civilians and the military have been tense, and the government has encountered resistance as it tries to implement economic reforms. Pro-Bashir demonstrators are aiming at disturbing the transitional period to pave the way for a military coup.
  • The civilian protest movement is no longer able to mobilise under coronavirus restrictions, which has weakened the civilian faction in the power-sharing government. Any perceived weakness in the military could also resume the insurgencies in the Darfur region and the states of Blue Nile and South Kordofan, including those fought by the Justice and Equality Movement (JEM), which is part of the wider Sudanese Revolutionary Front (SRF) collective. A resumption of conflict and insecurity in these regions ‚Äď particularly in Darfur, which will be left vulnerable given UNAMID withdrawal ‚Äď could compromise a key tenet of the full sanctions removal that focuses on maintaining internal peace in Sudan. However, a full-scale return to hostilities is not expected at this time.
  • The 2020 peace deal will improve regional stability and add fresh momentum to economic reforms. A peace agreement in Sudan will have a positive impact on its relations with its neighbours, and more importantly with South Sudan which uses Sudan to export its oil to the world market, which provides important transhipment fees to Sudan. Currency decline, hyperinflation, and massive un-serviced debt are primary obstacles to economic recovery. Sudan already has the highest debt as a proportion of GDP in Africa, at 212 percent in 2020. Government borrowing is due to rise even further as relations with the lending institutions are normalised.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
6.8
Expropriation, Nationalisation, Confiscation & Deprivation
5.5
Contract Frustration & Breach
6.5
Taxation
7.0
Bribery & Corruption
7.5
Regulatory Burden
6.5
Strikes, Riots & Civil Commotion
6.2
Security
6.0
Sovereign Default
9.0
Economic Volatiliy
8.0

Risk Rating Scale (small)

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