South Sudan: Investing
While UNCTAD’s 2022 World Investment Report does not provide data about South Sudan, according to its previous edition FDI inflows to the country increased from a negative value of USD -232 million in 2019 to USD 18 million in 2020, despite the global economic and health crisis triggered by the Covid-19 pandemic. However, FDI stocks in the country were not measured in the UNCTAD report. Most FDI in South Sudan is concentrated in the oil and gas sector. Other sectors that have attracted some investment include agriculture, mining, and infrastructure development. China, Malaysia, India, and Uganda are among the top countries investing in South Sudan. For example, China National Petroleum Corporation (CNPC) has been involved in oil exploration and drilling activities, and a joint venture between CNPC, Malaysia's Petronas, and Sudan's Sudapet, named Petrodar Operating, was formed to conduct oil exploration, drilling, and transportation activities. Furthermore, in 2018, South Sudan's government awarded a contract to a Chinese construction company, AVIC International, to expand Juba International Airport. Various other foreign investors are present in the country: Russian oil and gas companies Zarubezhneft, Gazprom Neft, and Rosneft; Indian Oil and Natural Gas Corporation; Malaysia-based Petronas; Nigeria’s Oranto Petroleum and Sahara Group; Moldova’s Ascom and South Africa’s state-backed Strategic Fuel Fund (SFF).
South Sudan suffers from a highly unfavourable business climate. The main factors impeding FDI flows are external threats to peace, security, and stability; institutional and human capacity weaknesses, heavy dependence on the oil sector and dilapidated infrastructure (AfDB). The civil war has hampered investment. The creation of institutions as well as the establishment of attractive fiscal regimes were some of the first measures taken by the Government to promote foreign investment. The Southern Sudan Business Forum (SSBF) was created to facilitate dialogue between the public and private sectors. In theory, foreign investors could control a company in all sectors, but the authorities have reserved their right to rule an investment in each sector. There is no title insurance and no formal way to determine ownership outside of current possession. The country is rich in natural resources (oil, iron, diamond, copper, nickel, marble, and gold) and has potential hydropower sites. The legal system is underfunded, dysfunctional, and subject to corrupt practices and interference. Government entities do not enforce laws equitably or consistently. Therefore, corruption is rampant, and South Sudan ranks 178 out of 180 countries in Transparency International's 2022 Corruption Perception Index. A peace agreement was signed in September 2018, which is hoped to bring back long-lasting peace. The Revitalized Transitional Government of National Unity (R-TGoNU) continued to implement the 2018 Revitalized Agreement on the Resolution of the Conflict in the Republic of South Sudan (R-ARCSS), although key provisions on security, governance, and transitional justice remain outstanding.
| South Sudan | Sub-Saharan Africa | United States | Germany | |
|---|---|---|---|---|
| Index of Transaction Transparency* | 2.0 | 5.5 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 1.0 | 3.5 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 5.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
| Foreign Direct Investment | 2020 | 2021 | 2022 |
|---|---|---|---|
| FDI Inward Flow (million USD) | 18 | 68 | 122 |
| Number of Greenfield Investments* | 0.0 | 1.0 | 2.0 |
| Value of Greenfield Investments (million USD) | 0 | 8 | 128 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Personal income tax | Progressive rates from 0% to 20% |
| From SSP 0 to SSP 2,000 | 0% |
| From SSP 2,001 to SSP 5,000 | 5% |
| From SSP 5,001 to SSP 10,000 | 10% |
| From SSP 10,001 to SSP 15,000 | 15% |
| Above SSP 15,000 | 20% |
| Setting Up a Company | South Sudan | Sub-Saharan Africa |
|---|---|---|
| Procedures (number) | 12.00 | 7.51 |
| Time (days) | 13.00 | 21.30 |
Source: Doing Business.
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Latest Update: September 2023
