South Sudan: Investing
According to UNCTAD’s 2021 World Investment Report, FDI inflows to South Sudan increased from USD -232 million in 2019 to USD 18 million in 2020, despite the global economic and health crisis triggered by the Covid-19 pandemic. FDI stocks in the country is not mentioned in the UNCTAD report. In 2021, global FDI flows rebounded strongly, but FDI flows to African countries (excluding South Africa) rose only moderately (UNCTAD’ Investment Trends Monitor). The country has received more than USD 4 billion in foreign aid since 2005, mostly from the UK, the US, Norway, and the Netherlands. FDI have been oriented towards timber, mines, oil, finance and coffee. India and China are among the most significant investors in South Sudan. Uganda and Kenya are also present in the banking sector. Despite the Peace Agreement, investments have so far not met FDI growth expectations.
South Sudan suffers from a highly unfavourable business climate. The civil war has hampered investment. 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). South Sudan ranks last (180th) in Transparency International's 2021 Corruption Perception Index. The country also ranks 185th out of 190 economies in the Doing Business rankings issued by the World Bank, and is one of the lowest ranked countries for cross-border trade, a major issue for investors in a poor, landlocked country. 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. The country is rich in natural resources (oil, iron, diamond, copper, nickel, marble, and gold) and has potential hydropower sites. A peace agreement was signed in September 2018, which is hoped to bring back long lasting peace. Various foreign investors are present in the country : Russian oil and gas companies Zarubezhneft, Gazprom Neft, and Rosneft ; Chinese National Petroleum Corporation ; 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). Nestlé's Nespresso has been investing in South Sudan's war-torn plantations since 2014 as coffee became the first non-oil export in many decades. South Sudan recently launched its first ever licensing round to boost the oil sector.
| 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 | 2019 | 2020 | 2021 |
|---|---|---|---|
| FDI Inward Flow (million USD) | -232 | 18 | 68 |
| Number of Greenfield Investments* | 0.0 | 0.0 | 1.0 |
| Value of Greenfield Investments (million USD) | 0 | 0 | 8 |
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: February 2023
