South Sudan and its future

The newly-formed government of Africa’s newest state, South Sudan, has pledged its support for the development of the private sector in the country. It has ambitions to promote growth and economic development through public-private partnerships and dialogue with existing business leaders in the country.

This ambition was made clear at a workshop that was organized by the South Sudan Business Forum (SSBF) in partnership with the International Finance Corporation (IFC) of the World Bank Group in September 2011. Elizabeth Majok, the Undersecretary in the Ministry of Commerce said “The President himself is committed to nurturing the private sector; the private sector should now play its role and spur economic growth in the country”. Their plans include passing four Bills that “when enacted, will play a major role in streamlining the business environment in South Sudan” she concluded.

The challenges

There are many, some are weighty. The legacy of 22 years of internal strife has taken its toll. South Sudan has a real hurdle to overcome in skills development, they urgently need educated and trained workers needed to run the new government. Estimates of the literacy rate show only 27 percent, one of the world’s lowest which means that it will be a long road.

A new complication is that Juba, the present centre of government and industry, is too small and the government intends to build a new city and relocate the capital to Ramciel, 250 km northwest of Juba. This is causing some consternation in business circles, especially with Kenyan companies that are installed in Juba.

In its early days of independence the country is still struggling with security issues and also with rampant inflation.

Trade with Kenya and other neighbouring states

Lack of rail infrastructure is hampering many growth initiatives as is problems accessing routes through the Khartoum. This landlocked country has the disadvantage of no access to a port although it clears most of its imports through Mombasa in Kenya. 80% of South Sudan’s trade is with East Africa countries, the leading country is Uganda (also landlocked) closely followed by Kenya.

However, talks are continuing with the oil majors to connect to the main fuel pipeline from Eldoret to Mombasa which would improve export opportunities to Kenya, Uganda, Congo, Rwanda, Burundi, Tanzania and Ethiopia.

The banking sector in South Sudan is quite lively, the government is taking a state in one and the Family Bank of Kenya are making a play for another. The four main banks are potential acquisitions for the more established finance houses in the East Africa region who can see $$ signs.

It is expected that South Sudan will apply for membership of the East Africa Community (EAC) as early as next year.