Tuesday, February 8, 2011

OPPORTUNITIES ABOUND IN LAWLESS SOUTHERN SUDAN

MOSES rues the day he decided to do business in southern Sudan. He heard stories about how there was a lot of money to be made in Southern Sudan.

So he and some friends pooled their resources and put together a four-truck convoy of general merchandise and food to transport to Uganda’s northern neighbour.

A planned week-long trip stretched out into several weeks as impassable roads, numerous road blocks, armed hijackers, disease, frequent vehicle breakdowns and a hostile business environment conspired to slow him down and vanish his profit and capital.

“It was hell. How do people make money in that place. I would rather look for smaller and surer returns than gamble with my money and life,” he said days after returning, a lot darker and several kilos lighter.

Uganda’s is Southern Sudan’s biggest trading partner currently. According to the most recent figures available $260m (about sh598b) worth of goods and services was traded between the two nations in 2009.

Observers say this figure has risen since, estimating that up to a quarter of all Ugandan imports are meant for the southern Sudan market. Uganda import bill in 2010 was $3.8b.

“There are many opportunities in Southern Sudan,” said Kampala City Traders Association (KACITA) spokesman Issa Sekito. “Great demand for housing and construction materials and services, foodstuffs, household commodities, cars and other goods and services … they produce nearly nothing everything has to be imported so you can imagine the opportunity.”

The area known as Southern Sudan is 619,745 square kilometres or almost thrice the size of the Uganda. The population stands at between 7.5 million and 13 million, so it has vast unihabitted spaces.

Ravaged by a civil war between the north and the South for more than 20 years this already marginalised behemoth has never really got on its feet.

As an indicator there are only 60km of tarmarcked road in all the region, power is provided by generator as there is no national grid and water is scarce in many areas.

Apart from part of the DR Congo, Southern Sudan is largely unattached by modernity which is a challenge but also a source of immense opportunity.

The region contains many mineral resources such as petroleum, iron ore, copper, chromium ore, zinc, tungsten, mica, silver and gold.

There are huge international interests with their eye on Southern Sudan’s vast natural resource potential but everyone agrees that the biggest challenge is to overcome the general state of lawlessness in the area.

“These are people who are just out of a war, there was not much in the area before the war and what little there was in the way of systems and institutions have broken down,” KACITA spokeman Sekitto said.

At the top of many traders’ challenges in dealing with Southern Sudan is the real risk of not being paid for goods and services delivered and the lack of formal institutions to resolve such disputes.

“I ask for 90% of payment up front if not I lose interest in the whole venture, if they do not pay you where do you find them? And there is a real danger that if you press too much for payment you can be literally lose your life,” another transporter said.

According to Sekitto at least 20 Ugandans have lost their lives following such disputes and Kampala seems indifferent to the plight of its businessmen.

“The attitude seems to be that political interests supercede commercial interests… we have a petition delivered to parliament at the beginning last year but it has not been tabled in the house,” Sekitto said.

But the trade ministry disagrees.“We have all those complaints and we have a memorandum of understanding to set up a arbitration committee to look into these claims,” said Silve Ojakol, commissioner external trade in the ministry.

He explained that all claimants have been divided into four groups according to whether they have claims with the government of South Sudan (GOSS), local authorities, private businessmen or robbed or defrauded.

“The naming of the arbitration committee – which would handle claims between private businessmen has just been delayed by the recent referendum, but our consulate general in Juba is following up on all claims against GOSS and the local authorities,” he said. The arbitration committee was agreed on in February last year but has not been constituted todate.

As more traders have made the foray into southern Sudan, the margins have thinned considerably.

“But they are still by far better than anything our businessmen are used to, which explains why they keep going back … the returns are worth the risk,” businessman Joseph Okiror said.

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