Catherine Masinde had a front row seat—or rather, a front row tent—for the difficult birth of South Sudan. It was tough in Juba in the years leading up to statehood; there were three cars on the road, it was muddy and uncomfortable.
In the last year, both Masinde and South Sudan have moved onwards and upwards. South Sudan has secured statehood and Masinde has moved up to what she calls a “half star” hotel. It may be tiny, but at least it has air-conditioning. This Kenyan is the World Bank’s investment climate specialist in South Sudan.
The eyes of the world were on the birth of South Sudan when it became the world’s newest state in July 2011, a moment the people had longed for and voted for.
So what does 2012 and beyond hold for a country with the odds stacked against it? It has suffered two civil wars and the economy is precariously dependent on oil. More than half a century of war has left the country frozen in time; building it up will take a lot of time, hard work and investment.
South Sudan is covered in dirt roads that turn to mud when it rains. Electricity is for the lucky 1% and comes from expensive diesel generators. Despite a combined GDP with the North of $30 billion, an estimated four billion barrels in oil reserves and a rich mineral base, 90% of the population lives below the poverty line.
Masinde, who is helping the government of South Sudan rebuild and reform to win investment, is seeing signs of economic recovery.
The three private cars rolling along the dirt roads of Juba in 2005 are now competing in traffic with more than 1,000 vehicles.
“It’s a huge task but as they say: surely surely, slowly slowly,” says Masinde.
Business registries have risen from 136 in 2005 to more than 12,000. About 65% of these are in the service industry, with half of those in construction. The country is a blank slate for the builder.
Excel Construction Ltd carried out the World Bank-funded construction of two education centers in Juba. South Sudan Logistics has been building lodges and clinics since 2005.
The government of the United States is paving a 200km road from Juba to the Ugandan border. Uganda is one of South Sudan’s major trade partners. Hotels have sprung up and Juba International Airport is buzzing. Investment is also going into regional airports.
“Any hand trying to lend to us cannot be denied,” says Peter Bior, South Sudan’s information officer.
Masinde agrees: “Government needs partnerships with private industry to builda country.”
Masinde’s team has helped establish a new Ministry of Commerce, Industry and Investment. The former Ministry of Investment has turned into an investment promotion agency. The Ministry of Justice is being used to strengthen the Business Registry. The government has also instituted numerous Acts ranging from the Investment Promotion Act to the Personal Income Act.
“The business environment is catching up with the other East African countries. Registering a company takes 15 days and this will improve with time,” says Masinde.
South Sudan is also pushing to diversify its economy away from oil.
Agriculture is one industry that the country is looking to build. South Sudan is 644,000 sq.km, with at least 30 million hectares of arable land. Only 4.5% of this land is working.
South Sudan has formed bad habits—more than 50 years of war has created dependency on food imports and the World Food Programme.
South Sudan imports its fruit, vegetables and poultry from Kenya and Uganda. This raises questions about food security. Refugees flooding back into the country are putting pressure on an already delicate food balance. The country is prone to floods and drought, but with effective planning, maize, millet, cassava, rice and sesame seeds can be grown. There is also potential for sugar.
“We continue to encourage the civil population to utilize their minor skills [in subsistence farming] but we are looking towards larger operators for commercial farming,” says Bior.
Land grabbing has been a problem in South Sudan. This has prompted the government to create a progressive Land Act (2009). With plans to get the primary sector underway and the infrastructure up and running, there is a call for more manufacturing. There is already an increase in light manufacturing like brick making and the construction of doors, gates and frames.
A leading international company that has seen the immense manufacturing potential in South Sudan is SABMiller. It invested $37 million in its Juba operation, Southern Sudan Beverages Ltd. The brewery manufactures beer called White Bull, soft drinks and bottled water. South Sudanese took royalties from the deal. SABMiller received $1 million from the African Enterprise Challenge Fund, a $120 million private sector fund. This, along with
$2 million from the company will be used by FARM-Africa to work with local small-scale farmers who will grow the cassava SABMiller buys to make beer.
“This project will convert what is currently a subsistence crop into a cash crop, creating valuable and sustainable economic opportunities in a fragile region,” says Mark Bowman, managing director of SABMiller Africa.
From land mines, to beer, to the second Garden of Eden—in the words of the marketing men. Tourism is a market that has yet to be tapped. The South Sudanese government took charge and deployed delegations to countries like Zimbabwe, which profit from tourism in adversity.
The country sits alongside the Nile and is rich in wildlife with a history of a large antelope migration. Al Ain Wildlife, an Emirati company, will be constructing, as per its lease agreement, luxury hotels and tented camp resorts within Boma National Park.
With all the possibilities in business, training and skills development, infrastructure, agriculture and tourism, all eyes are on the blank page that is South Sudan.
The country is counting on its acceptance into the Common Market for Eastern and Southern Africa (COMESA); the East African Community (EAC); the African Growth and Opportunities Act (AGOA); and the European Union to help it gain access to key markets. But most importantly, it is counting on the return of its people and their skills.
The people of South Sudan must band together to shape their country into a formidable one. It truly is a new beginning. Happy New Year, South Sudan and good luck—you are going to need it.
The Oil Question
The former Sudan’s oil lies in the South, with the distribution network and refineries in the North. This has always meant that the two nations at war with each other shared the oil revenue. With its dependence it would be ideal for the South to take charge of all its resources, but this is a delicate situation as the North also depends on the oil revenue and would not easily allow revenues to dry up. Soon after its independence, South Sudan was in talks with Kenya to build a new pipeline between the two countries. This could take years to achieve.