Conflict may hurt Juba’s bid to join East African Community

By GALGALLO FAYO, Business Daily, NAIROBI, KENYA;
Posted September 18/2012

In Summary

*An applicant must also demonstrate the potential to contribute to the integration in the bloc.
*South Sudan is facing US dollar shortage and has restricted the volume of transactions, affecting trade.
*South Sudan loses about $1 billion a year in hard currency to neighbouring Kenya and Uganda through remittances, informal trade and imports of goods

A volatile currency and rampant insecurity could hurt South Sudan’s bid to join the East African Community (EAC) bloc.

The country, which seceded from Sudan last year under a 2005 peace deal, hopes to tap into the potential of the EAC common market, which has 133 million people.

Sporadic cases of violent conflict between Juba and Khartoum over oil export deal and border disputes threatens this dream.

The dispute led the south to halt oil exports through Sudan erasing its main source of hard currency, leading to serious instability in its import and export trade.

The oil shutdown wiped about 98 per cent of the landlocked nation’s state revenues. It has almost no other industries apart from oil after decades of civil war with Sudan.

“There are some issues within the treaty that they must conform to, there are certain conditions they have not met, we are negotiating with them,” EAC Affairs minister Musa Sirma said. “A country must be stable, a country must have free economy based on good business culture.”

According to Article 3 of the EAC Treaty, parties seeking membership of the bloc must adhere to universally acceptable principles of good governance, democracy, the rule of law, observance of human right s and social justice.

An applicant must also demonstrate the potential to contribute to the integration in the bloc.

Besides, a State is obligated to prove that it has the capacity to establish and maintain a market driven economy and policies that are compatible with those of the EAC.

Mr Sirma said South Sudan is facing US dollar shortage and has restricted the volume of transactions, affecting trade.

South Sudanese Commerce minister Garang Diing Akuong was quoted by Reuters as having said that the country aims to seal a $200 million credit line from an international bank within three months to cover imports and bolster the local currency.

South Sudan loses about $1 billion a year in hard currency to neighbouring Kenya and Uganda through remittances, informal trade and imports of goods as diverse as medicine, cement, clothes, furniture and food, he told the news agency.

2 Comments

  1. David Debu says:

    It is too early to rush for (EAC) East African Community bloc. In my opinion, we need to attract all regional blocs i.e Central and East Africa — not being attracted by any regional bloc. We must establish rule of law, democracy, transparency, stability, nationalism and many more, then, join any bloc that might be satisfied with our traits. God bless RSS.

  2. Rev: Martin says:

    Brothers let hurry after east Africa, otherwise we loose our capability.

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