LATEST: Businesses close as South Sudan Civil War takes its toll

By NJIRAINI MUCHIRA, THE EAST AFRICAN, OCT/18/2017, SSN;

Kris Mbaya, the managing director of UAP Old Mutual South Sudan, who was posted to the country in early 2013, is among business managers who have seen the good, the bad and the ugly of South Sudan’s business landscape in its short history of 11 years as an independent state.

Indeed, UAP Equatorial Tower, the tallest building in the country at 15 storeys high, is a fitting analogy of how businesses that flocked into South Sudan following the signing of the Comprehensive Peace Accord in 2006 have crashed.

UAP was among the first companies to venture into South Sudan at Independence, and invested $30 million in putting up the building in 2011 to provide foreign investors with ultra-modern office space.

But the breakout of violence in 2013, following the fallout between President Salva Kiir and his then deputy Riek Machar meant that the building could not be completed on time and as such had no tenants for a long time.

The tower — with only 23 per cent occupancy —is a painful reminder of a strategic investment decision that went awry.

Occupancy will rise to 35 per cent when the Kenyan embassy in Juba relocates to the building by end of the year.

Although it generates minimum revenue, the building generates costs. Every month, UAP spends $15,000 for diesel to power the generator, which is the only source of power, and $5,000 for satellite Internet. In Kenya, it would cost only $400 for the same Internet capacity.

However, the building also represents the long term view of South Sudan opportunities.

“We believe in the long term potential of South Sudan. This country represents the mantra of high risks, high returns for us as a business,” said James Wambugu, UAP Old Mutual Group managing director in charge of general business.

While UAP believes in the potential of South Sudan, other companies have fled because of insecurity, political uncertainty and a struggling economy.

Sme’s close down

Several small and medium enterprises owned by foreigners have also closed down, while traders bringing goods into the country, particularly foodstuffs and other consumer products, are operating in a difficult environment.

“Business in Juba used to boom, but things have been tough since the crisis,” said Peter Kaikara, a Uganda national who supplies alcoholic beverages to several outlets in Juba.

Considering that South Sudan largely depends on imports, the cost of living and of basic commodities is high due to the poor state of roads and lack of electricity. The country has only 400 km of paved road.

A bottle of 500ml Kenyan beer brand Tusker that costs $1.9 in Kenya is $3.3 in Juba. Rent for a one-bedroomed apartment ranges from $1,500 to $2,000 per month.

Juba has one mall, City Mall, which is a pale shadow of those found in other East African capitals.

Unemployed young people crowd the streets in Juba, idling away and drinking strong tea; motorcycles (boda bodas) are the main source of earning a living for many.

The unemployment crisis has been exacerbated by the exit of numerous foreign companies while others have scaled down their operations after experiencing losses.

Kenyan multinationals like KCB Group, Stanbic Holdings, Equity Group, Co-op Bank and CIC Insurance are some of the businesses that have significantly reduced their operations in the country.

The hopes of prosperity and opportunities that came with the signing of the Peace Accord in 2006 have been diminished.

Three years of political instability and prolonged fighting between government forces and rebels, particularly in the oilfield states of Paloch, Upper Nile and Maiwut, have crippled the economy that is highly dependent on oil.

Cash crunch

The cash crunch from oil earnings has made it impossible for the government to meet even basic financial obligations, including paying salaries of civil servants, teachers and the police, some of whom are earning $20 per month.

The government has no money to finance key programmes like health, education and agriculture to secure food production.

Despite its huge tracts of fertile soil and water resources, South Sudan remains largely a subsistence agriculture state. Currently the country imports 70 per cent of food from Kenya and Uganda, and humanitarian organisations say that about half of the population is food insecure.

“Food security continues to deteriorate across South Sudan with life-threatening hunger spreading in scale and scope, making 2017 the most food-insecure year in the country’s history,” states a report by the United States Agency for International Development.

By July, approximately six million people were experiencing crises or higher levels of acute food insecurity and were in urgent need of emergency aid.

Despite being a significant oil producer, South Sudan depends on imports of petroleum products for local use, with diesel in the country being among the most expensive in East Africa at $1.05 per litre, compared with $0.95 in Kenya.

The government has established a fuel subsidy programme to ensure fuel trades at $0.2 per litre.

9 Comments

  1. Eastern says:

    This is the current situation in Juba explained succinctly. For the whole of last week, I was not able to get fuel and there are no “rumours” of fuel trucks on the way from Nimule to Juba as has been the case here.

    Somebody in J-1 still wants to know what the IGAD revitalization is all about insisting that the national dialogue was the only way to bring about peace and stability in the country. Are we not held hostage already? Haven’t we reached the state of stalemate which calls for desperate measures?

  2. Okuc says:

    Okuc

    Kirr should step down voluntarily or forced to go and face the consequences of his mismanagement of the country. His so -called National dialogue is a scam and no body will buy into it except his Jieng folk who are supporters of such a scheme in the hope of consolidation of fascist regime over the rest of South Sudanese.

  3. False Millionaire says:

    Don’t worry brother Eastern.Omer Albashir lost wings already and gave in.The revitalization scheme so rooted in your thaughts will undo the hostage taker that’s the cause of your torment in J1.U will only be left to shed tears becouse equaria’s independence doesn’t fit in those arrangments.

    • Eastern says:

      False Millionaire,

      Equatoria will always remain an important factor in the governance of South Sudan. Kiir, with the advice of the JCE, did the superficial work of removing the brand Equatoria through his nefarious decree for 28/32 tribal enclaves aka as states.

      You are right that Omar Bashir has been corned by the New World Order. Remember, this Islamist inherited a regime fighting the insurgents then in southern Sudan and he continued fighting for all his 28 years in power, most of it under US Economic Sanction. Bashir will still be pushed further in the coming months to make further concessions for the betterment of the Sudanese people.

      Back to the Equatoria factor, there’s no shedding tears here. What Kiir and IGAD continue singing all along as revitalisation but not renegotiation of the ARCISS is for your interpretation – the devil is in the details of what lies ahead in that forum.

      To realise a genuine peace in South Sudan will take major concessions from the tribal regime in Juba lest the country continue to remain fragile. Don’t ask me why Biafra crises looms in Igbo Land more than 4 decades after the rebellion was “crushed”…

    • KK says:

      False M,
      Why are you always pissed when you read anything about Equatorian Independence? , You sometimes write as a nationalist but deep inside you is same Jeing beast obsessed with living and enjoying the land, the hospitality and civility of our people of superlative class compared to yours- Facts are bitter
      Easterner did not mention Equatoria but you’re so paranoid that seeing Easterner’s commend switches your irrational rage against Equatorians.
      Well, The world has entered and era of secession if you follow your news well, it’s not only a monopoly of Africa, but Asians (The Kurdish)and Europeans(the Catalonians) as well.
      Of course the common domain here is that breaking away comes with a cost. When the people are pregnant with the notion of “give me freedom or give me death” is when you will know that no weapon shall silence an angry soul. You started and are till slaughtering our boyz in cold blood. Time will tell

  4. Bismark says:

    What we have now in South Sudan is a virtual state that must be stopped by a collective effort of patriots from all the corners of the country. The focus should be to converge all divergent views against the despotic rule in South Sudan into a force that will practically change all the rotten, corrupt system implanted in the country by disbanding the security, defense an the institutions established in this beloved motherland by the demagogues that are in control of it.

  5. False Millionnaire says:

    Eastern,
    The great surprise is,u are misreading the sign of what’s coming.It’s the same England leading the US that colonized us and left us as one indépendant entity in the full Knowledge that we weren’t one people then as we aren’t one people now.But having imposed that mistake then,so are they coming to impose it again owing to the cow to Milk named économy.For that objective,the end justifies the means and it won’t be à surprise to see them décapitate Kiir,send Riek to hell and put an equatorian on the stool as president to fool u into believing having your interests being served for the next 500 years.Better wake up quickly and try to understand the worst scénario that’s being played that will never permit u to develop into a fraction of 1% of what the catalognia you are mocking is today.

    • Eastern says:

      False Millionaire,

      For the record, I have never been a disciple of that school of thought of a united South Sudan where the BIG TRIBES live side by side with Equatorians under the leadership of an Equatorian president! I don’t believe in such pipe dream.

      For a viable and stable South Sudan, I support any one of the following arrangements:
      1. Confederacy based of the three former provinces of Bahr El Ghazal, Equatoria and Upper Nile;

      2. Kokora in whatever shade…..

      3. Total secession of Equatoria from South Sudan. Secession is the sword against exclusion and oppression.

      There is a lot of wisdom in what the American Confederate states did just as the Yugoslav.

      No single interest leaves here for 500 years, get a life!

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