East Africa Poised to Tap a Reborn South Sudan

Tuesday, January 11, 2011

NAIROBI/KAMPALA, (Reuters) – East African nations could reap trade and investment opportunities worth billions of dollars to help develop south Sudan if it splits from the north, but they will have to compete with bigger rivals like China to do so.

Southerners are expected to vote overwhelmingly in favour of separation in a referendum next week, a vote that follows decades of civil war with the north and, the south says, economic and political marginalisation.

While companies in neighbouring Kenya and Uganda, from taxi firms to Kenya’s largest lender by assets, Kenya Commercial Bank (KCB), are already tapping the boundless opportunities in Juba, the south’s capital, others are primed to join in.

“We have an advantage but that does not mean we cannot be outcompeted,” said James Shikwati, executive director of the Inter Region Economic Network think-tank.

“Powers such as China, Japan, India are also ready. Whatever we manufacture, they can land here at almost zero cost.”

Kenya’s exports to south Sudan almost doubled between 2005 and 2009, rising to 12.8 billion shillings ($157.7 million) from 6.8 billion after south Sudan rebels signed a peace agreement with Khartoum’s administration that paved the way for Sunday’s vote.

South Sudan is neighbouring Uganda’s main export market, importing goods worth $184.6 million from east Africa’s second largest economy in 2009, according to the Uganda Exports Promotions Board.

Source: Stabroek News (link opens in a new window)