SA investors' long walk to Southern Sudan

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The challenges, risks and rewards of undertaking such a journey were outlined yesterday at the Hilton Hotel during the Intra-Africa Business Breakfast hosted by Upbeat Marketing, in association with Bizcommunity.com and SAfm.

Deputy-minister of Foreign Affairs Sue van der Merwe, SA ambassador to Sudan Dr Manelisi Genge, Sudanese ambassador to SA Kuol Alor and senior officials of the Department of Trade and Industry (DTI) attended the proceedings.

Delegates heard that Southern Sudan faces enormous challenges but the opportunities and rewards are vast and endless.

Opportunities exist in mining, education, agriculture, energy, health, animal resources, tourism and hospitality, and many more.

Registering a company in Southern Sudan can take about 48 hours, delegates were told. “We won't ask you where you come from or bore you with too many irrelevant questions. All we want is your money,” Dr B M Benjamin, Government of Southern Sudan (GOSS) minister of regional co-operation, told delegates.

Anthony Makana (MP), GOSS minister of trade and industry, said that his government will provide the following incentives for potential investors:

• Foreign investors are recognised as key partners in the reconstruction process.
  
• Tax exemptions and holidays shall be provided to equipment and capital machinery.
  
• Foreign investors are protected by law to repatriate 100% of their profits should they wish to do so.
  
• Land should be provided for huge investments (land ownership governed by Land Act).
  
• Administration systems for all business registrations are simplified.
  
• Investors will not be subjected by rules that impede their development.
  
• GOSS has established a transparent and accountable system of governance.

A forum also exists where the head of state interacts with foreign investors twice a year.

According to DTI, Africa's challenges are well-documented and range from mediocre human capital (low levels of skills) to low levels of industrialisation and diversification, low productive base, and low flows of foreign direct investment. Africa accounted for only 2% of FDI global flows in 2008.

In addition, intra-Africa trade is very low - only 10% of Africa's total trade with rest of the world in 2007, according to DTI figures. But the ugliest side of Africa can be viewed through its obsolete physical and institutional infrastructure.

George Monyemangene, head of DTI's Africa Bilaterals, said his government has been facilitating investors in areas of primary research and pre-feasibility study in African countries.

Besides, DTI conducts seminars, country briefings and round tables, and establishes export councils and builds linkages to advance Africa's cause in multilateral institutions.

But this is Africa. Challenges - predictable and unpredictable - are countless and can have a negative impact if not tackled properly.

Dr Luka Biong Deng, minister of presidential affairs and chairperson of Investment Authority of Southern Sudan, cited the following challenges:

• Darfur conflict and Southern Sudan
  
• US sanctions and other sanctions
  
• ICC (International Criminal Court) ramifications to Southern Sudan and peace
  
• Global financial crisis and oil prices
  
• Global commodities prices and food insecurity
  
• Post-referendum arrangements

Northern Sudan (mostly Islamic and Arabic and ruled by Omar Al-Bashir) and Southern Sudan (Christian, Bantu and animist and formerly ruled by SPLA of the late John Garang) fought deadly battles for more than 20 years that killed scores and destroyed basic infrastructure.

But the two parties signed a comprehensive peace agreement (CPA) in January 2005, giving Southern Sudan the right to self-determination - thus making Sudan one country with two systems.

Northern Sudan's capital city is Khartoum and Juba is Southern Sudan's capital city.

But Dr Deng said that some of these challenges might not indirectly or directly threaten the economic environment, which is very conducive at the moment for anyone to come and invest.

MTN launched this week and SAB Miller is already operating there under the name ‘Southern Sudanese Beverages', reports say.

Asked whether the global economic downturn could affect investments in Southern Sudan, Dr Deng said: “Not at all. Foreign aid and FDI have become selective and choosy and oil prices have dropped since the crisis erupted, but if you invest in agriculture for instance you are likely to get many high returns.”

Thembi Makhubela, marketing manager of Moran Branded, told Bizcommunity.com: “It was a very informative session. I think the DTI brought more credibility to the presentation, but they should have invited a group of SA investors operating there to share their experiences.”

Many delegates, often confused and stressed about negative media reports on Darfur, said that they were relieved to know that Southern Sudan is indeed not Darfur.

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