Taking care of business in South Sudan
South Sudan is one of the toughest places in East Africa to do business, according to a recent report – but if you can hack it, you have a chance to make a healthy profit.
Juba, Sudan — For businesspeople, entrepreneurs, investors, and speculators in East Africa's own "Wild West" frontier town, setting up shop in South Sudan is generally a daunting but lucrative prospect.
A report released this past week by the International Finance Corporation and the World Bank titled "Doing Business in Juba 2011" takes stock of the pros and cons of entering the market in South Sudan, based on a research team's assessment of a number of factors: the existing business regulations, the institutional capacity of the soon-to-be-sovereign southern government, and the formal and informal taxation and credit systems.
The report presents a mixed picture, finding that the process of starting and registering a business is "fast," but expensive – "nearly twice as costly as the average in sub-Saharan Africa thanks to the high fees that must be paid to local and Juba government authorities and a myriad collection of Government of Southern Sudan ministries."
This assessment will likely prove useful for expatriate entrepreneurs hailing from the region and from Europe and North America, though the industrious and hearty truck drivers and market shopkeepers in the southern capital – mainly Ugandan and Kenyan traders – might not find the report as relevant to their daily work.
No matter, since, straightforward or not, the booming business of importing fruits, vegetables, and dried staples such as beans and rice continues day and night in Juba's markets.
A weary-looking Ugandan truck driver, fresh off a three-day drive from eastern Uganda, told me in Juba's Konyo Konyo market that of all the countries he has worked in – from the Democratic Republic of Congo to Tanzania – South Sudan was the toughest, but the most profitable.
Jameel Kasaga's truck full of plantains had been stopped numerous times en route from Uganda to South Sudan Sudan. Mr. Kasaga, who does not own the truck he drives, paid "taxes" five times to bring his edible cargo to Juba.
South Sudan may be war-devastated and underdeveloped, but the vast tracts of unexploited land and long rainy season mean the landlocked region could become a regional breadbasket. Until this happens, though, the south will remain dependent on trade from its East African neighbors and northern Sudanese border states like Southern Kordofan.
Southern leaders this past week accused the Khartoum government of imposing a blockade on trade to the south, underscoring the ongoing fragility of north-south relations while representatives of both sides continue to meet to hammer out deals over oil sharing, citizenship, and division of debts and assets in the run-up to the birth of the Republic of South Sudan on July 9.
The IFC-World Bank report encouraged the south's government to institute reforms to cut red tape and make legal frameworks at the local, state, and soon-to-be national level more uniform.
While these recommendations seem sound, broader challenges related to infrastructure and corruption in the new state will continue to confront those brave businessmen and women who are hustling to keep Juba's markets stocked on a daily basis.