Kenya jittery as S. Africa enters Juba for trade
Posted Saturday, July 28 2012 at 16:14
The entry of South Africa into the South Sudan market has stoked Kenyan fears about the country’s stake in trade in Juba.
The ministry of Trade has expressed fear that South Africa could edge Kenya out of South Sudan––given its level of economic development and superior financial markets––if Nairobi fails to respond in an aggressive way.
Until now, the greatest threat to Kenyan commercial business interests in South Sudan is seen to come from Uganda.
“Kenya should be aware of the threat being posed by South Africa and thus start making the Sudanese market easily accessible by building roads and opening direct borders to South Sudan such as Lokichoggio. Kenya has a very big chance, especially in the construction sector, as the country moves its capital from Juba to Ramciel,” said Mr James Kosure from the ministry of Trade.
The South Africa Department of Trade and Industry visited South Sudan in October 2011 with a multi-sector business consortium to assess the new market in readiness for bilateral trade between the two countries.
Mr Kosure said that although South Africa has a well-established economy, Kenya enjoys a closer relationship with the South Sudan citizenry which gives it an upper hand in business negotiations in the country.
The ministry is concerned that as much as Kenya enjoys close relations with South Sudan due to its proximity and the role it played in midwifing South Sudan’s secession from Sudan, South Africa has put up a fight to tap into business opportunities as the new country develops.
Mr Kosure said Kenya has greater bargaining power to clinch most of the deals in the pipeline as the country seeks to build infrastructure for the new capital city, Ramciel.
“We are helping South Sudan set up its administrative structures, and this is the first country that comes to their mind when they think of any materials or goods for supply,” he said, adding that “the argument that the Lokichoggio border is porous and will allow for smuggling of commodities is self-defeatist and is making us lose a lot of business.”
The African Development Bank has given the government Sh1 billion to carry out design work for the road component of the Lamu Port-South Sudan-Ethiopia transport corridor project.
The 800-kilometre road is expected to run from Lamu to Lokichoggio. Experts expect the Lamu-Lokichoggio road to cost Sh66.4 billion.
Mr Kosure said the construction industry was one of the sectors bound to reap huge benefits given that Ramciel will need buildings, roads and other social amenities over the next few years to assume the shape of a city.
Although no official statistics exist to prove this, activity in the consumer segments like technology and the demand for automobiles is a sufficient indicator that there is a viable market in South Sudan.
The managing director of Kenya Ports Authority (KPA), Mr Gichiri Ndua, said recently that South Sudan ranks as the port’s second-biggest user after Uganda.
Imports to South Sudan through the port include oil, clinker, which is used to make cement, steel, bitumen for road construction and secondhand cars, while the main exports include tea, coffee, and horticulture goods.
The Export Promotion Council in conjunction with the Kenya Embassy in Juba and in collaboration with the ministry of Trade held an investments exhibition in South Sudan in March.