Kenyan investors exposed to risks

Kenyan investments worth billions of shillings in South Sudan could be at risk following the attempted coup in Juba two days ago.

Kenya Bankers Association Chief Executive Habil Olaka on Tuesday said potential risks to businesses could be looting by soldiers or citizens in the absence of law and order.

However, he said, by yesterday no bank had reported disruption or interruption of its operations but they were watching the situation keenly.

BIGGEST INVESTORS

Local banks are arguably the biggest investors in South Sudan and any likelihood of political unrest would cause them massive losses.

Kenyan banks including Kenya Commercial, Equity and Cooperative have a presence in South Sudan. KCB entered South Sudan in 2006 and had a market share of about 42 per cent as at the end of 2012 financial year.

It has 21 branches with about 113,278 customer accounts , and its total assets in South Sudan stood at Sh31.8 billion in 2012.

In October this year, Cooperative Bank started operations in South Sudan. The bank, operating as the Cooperative Bank of South Sudan under a joint venture in which Kenya’s Coop Bank owns 51 per cent with 49 per cent being held by the South Sudan government, plans to have a presence in all the country’s 10 states.

In 2012, Equity Bank invested Sh1.2 billion in its South Sudan subsidiary.

Some of the other local firms operating in the country are UAP Group and East African Breweries Limited, Bidco and two local airlines— Kenya Airways and Fly540.

But with the uncertain political climate in Juba, the gains that local companies and other businesses continue to make in South Sudan remain at risk.