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Seeing opportunities in South Sudan

January 13, 2011

SUDAN/The chief executive of Kenya Commercial Bank Martin Oduor-Otieno had an extra-ordinary business trip six years ago.

The then deputy CEO of the bank led a party of five executives to Juba, South Sudan to assess the possibility of opening a branch there to serve the region after a peace deal was signed to end a war between the north and the south, which had lasted more than two decades.

The bankers slept in tents pitched along the Nile. When they came across a shop that looked as if with the addition of grills and partitioning could be converted into a bank, they walked around town asking for its owner.

After a meeting, terms were agreed and they promptly pooled all the cash they had to raise a rent deposit.

Six years on, Kenya Commercial Bank, Kenya’s largest bank by assets, has 15 branches and 10,000 customers in the region, generating millions of shillings in profit. Plans for doubling the number of outlets and raising customer numbers to 100,000 depend on the outcome of the ongoing vote on whether the region will secede from the north and become Africa’s newest country.

Other Kenyan firms, from other listed banks to small contractors have followed the bank to tap the opportunities in South Sudan in the last six years. But the referendum, the last part of the peace deal, has brought renewed interest around the region.

Even Kenya’s media have temporarily turned their glare away from the country’s political class and its frequent high drama to focus on the historic vote across the northern border.

The common theme in all the coverage in regional media is the economic opportunities lying in the new country in form of trade and investments as a state is built from scratch.

Kenya’s exports to south Sudan almost doubled between 2005 and 2009, rising to 12.8 billion shillings ($158 million) from 6.8 billion after south Sudan rebels signed a peace agreement with Khartoum’s administration.

With a planned transport corridor linking a second Kenyan port at Lamu with Juba, that figure could rise much further after secession.

The story is similar in Uganda, which had the highest share of exports to South Sudan at $185 million in 2009.

The wider East Africa region could also benefit through the expansion of its five-nation EAC common market, should voters in South Sudan, as widely expected, choose independence and thereafter elects to join the market. The market has a combined population of 126 million people and a GDP of about $75 billion.

How do you assess the potential benefit of an independent South Sudan to the region? Could a scramble for opportunities annoy Southern Sudanese and breed resentment for its neighbours?

Picture: A member of Sudan People’s Liberation Movement at a check point in south Sudan. REUTERS/Zohra Bensemra

Its proper for the neigbhouring countries to heip southern sudan get on its feet.By spotting opportunities where both parties can benefit is beneficial for the region as a whole.

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