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Arab League conference bolsters South Sudan investment - Daily News Egypt

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Arab League conference bolsters South Sudan investment

JUBA: Political stability is typically viewed as a prerequisite for attracting foreign investment. In the case of Southern Sudan, however, economic development spearheaded by foreign investment may just be the precursor for sustainable political stability. Investors flocked to Juba on Tuesday to explore the potential business ventures touted by the Government of South Sudan (GOSS), …


JUBA: Political stability is typically viewed as a prerequisite for attracting foreign investment. In the case of Southern Sudan, however, economic development spearheaded by foreign investment may just be the precursor for sustainable political stability.

Investors flocked to Juba on Tuesday to explore the potential business ventures touted by the Government of South Sudan (GOSS), in the hope that development will prop ongoing peace efforts.

But even as the first Arab Investment Conference in Southern Sudan got underway, the future of North-South unity still hangs in the balance.

Salva Kiir, president of GOSS, said resolutely at the conference opening that the January 2011 referendum “shall lead to either confirmation of unity or secession.

While the unity of Sudan will be made attractive to the people of the South, he added, the final decision will be taken solely by the people of Southern Sudan.

“If the South secedes from the rest of the country, it is not going to shift to the Indian Ocean or the Atlantic coast. The borders will be the longest borders along which livelihoods, grazing, commerce and trade shall continue to flourish, Kiir said.

The ambivalent future, however, did not deter investors nor did it shift the stance of the Arab League, which sponsored the conference and led a delegation of Egyptian businessmen and media to Juba.

Arab League Secretary General Amr Moussa told Daily News Egypt, “We all hope that the referendum will confirm the unity; if it does not, we hope that the secession [of the South] will be cordial and that there will be [continued] relations between North and South.

Asked whether the Arab League would still encourage and support investments in the area, Moussa said, “We will continue because . they [North and South] will be in the same vicinity. .They cannot live separately, so in this light the Arab League will continue its work.

“A secession will create an abnormal situation, at least in the beginning, it might affect [political stability], but it is our intention to continue because they are our brothers and our neighbors.

Kiir told the conference that “prolonged and precarious civil wars in Southern Sudan have inhibited development and slowed it down in the whole of Sudan. Development is about production and construction, but war is nothing but destruction. It is development in reverse.

“However, we are not here to cry over spilled milk, we are here to explore possibilities to work together to compensate for wasted opportunities and make up for time wasted during the civil war.

He spoke of Southern Sudan’s favorable agricultural climate, 50 percent cultivable land, its animal wealth, untapped mining resources, forests, natural parks and abundant oil, but stressed that “oil wealth will only be an add-on and not an alternative to agriculture.

Corruption will no longer be tolerated, he said, adding that the Anti-Corruption Commission has already relieved some officials from their posts.

Opportunities aplenty

Foreign business owners already operating in the area concurred with most of what was said by GOSS officials: It’s a safe place to be, return on investment is guaranteed, projects of all kinds and sizes are needed and welcomed, and no mater what the outcome, the South will never sever ties with the Arab world.

In return, prospective investors came armed with ideas and the willingness to spend millions of dollars on projects in sectors as diverse as tourism, agriculture, infrastructure, healthcare and education.

Emmanuel Bol Kuanyin, secretary general of the Southern Sudan Investment Authority (SSIA), outlined the measures taken to create a business-friendly environment, namely the formation of an investment authority in 2006 and passing the Investment Promotion Act in 2009.

According to the law, both local and foreign investors can own and operate businesses except in areas the government deems strategic. It also guarantees against expropriation; protects intellectual property rights; allows repatriation of capital, profits and dividends; and sets regulations for dispute resolution.

Investors also have access to benefits and incentives – relating to taxes, licenses and customs – when operating in key sectors, among which are infrastructure, agriculture, energy, mining, forestry, telecom, transportation and banking.

He also highlighted improvements in infrastructure, though still very much lacking and in need of further development, and the existence of six mobile telecom operators.

Moussa then told participants some members of the delegation will stay behind for “further discussion and on-the-spot agreements.

Tracking results

By the mid-day Tuesday, it was announced that Banque Misr is looking to open a branch in South Sudan, and the proposal is currently in the works. Only eight banks currently operate in the area, four of which are foreign.

Mostafa El-Guindy, businessman and independent member of Egypt’s People’s Assembly, reiterated the need to create an entity that would insure investments.

“This should be done immediately, to create an insurance company for investors, and this should be in every country. Egypt should create an insurance company for the Egyptian investor going to invest in strategic countries that are very important to the national security of the country, he told Daily News Egypt.

El-Guindy’s investments in the area are focused on building barges to ease transportation via the Nile.

“To start investment in Sudan you need infrastructure, and that should start with roads. And as it’s a huge country…I proposed that we start by building the barges between Juba and Khartoum because it’s navigable, he said.

Five barges have already been provided for the government and the aim for the first phase of investments is to provide 50 barges each at 500 tons and costing $3.5 million.

In the long run, the plan is to provide South Sudan with 200 barges.

“We have the support of Banque Misr and from investors.this will benefit all investors and help the South transport materials it needs for construction and reconstruction, El-Guindy said.

Another Egyptian businessman, Wahib El-Miniawy, consultant on economic development at Societe Nationale D’Investissement (SONID), told Daily News Egypt that his company is willing to spend $500 million on large-scale infrastructure projects.

Dr Karim Qulqeila of the Egyptian Eye Academy also said that they are willing to bring their business model to Sudan.

In the works

The directors of developer Abu Malek Companies and Agoncies Ltd. told Daily News Egypt that the company is pioneering an infrastructure project to build 14 self-sufficient cities across the 10 states of South Sudan.

The investment cost is a staggering $10.1 billion, Reynaldo Santos Deyto, head of engineering, told Daily News Egypt, and they are looking for “parallel investments from the private sector to reciprocate the same amount.

AMC is also awaiting approval for an international airport in the South. “Our company has already budgeted an investment for the international airport at the amount of $3 billion, we’re waiting for the ministry of transport for the location, Amando Cabana, international business development director, said.

Each city will have 16 million square meters of land, Deyto said, and the target is to accommodate 147,000 families in total. They have also allocated “1,500 housing units free in every city for the poorest of the poor, Deyto added.

“If you build an [exclusive] city, the poor people you leave behind will just squat on the perimeter. What you can do is bring them in, give them housing and jobs, he added.

Based in Juba, the company is owned by a local businessman, Moter Malek Malek, who serves as its chairman and CEO, with Deyto and Cabana, who hail from the Philippines, as partners in the firm.

AMC is in the stage of finalizing their partnership agreement with the government and construction on the project is slated to start in August.

Topics: FJP

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https://www.dailynewsegypt.com/2010/02/25/arab-league-conference-bolsters-south-sudan-investment/
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