Sudan’s just ended referendum may have put war to
rest, but another fight appears to be looming. The
battle is for the untapped natural resources of the
region that may become a country, in July 2011.
There is a scrambling underway for the virgin land,
the petroleum, the iron ore, the copper, and other
minerals. It is also an attempt at filling the gap
in various sectors, from education and health to
construction and finance, that must be
The soldiers of this battlefront are businesspeople,
investors, and experts. Their origin is not far
away. Many come to Juba, the capital of what may
become the Republic of Southern Sudan (ROSS), and
from neighbouring countries – Ethiopia, Kenya,
Uganda, and Eritrea.
These undeclared battlefronts opened immediately
after the Northern and Southern forces of Sudan
signed the comprehensive peace agreement (CPA) in
Kenya, in 2005. Since the signing, calm has
prevailed in the semiautonomous region of Southern
Sudan, which had been a battleground between the
Sudanese army and forces of the Sudanese People’s
Liberation Army (SPLA), since 1983.
Businesspeople from Uganda and Kenya were the first
to arrive, followed by Eritreans and Ethiopians. In
the beginning, Ugandans and Kenyans were the sole
providers of almost every food item, including
tomatoes and onions, to Southern Sudan. Kenya’s
exports to the region almost doubled within four
years, since 2006. The country’s exports reached to
158 million dollars in 2009, up from 84 million
dollars three years before. Later, most of these
businesses were taken over by Eritreans.
When Binyam Yohannes, a businessman in Juba who was
one of the first from Ethiopia, arrived in the city
six years ago, Eritreans controlled almost
“They were doing better business than Ugandans and
Kenyans,” Binyam told Fortune.
Mulugeta Seifu serves as
main bank manager for BCB.
Eritreans initially became involved in the
underdeveloped hotel industry before they moved to
A total of 7,333 businesses are registered in the 10
state capitals of Southern Sudan, according to data
obtained from the Southern Sudan Centre Census
Statistics Evaluation (SSCCSE) office. Of the, 2,683
businesses registered in the capital, Juba, 84pc
constitute shops and restaurants.
Apart from places to spend money, savings
institutions form a big part. Big Kenyan companies,
such as Kenya Commercial Bank (KBC), spearheaded the
country’s business interests in Southern Sudan. It
formed a subsidiary company, KCB (Sudan) Ltd, almost
a year after the signing of the CPA. Its Ethiopian
counterpart, Commercial Bank of Ethiopia (CBE),
entered this market three years later, and while CBE
still operates out of a single branch in the
capital, KCB has 15 branches.
The Kenyan bank plans to increase this number to 19,
by June 2011, and double the current number in four
years, according to media reports.
This opportunity was possible because the region is
very underdeveloped and hugely lacking in
infrastructure. Southern Sudan has been shattered by
a civil war that has raged since 1955. Whatever
little infrastructure existed prior to the conflict
was either destroyed during the war or completely
neglected. However, since the suspension of
hostilities, the region has received over two
billion dollars from oil revenues while the
international community has annually pumped in close
to one billion dollars.
However, the government that commands these
resources is not monolithic, and suffers from a
limited capacity, according to a study conducted by
the University of California.
This appears to have presented an opportunity for
the neighbours to take advantage. Uganda is doing
well in Southern Sudan, even better than Kenya.
In 2009, Uganda exported 184.6 million dollars worth
of goods to Southern Sudan. The country did not stop
there, and has already prepared the groundwork to
fill the increasing appetite of consumption in the
region, which has a population of 8.26 million and a
GDP per capita of 130 dollars.
The Uganda Investment Authority (UIA) is in the
process of establishing an industrial park for
manufacturers, targeting the Southern Sudanese
market in Gulu Town, located 120km from the border.
“We are still negotiating with the Gulu Town Council
to acquire land to set up the park,” Doris Mitti
Kimuli, deputy director of Communications and Public
Relations at the UIA, told Fortune by email. “No
work is being done, although the plan is to
establish a park in the not too distant future.”
Besides preparing for the future, the Ugandan
government is taking steps to ease cross border
trade between the two neighbours. Apart from
building infrastructure and providing export
incentives, the government encouraged Ugandans to
invest in Southern Sudan.
“The Ugandan government offers export incentives to
businesspeople seeking to invest in Southern Sudan,”
The government is applying tax incentives under its
export promotion schemes for producers to export.
These incentives are in the form of “manufacturing
under bond” and “duty drawbacks.”
The first scheme allows manufacturers to seek custom
permits to hold and use imported raw materials
intended for manufacturing for export in secured
places without the payment of taxes. It also avails
working capital, which would have been tied up
through with duties immediately after importation.
Telecommunications is another underdeveloped sector
in Southern Sudan. One of the five companies
providing telecom services, Vivacell, employs 30
Ethiopians in its technical and finance departments.
The second scheme is a refund of all or part of any
import duty paid on imported inputs to produce
export goods. Duty tax may be refunded on raw
materials imported and used on the goods locally
produced for export.
With encouragement like these, and most of its other
neighbours also scrambling for the emerging market,
Ethiopia is hardly visible. Ethiopian businesses
have only a small piece of a large pie, and their
presence is limited to big towns. Yet, experts among
them appear to be well represented.
Many are employed by UN agencies and NGOs. Some hold
key positions or lead these organisations, while a
few are working in government institutions, of whom
a handful had the opportunity to advise some of the
31 ministers in the government.
Hailemelkot T. Giorgis, who formerly served as state
minister for Capacity Building (MoCB) as well as
Defence (MoD), is now an adviser to the Ministry of
Finance and Economic Planning (MoFEP). Alebel Derib
is also serving as an adviser, in the Ministry of
Education (MoE), while Minweyelet Mussiee (PhD), a
former advisor to the Ministry of Agriculture and
Forestry (MoAF), heads the UN Food and Agriculture
Organisation (FAO) office in Southern Sudan.
Top officials in the government admit that the
presence of Ethiopian experts plays a significant
role in addressing the government’s chronic shortage
of skilled technocrats.
Only 12pc of the working population are paid
employees and half of the population is under the
age of 18, according to the SSCCSE.
“The Ethiopians we hired are experts,” James Hoth
Mai (Gen), chief of staff of the SPLA, said during
an exclusive interview with Fortune earlier this
month. “The government of Southern Sudan also has
advisors and consultants.”
Apart from government institutions, the number of
the Ethiopian experts is increasing in private
businesses. Observing the composition of the staff
in Buffalo Commercial Bank (BCB), a local bank, and
a mobile phone operator, Vivacell, they could
misleadingly appear as companies belonging to
Vivacell employs 30 Ethiopians. Buffalo, one of the
five local banks operating in Southern Sudan,
employs 10 Ethiopians, including Alemu Abera, its
managing director who has 30 years of banking
Mulugeta Seifu is one of the Ethiopian employees at
Buffalo, currently serving as the main branch
manager of the bank. He had served in various banks
in Ethiopia and was service manager at CBE for 10
years. Like some of his colleagues from CBE,
Abyssinia, Nib International, as well as
Construction and Business banks, he applied for the
job after seeing the vacancy announced in a
When he arrived in Juba, in February 2009, he was
not sure whether he could work in such a dusty and
underdeveloped town. Two years later, Mulugeta is
considering opening his own business.
After being promoted to the manager of Buffalo’s
main branch, his salary increased to seven times
what he had been earning in Ethiopia. He believes
that if the existing peaceful situation continues,
there is promise in Southern Sudan.
“You could earn enough money, even from an ordinary
business, such as a tea room,” Mulugeta told
An estimated 2,000 Ethiopians live in Southern
Sudan, and most of them trade commodities or work in
the service sectors. Only a few enter business.
The region after the referendum will present an
equally attractive opportunity to Ethiopian
exporters and those interested to work there, Negash
Legesse (Col), Ethiopia’s consulate general for
Southern Sudan, believes.
Ethiopia shares a long border of 1,400km with it.
Gambella, Benishangul, and the Southern Regional
State border the Upper Nile, Jonglei, Western
Equatorial and Blue Nile states of Southern Sudan.
“We can participate in capacity and institution
building,” Negash said. “There is a vast market for
our export products, too.”
Many Ethiopians see enormous opportunity in the
fledging finance sector; so much is still expected
from this industry. In an emerging country where
only one per cent of households have bank accounts,
the future of banking seems lucrative.
Before the start of the war, about 20 years ago,
only one bank operated in the region. This number
increased to four during the war. After the signing
of the CPA, the number of local banks reached five
and there were three foreign banks, including CBE.
BCB is one of the two latest additions to the
banking sector. Established in 2008 by Southern
Sudanese businessmen with a paid-up capital of six
million dollars, BCB has three branches.
Andrew Mayen Akuak, deputy general manager of BCB,
credited Ethiopians with the success the bank has
achieved. Their expertise in international banking
and their experience in trade financing was praised
by him. He also attributed the new practice of using
letters of credit (LCs), instead of cash while
travelling to import goods, to the arrival of the
“Ethiopians are honest, loyal, and committed to
their work,” Andrew told Fortune. “They have the
expertise to do what is required.”
The expertise seems much needed and appreciated in
the telecom sector, as well. The Lebanese telecom
company, Vivacell, brought Ethiopians to Juba to
work in its technical and finance departments.
Joining the company when it was first established,
in February 2009, the footprints of Ethiopians are
visible in every part of the technical section. They
work on the Internet, programming, system
administration, network system installation, and
However, some have left to complete their higher
education, while others have travelled to Europe and
the US for work.
“The salary is not that attractive,” an Ethiopian
employee told Fortune, on condition of anonymity.
With its two offices in the capital and several
points of sales (POS) throughout the country,
Vivacell serves the people of Southern Sudan along
with five other telecom service providers.
Like the banking sector, telecommunications has not
yet developed in Southern Sudan, with only 15pc of
households owning a phone, although the figure
increases to 59pc in urban areas, according to the
There were 9.5 million estimated mobile subscribers
in 2009, according to reports from Mobile World.