“Smart investors, savvy analysts and individuals familiar with emerging markets know that southern Sudan is poised to become Africa’s next best bet.”
Southern Sudan yesterday began voting in a referendum to determine whether to remain part of a united Sudan or become a separate state. The referendum was a core component of the 2005 Comprehensive Peace Agreement (CPA) that ended decades of conflict between the Southern Sudan People’s Liberation Movement (SPLM) and the Khartoum government.
Cement manufacturers are hoping for an increase in demand from the south as the region develops its infrastructure.
Pradeep Paunrana managing director of Kenya’s Athi River Mining, producer of the Rhino cement brand, told Business Daily that southern Sudan will see considerable economic development over the coming years and that cement will be central to improving infrastructure.
East Africa Portland Cement managing director Kephar Tande said his company is also very interested in the southern Sudan market but that any investment is dependent on the outcome of the referendum.
Reuters reports that Kenya Commercial Bank (KCB) expects to double its branches in southern Sudan if the region manages to conduct a successful referendum.
One of the few major foreign investments in southern Sudan over recent years has been SABMiller’s Southern Sudan Beverages Ltd (SSBL) brewery in Juba.
The brewery produces White Bull lager and Chairman’s Extra Strong Beer as well as the Club Minerals Sparkling Soft Drinks range and Source Pure Drinking Water. SSBL has also announced it will also start production of two of SABMiller’s existing brands Nile Special Lager and Club Pilsner.
“The decision was taken to produce in southern Sudan primarily for two reasons. One, the market size had the potential to support [the] local production of beverages, and two, the investment climate was right for us to invest in southern Sudan. We are the first major multinational company to invest in southern Sudan and we have thus become the case study for anyone else to base their investment decisions on,” Ian Alsworth-Elvey managing director of SSBL told South Africa’s Carte Blanche television programme.
Kenya’s East African Breweries Ltd (EABL) is also set to establish a brewery in southern Sudan. EABL last year said that it plans to build a 700,000 hectolitre (hl) plant in Juba, which can be expanded to 1 million hl.
Many business people are, however, adopting a wait-and-see approach.
According to the newspaper, Ugandan traders in southern Sudan have reported cases of harassment and human rights abuse by security officers and influential people in the region.
Adel Ali chief executive of United Arab Emirates-based Air Arabia told Reuters that southern Sudan needs significant infrastructure development before the region’s aviation industry can really be developed.
Air Arabia has been operating flights to Khartoum since 2004 but has no immediate plans to service the south.
Ali added that although southern Sudan’s aviation sector holds possible potential for investment, more clarity is needed on the new government’s investment plans.