South Sudan Open for Business
Anuol Deng Kuoreng, Barrister at Law and Founder and Managing Partner of Awatkeer Law Chambers in South Sudan, discusses some of the challenges to operating in Africa’s youngest country, as well as some of the opportunities for investors.
What are the main challenges to operating in South Sudan from a business and legal perspective?
Besides the current security challenges, some of the other main challenges facing South Sudan are lack of capacity, infrastructure and communications systems. The two decades of civil war deprived our people of the right to a quality education, and an opportunity to acquire quality skills and knowledge, leaving us with fewer experts or no experts at all. As a result, human capacity is a big issue.
Shortly after the Comprehensive Peace Agreement was signed in 2005, due to factors attributed to the long decades of civil war, our manpower was scattered all over the world, leaving us with no highly skilled people to efficiently drive forward our economy or kickstart our government. It has been rare in South Sudan in the private sector or government institution to find people with quality skills to deliver quality work. The decades of civil war also denied us the right to good infrastructure and as such South Sudan has the worst road network system in the world. Besides mobile phones, there is no good Internet or landline telephone system, making it practically impossible for businesses to operate efficiently. Apart from these challenges, there is a lack of properties to rent, as the few offices and residential accommodations are are very expensive. Another big hurdle that hinders business is lack of electricity. The country still runs on individual generators providing electricity and this frustrates smooth operation of businesses.
It is clear that if you look at the input and the output, the profit will be very minimal because of the high costs of doing business. This becomes frustrating for those that want to operate efficiently and contribute positively to the overall economic development of the country. However, I term these challenges ‘inspiring challenges,’ as they are not challenges that will prevent an inspired investor from doing a profitable business. They can be contained and addressed, but not ignored. For motivated or visionary open-minded investors, these challenges also create opportunities to invest in key sectors. Legal challenges in South Sudan relate to a lack of well qualified legal practitioners to provide informed legal advice to investors or institutions, but this can be corrected through the establishment of a local law school.
What is being done to improve the investment environment?
South Sudan has done a lot to attract foreign investment. If you were to look at Juba in 2005, it was basically a forest, because the region of Southern Sudan was severely deprived of development by the Khartoum government. Now, there is progress. Why is this? The government started an initiative to create a system that was affordable and attractive for investors. Because of this South Sudan is one of the easiest places in the world to set up a business. The government made it very affordable, whether you are a local or international investor; and there are fewer hurdles.
Another way the government has encouraged business is the taxation system. The tax regime in South Sudan is not as aggressive as in other countries. The government also set up the South Sudan Investment Authority. One of their biggest successes was an investment conference in Juba before war broke out in December 2013. This investment conference attracted over 500 major companies from around the world, most of which were excited to start investing in South Sudan in the following year. Unfortunately, the outbreak of the current conflict in December 2013 really interrupted a lot of things in South Sudan including the planned entry of such companies. However, the government has continued to try to stimulate the business environment, because they recognize that creating a strong economy and creating jobs is a crucial part of ending the conflict. Peace cannot come through negotiations or by use of violence but through development.
This interview excerpt is part of the Africa Energy Series: South Sudan 2017 book, which will be released at Africa Oil & Power in Cape Town from June 5-7; and is also part one of a two-part interview. Part two of the interview will be published next week, and the interview with Anuol Deng Kuoreng, Barrister at Law and Founder and Managing Partner of Awatkeer Law Chambers, will also be available in the Africa Energy Series publication.
Mr. Kuoreng is the moderator for the South Sudan Market Spotlight at Africa Oil & Power.