Report On South Sudan Market Survey.pdf

HORTICULTURAL CROPS DEVELOPMENT AUTHORITY P.O BOX 42601, NAIROBI 00100 GPO TEL: 254-2-2088469 / 254-2-203555398 FAX: 254-2-203555395

REPORT ON SOUTH SUDAN MARKET SURVEY 22ND APRIL 2012 TO 27TH APRIL 2012

Aerial view of South Sudan BY AGNES WAINAINA MARKETING OFFICER

South Sudan Market Survey-April 2012

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TABLE OF CONTENT 1.0 BACKGROUND……………….…………………………….…………….3 2.0 OBJECTIVES OF THE SURVEY…………………….………….….….4 2.1Why Southern Sudan…………………………………………….…..…4 2.2 Methodology………………………………………………….….….…5 3.0 VISIT OF THE MARKET SURVEY…………………………………….6 3.1 MINISTRY OF AGRICULTURE………………….……………….……6 3.2 KONYOKONYOMARKET…………………………………..….….……7 3.2.1 Vegetables prices in South Sudan pound (Exchange rate Ksh 31 per pound)………………………… …..…9 3.2.2 Fruits Prices in South Sudan Pound (Exchange rate Ksh 31 per pound)…………………….……….. …9 3.3 SOUTH SUDAN CHAMBER OF COMMERCE………………..…….10 3.3.1 Procedures for starting a business in South Sudan……………….10 3.4 VAMP SUPERMARKET…………………………………………..…....14 3.5 MINISTRY OF COMMERCE……………………………….……….….14 3.6 MINISTRY OF JUSTICE………………………………………………...15 4.0 SOUTH SUDAN AGRICULTURE………………………………..…….15 4.1 LAND OWNERSHIP……………………………………………………..16 4.2 WATER SOURCES………………………………………………………16 4.3 TRADE AGREEMENTS AND TRADE……………………….……….17 4.4 INVESTMENT………………………………………………..…………..17 4.5 TECHNOLOGY IN SOUTH SUDAN……………………..…….…..…18 4.6 MINERALS………………………………………………………….……18 4.7NATIONALITY…………………………………………………….…….18 5.0 PESTEL ANALYSIS…………………………………………………....19 5.1 SWOT ANALYSIS……………………………………………..…..……20 6.0 ISSUES BETWEEN SUDAN AND SOUTH SUDAN…………….….26 6.2 CHALLENGES OF INVESTING IN SOUTH SUDAN…………..…26 7.0 RECOMMENDATION…………………………………………..…..…28

South Sudan Market Survey-April 2012

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1.0 BACKGROUND The total area of South Sudan is 644,329 square kilometer.It has ten state named as follows:-Upper Nile, Jonglei, Unity, Warrap, Northern Bahr-El-Ghazel, Western BahrGhazel, Lakes, Western Equatoria, Central Equatorial and Eastern Equatorial, with a population of 8,260,490 people. South Sudan gained its independence from Sudan on 9th July 2011 following the referendum that was carried out on January 2011 this was after the CPA that was signed in Kenya in 2005.The president of this country President Salva Kiir Mayardit and the capital city is Juba with an estimated population of 350,000 people it is located in the Central Equatorial State. The official languages are Arabic and English a and the currency used is South Sudan pound which has an exchange rate of Ksh. 31 to one South Sudan pound. Kenya borders South Sudan to the Eastern Equatorial state. The population per state is as indicated in the table below:Population Distribution by State State

Population

Males

Females

Households

964,353

525,430 438,923

142,438

1,358,602

734,327 624,275

192,424

Unity

585,801

300,247 285,554

71,067

Warrap

972,928

470,734 502,194

169,505

Northern Bahr-El-Ghazel

720,898

348,290 372,608

133,563

Western Bahr-El-Ghazel

333,431

176,895 156,536

58,691

Lakes

695,730

365,999 329,731

92,323

Western Equatorial

619,029

318,469 300,560

116,336

Central Equatorial

1,103,592

581,544 522,048

179,071

Eastern Equatorial

906,126

465,365 440,761

153,851

Upper Nile Jonglei

South Sudan Market Survey-April 2012

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2.0 OBJECTIVES OF THE SURVEY:1.

To link Kenya producers, traders and exporters to the potential market of South Sudan.

2

To identify major importers/traders/distributors

3.

Consumption trends in volumes and values

4.

To identify and document Economic, Social, Cultural and Political environment of the region which are key ingredient for viable/attractive market.

2.1 Why Southern Sudan:

Kenya’s main horticultural exports have largely depended on its traditional markets of European Union has over the years being increasingly becoming very competitive as more countries especially those from Northern Africa (including Tunisia, Morocco, Egypt and others) continue to penetrate this market with very competitive prices due to their proximity and low freight costs. In addition these traditional markets have continued to impose as lot of tariffs and non-tariff barriers on our horticultural exports in terms of Global Gap requirements and environmental issues such as Food Miles and Carbon emission. There is also an increasing campaign in the European Union countries for consumers to buy and eat more of home produced agricultural products as compared to imported products.

As a result of these issues it has become increasingly necessary for Kenya as a country to re-look and develop strategies for the sustainability of the country’s horticultural exports. Some of these strategies include diversification of markets in the Middle East, Asia, and more important the regional markets in Africa. These markets are more accessible and do not have a lot of stringent measures on the exports like the European Union. Kenya’s horticultural exports have been mainly concentrated in the Eastern and Central regions due to their long history of horticultural production and their proximity to South Sudan Market Survey-April 2012

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J.K.I.A Airport. Horticulture production has over the years become an important subsector in other parts of the country and especially in the Western and the Northern parts of the country. However, despite the increase in the production marketing of these products and especially the exports products has posed some great challenges due to the long distance to the export exit points and the huge transport costs. This has necessitated the need to look for alternative export market especially in the regional market.

According to a recent market survey by Export Promotion Council it’s evident that the regional market has become an important market. There is a lot of potential for horticultural export to South Sudan. 2.2 METHODOLOGY USED I conducted interviews with the following respondents: 

Relevant Ministries (Trade,Justice,Commerce,Chamber of Commerce,Inverment and Agriculture):-

-

Ministry of Commerce, Industry and Investment-Mary Akech Taban MillaDirector for private Sector Development.

-

National Bureau of Statistics-David Chan Thiang-Director,Economics Statistics

-

Ministry of Justice-Hon.Laku Loggale Legge-Counsel General Mary Ajith-1st Legal Counsel

-

South Sudan Chamber of Commerce Industry and Agriculture-Charles M. Anyama-Capacity Building Consultant.

-



Ministry of Agriculture-Director of Horticulture

Embassy staff in South Sudan including the AmbassadorAmbassador Cleland Leshore-Ambassador of Kenya to South Sudan.

South Sudan Market Survey-April 2012

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

Open Market-Konyo konyo market and Jabel Market



Trade and business people-

Vamp Supermarket(Vegetable and meat products)-Ellen Ermita-Manager

-

JIT supermarket-T.Rakesh-Manager

3.0 VISITS OF THE MARKET SURVEY 3.1 MINISTRY OF AGRICULTURE The Ministry of Agriculture is mandated with promoting agriculture in South Sudan. It has different departments one being the department of plants and the department of horticulture among others. My main concern was in the department of horticulture mostly on the importation of horticultural produce to South Sudan. It was observed that to export horticultural produce or seedlings you require clearance documents from the Ministry of Agriculture who will then issue you with a letter to start importing seedlings to South Sudan. Some of the horticultural activities or agricultural activities that the Ministry of Agriculture has carried out since its establishment include extension services on states levels which goes down to the few farmers in the state. Currently the Ministry has introduced green house farming with the pilot project being carried out in Rajafis for 10 green house farming, this is the first green house farming in South Sudan introduced by M/s Amiran, and this is an opportunity to establish green house farming for other horticultural crops. There are three progressive horticulture growers growing traditional vegetables along river Nile. The identified areas for horticulture are the Western Equatoria State, Eastern Equatorial State, Central Equatoria State, Jongue state and Unit state.

South Sudan Market Survey-April 2012

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There is a planning department under the Ministry of Agriculture who collect prices from the whole of South Sudan and upload to www.climis.com

3.2 KONYOKONYO MARKET This is one of the major open market for horticultural crops located in the heart of Juba city with most of the horticultural crops being imported from Uganda via North Uganda from Kenya through the Nemule boarder of South Sudan and Uganda border. Most of the fruits and vegetables being sold in South Sudan come from Uganda e.g. banana, cabbage, pineapples, onions. Kenya exports mostly carrots, mangoes, apples and oranges.

South Sudan Market Survey-April 2012

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Traditional vegetables e.g. the amarathus are the most grown vegetables in South Sudan along river Nile. They only buy flowers during festivities from Kenya which is flown by air, there is however no vending of flowers in South Sudan ,this gives Kenyans an opportunity to look into exporting flowers to South Sudan and vending the flowers. To bring goods to South Sudan i.e. the Central Equatorial State the goods pass from Nemule border which are taxed approximately 20 South Sudan pounds per bag ,the bags or sacks are also taxed at Mesitu in Juba at approximately 5 South Sudan pounds per bag. This makes a sack go for approximately 600 to 400 South Sudan pounds. This is around Ksh 18,000/= to Ksh 12,000/= per sack. There is also imports from Sudan Khartoum of onions at 550 South Sudan pounds and French beans from Uganda and Kenya. There are revenue authorities established for each state from Nemule border to the Central Equatorial State where they are taxed by the Central Equatorial State which is the state that Juba is situated in. Prices are not controlled by the government it depends on the market forces of demand and supply.

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3.2.1 Vegetables prices in South Sudan pound (exchange rate ksh 31 per pound) Item

Unit

Irish potatoes

100kg

Cost in SSP 280

1 bucket

45-50

1,395-1,550

1 sack

600-700

18,600-21,700

1 bucket

50-60

1,550-1,860

Cabbage

1 pc

8.00-15

248-465

Carrot

1kg

6.00-8.00

186-248

Dry Cassava

1 sack

240

7,440

Jews Melon(mulukhia)

1 sack

400-500

12,400-15,500

Okra

1 sack

800-900

24,800-27,900

Tomatoes

1 kg

10.00-12.00

310-372

Cow peas

1 sack

480

14,880

Ground nuts

1 bucket

65

2,015

Onion

1 Fresh cassava

sack(100

kgs)

Kshs. 8,680

4,960 160

3.2.2 Fruits Prices in South Sudan Pound (exchange rate Ksh 31 per pound) Item

Unit

Cost in SSP

Kshs.

Paw paw

1pc

5.00-10.00

155-310

Avocado

1 pc

2.00-4.00

62-124

Pumpkin

1pc

10.00-15.00

310-465

Watermelon

1pc

15.00-20.00

465-620

Banana

5pcs

5

155

Orange

1 pc

3

93

Apple

1pc

2

62

Passion fruit

5pcs

10

310

Dates

1kg

8

248

Pineapple

1pc

5.00-10.00

155-310

South Sudan Market Survey-April 2012

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3.3 SOUTH SUDAN CHAMBER OF COMMERCE The South Sudan Chamber of commerce is the first stop for any Kenyan or foreigner wanting to establish a business enterprise in South Sudan. The following are the procedure of obtaining a business document in South Sudan:

To start an international company you need a letter from the Ministry of Foreign Affairs in Kenya written to South Sudan Foreign Affairs.



Foreign Affairs will then write to the registrar of companies in South Sudan and Ministry of Justice.



All companies should have 31% local shareholding and 69% foreign shareholding.



To export horticulture products once you have registered a company and gone through all the procedures you register with the Ministry of Agriculture.

3.3.1 PROCEDURES FOR STARTING A BUSINESS IN SOUTH SUDAN:Procedure 1:

Reserve the company name at the Business registry (Government of South Sudan) and pay the fee. Duration:1 day Cost:15 SDG Legislative Comments: Article 10.0 of the registration of business names Act (2008) regulates of business names. It is noted that the Business Registry applies it extensively.

Procedure 2:

Prepare the company documents before an advocate. Duration: 2 days

South Sudan Market Survey-April 2012

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Cost: 2,500 SDG Legislative Comments: The use of an Advocate is optional by law(Article 17.2 Companies Act 2003 requires a statutory declaration regarding the particulars of the company by an advocate or the director or the secretary of the company).However the business Registry in practice requires it to be done by an Advocate(registered lawyer). Procedure 3: 

Apply for approval of the company registration at the Business Registry (Government of South Sudan) and pay the fee. Legislative Comments: Article 15-17 Companies Act 2003 established registration requirements for companies and contains statutory memorandum and articles of association.

Procedure 4: 

Pay the registration fees and obtain the certificate of incorporation from the business registry(Government of South Sudan) Duration: 1 day Cost: 821 SDG Comments: On completion of the application and approval, the entrepreneur pays the fee to obtain the Certificate of Incorporation.

Procedure 5: 

Obtain an operating license from the Directorate of Trade and Supplies(State Government of Central Equatorial.) Duration: 2 days Cost: 2000 SDG

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Legislative comments: There appears to be no specific regulation concerning this procedure however the Directorate of Trade establishes the fees through appropriation bills i.e. the Appropriation Bill(2009) article 85 of the Central Equatorial State Constitution (2006 as amended in 2008) provides the principle allowing the state to collect fees. Procedure 6: 

Obtain a Trading License from the payam (County Authority) Duration: 2 days Cost: 300 SDG Legislative Comments: There is no specific regulation covering this procedure but article 85 Central Equatorial State Constitution (2006 as amended in 2008) provides the general principle allowing the State to collect fees.

Procedure 7: 

Obtain a tax ID card and a Tax Clearance Certificate from Revenue Authority (State Government of Central Equatorial) Duration: 1 day Cost;1050 SDG(800 SDG State Development Tax + 150 SDG fee for Tax Clearance Certificate +90 SDG for Tax ID Card + 10 SDG Stamp Duty) Legislative Comments: There is no specific regulation governing this procedure, but the Revenue Authority of Central Equatorial establishes the fees through appropriation bills. In this case, Appropriation Bill(2009).Article 85 of the Central Equatorial State Constitution (2006 as amended 2008) and the State Revenue Authority Act(2007,amended 2008),provide the general principles governing the Revenue Authority to collect fees.

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Procedure 8: 

Register with the Ministry of Finance (Government of South Sudan) and obtain a Tax Identification Number (TIN) Duration: 1 day Cost: No cost Legislative Comments: This was introduced with the enactment of the Taxation Act 2009.Chapter III section 17 which established registration requirements.

Procedure 9: 

Registry with Ministry of Labour (Government of South Sudan) Duration: 1 day Cost: No cost Legislative Comments: Part X of the labour Act of Sudan (1997) as amended establishes that the company must deposit the basic and penalties regulations with the competent labor office.

Procedure 10: 

Open a separate bank account for social security payments. Duration: 1 day Cost: No cost Comments: As this time there is no social security fund administration or institution operating in South Sudan, in the interim the Ministry of Labour, Public Service and Human Resource Development issued circular (Circular J/5/21, March 22,2010) instructing companies to open a separate bank account to deposit social security payments until a new mechanism is formulated.

South Sudan Market Survey-April 2012

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Procedure 11: 

Obtain a company seal Duration: 1 day Cost: 90 SDG Legislative Comment: Article 108.b companies Act 2003 requires companies to obtain a company seal. The doing a business in Juba report, recommends reform in the procedure namely to improve access to information/publishing and regulation, streamlining procedures and reducing the cost of starting a business. According to the report US$ 3,077 is required for business registration in Juba and 36.8% of monies paid account for advocate is optional by law, the business registry requires it. A proposed alternative is for the business registry to encourage small and less complex businesses to register without an advocate if they choose to, relying instead on standardization formats for the memorandum and articles of association contained in the law.

3.4 VAMP SUPERMARKET This is the only supermarket selling horticulture products. They get their produce from Uganda. They challenge they are faced with is high transport costs if vegetables and fruits are gotten from Kenya as they have to pass through Northern Uganda to Nemule border to the Central Equatorial state-Juba. This makes it uncompetitive for Kenyan produce with Uganda produce as Uganda produce become cheaper than Kenyan produce. There is also the question of freshness as the Kenyan produce will not enter the market while fresh mostly for the vegetables .However a lot of cheers, meat processed and M/s Delmonte juices from Kenya is sold in the market. To establish a supermarket there are licences required:-

South Sudan Market Survey-April 2012

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1. Import license which is charged per tonnage imported, 2. Importers and exporters registration certificate which is 1000 dollars renewed yearly 3. Trade license issued per state renewed yearly. The cost of running business is expensive as refrigerators are run by generators which consume up to 3,000 dollars worth of diesel per year. 3.5 MINISTRY OF COMMERCE The ministry is mandated with the authority of facilitating trade. They are also mandated to establish market infrastructure in different levels this is only for the open market, the wholesale and retailers establish their own markets. There is a vision 2040 which is very ambitious that was established for the country. The different ministries have different strategic plan. The ministry requires that while one is establishing a company in South Sudan you gain acceptance from the Ministry of Justice for signing agreement with a local partner. They also require to see the Articles of Association, Memorandum of Understanding and the company profile. You are required to get an import licence, import export license and trade license which are issued by the State Ministry. A foreign investor may need to familiarize themselves with the investment act gotten from the Ministry of Justice or Ministry of Trade, Investment and Commerce. The duty on all goods is from 1-20% of the cost while VAT is less than 20%. 3.6 MINISTRY OF JUSTICE The businesses or companies established to do import business in South Sudan have to be registered by business registrar at the Ministry of Justice. 4.0 SOUTH SUDAN AGRICULTURE The land in South Sudan is fertile and the climate is conducive planting. The rains are from April to October while the rest of the months is sunny. South Sudan Market Survey-April 2012

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

The green belt which is the Eastern Equatorial State, Western Equatorial State is good for agriculture with good weather the rest of the land is good for pastoralist.



Land is owned by the private individuals, community and government although technically the government doesn’t own land. To farm in South Sudan you lease land from the community and the private sector.



The horticultural produce imported is mostly meant for urban areas the bulk of consumers are foreigners living in the urban area. The rest of the population is pastoralist.



Lately there has been introduction of vegetable production in along river Nile with most of the vegetable being the amaranths.



There are no processors available in South Sudan most of processed horticulture produce comes from Kenya, Uganda and Egpty, Brazil for Sugar



Generally they import from all over the world.



Per capita income per person in South Sudan is high.

There are future plans of growing horticultural crops and exporting to the rest of the world but as per now there is very little or almost insignificant horticultural production around the green belt of South Sudan.

4.1 LAND OWNERSHIP There is a land Act 2009 and Investment Promotion Act of 2009 which makes clear provision to enable investors acquire land while the local communities owing land remain protected. The land Act divides land into three categories: public land, community land and private land. Investors may be allocated land by the nationals or state government provided that: 

The investor obtains a certificate of investment from the Ministry of Commerce,Indurtry and Investment

South Sudan Market Survey-April 2012

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

The investor obtains appropriate financial and environment clearance and guarantees from the financial institutions and the Ministry of Environment



The investment will contribute to the economic and social development of the community giving out land



The community will satisfactory be compensated for the allocated land



The investor consent to a 30 years renewable lease for the agricultural investment



The investor consents to a 60 year renewable lease for forest investment



Lease for investments in mining and quarrying will remain valid for life of the mine and quarries investors may also be allocated community land for investment in agriculture, forestry, ranching or residential housing development provided the community is sufficiently consulted the land does not exceed 250 acres, the state administration office is fully involved and the land in question is properly registered.

Non South Sudan citizen may acquire private land leasehold of up to 99 years through private treaties for any investment. 4.2 WATER SOURCES The river Nile is the dominant geographic feature in South Sudan, flowing across the country. Another major river is river Yei flowing through Yei country in Central, South Sudan is home to the world’s largest swamp, the SUdd which covers a total area of 30,000 square kilometer. 4.3 TRADE AGREEMENTS AND TRADE There are no developed trade agreements so far. This means that South Sudan is not a member of any regional agreement and international trade agreements. They are however members of EGAD which is mostly involved with security and conflict resolutions, they are also 193 rd member of United Nations ,World bank and IMF.

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There are plans to join the COMESA but they still haven’t established the technicalities, they are still carrying out an analysis as they haven’t established themselves and most goods and services are imported. South Sudan is a major importing country it imports over 90% of the goods and services in the country mostly from East Africa with Uganda dominating in horticulture importation to the country. 4.4 INVESTMENT Investment in South Sudan is governed by the Investment Promotion Act 2009.This document offers certain guarantees among been non-discrimination between local and foreign investors,free-market,private-enterprise,laissez fair approach which advocates the efficiency of the free market mechanism, continued growth in the number of Multinational Corporations and the increased number of FDIs. South Sudan will adopt policies intended to attract FDIs based on clear vision, mission, objectives, strategies and plan action this is intended to build a positive image through: 

Intensive and focused advertising in both print and electronic media



Active participation in workshops,conferences,seminars,exhibition and fairs



Encouraging inward and outward investment mission in which the private sector is represented.

4.5 TECHNOLOGY IN SOUTH SUDAN They have no landlines being used they use mobile phones with the major networks being Gem tell and Vivacell. Electricity is gotten from generators only which are powered by diesel with diesel cost being approximately 6.5 pounds a litre. Most of the produce is imported e.g. computers and IT materials being imported from Kenya through the Mombasa port. South Sudan Market Survey-April 2012

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The rate of building a house in South Sudan is three times the rate of building a house in Kenya with Cement, iron sheet being imported from Kenya and Uganda. 4.6 MINERALS South Sudan is rich on oil, minerals, Gold which is minimally exported. These minerals remain heavily unexploited and there being no mining act there is no proper structure in place on exploiting the minerals, however a mining bill is under way which will help stream line the issues. 4.7NATIONALITY 

National Identification Cards are issued at birth. This is a very important document which is also used to issue passport and certificate of birth.



The official retirement age is at 55 years.

5.0 PESTEL ANALYSIS POLITICAL FACTORS

ECONOMIC FACTORS

SOCIO-CULTURAL FACTORS

Democratic space

GDP higher than Kenya

Ethnic Animosity

Vibrant young GOSS

GOSS open for business

Cultural Practices

Peaceful transition

Booming economy

High MMR and IMRs

The oil crisis

Multiparty democracy

Prevalence

of

illegal

weapon South Sudan Market Survey-April 2012

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Tribal politics and ethnicity Untapped potential

Xenophobia tendencies

Unfulfilled promises

Discrimination

Vast resources

of

foreigners Overlapping Government

Growth rate of 7%

Language barriers

Neighbour growing too

Existing

structures Managing Expectations

and

returning

IDPs Inter-tribal conflicts

Strong Pound(SSP)

Single parent households

High cost of doing business Goodwill for Kenya strong

Generation gaps

Insecurity

Resolution of disputes

TECHNOLOGICAL FACTORS Very slow internet speeds

ENVIROMENTAL LEGAL FACTORS FACTORS Vast amounts of arable Fast improving regulations land

Improved

Mobile Favorable climate

telephony Vast mineral resources

Lack of skilled man power

The presence of landmines

cost

of

of

of

data Seasonal flooding

Investor guarantee 

Non discrimination



Intellectual property

connection Lack

enactment

laws

Data services non-existent

High

Fast-paced

rights electricity-from Environmental degradation



Dispute resolution



Repatriation

dams Overlapping

Government Pollution

structures High cost of ICT

Vast water resources Ineffective laws Subsistence way of life

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5.1 SWOT ANALYSIS STRENGTH 



WEAKNESS

South Sudan is a land locked



Poor

infrastructure-roads

and

country and as such the Mombasa

railways linking Kenya and South

port

Sudan is

and

Lamu

port

under

in a very poor state

Construction are quite strategic

Kenyan horticulture and processed

especially

Lamu

horticulture have to be transported

project involves construction of

through Uganda which reduces the

road and rail way connection

competitiveness in pricing and

South Sudan to Kenya thus easy of

fresh vegetables cannot last the

export of horticultural produce to

whole time thus cannot be exported

South Sudan.

to South Sudan.

because

the

High levels of good will existing



Perceived lack of facilitation for

for Kenya in South Sudan.kenya is

Kenyans

viewed in a very positive light by

business in South Sudan.

the

South

Sudan

interested

in

doing

government

having played a key role in the signing of the CPA agreement and the achievement of peace and independence in South Sudan. 

The general security and political



High levels of competition from

stability of Kenya makes it an

neighbouring countries especially

ideal trading partner of South

Uganda

Sudan.

produce going to the Open market

as

most

horticultural

i.e. Konyo konyo market come from Uganda.

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OPPORTUNITIES 

THREATS

There is a high opportunity for



Insecurity among communities in

Kenya to export horticulture to

the

South Sudan especially carrots,

bordering Kenya and South Sudan

potatoes, mangoes, avocado.

make it hard or almost impossible to

northern

use

the

part

root

of

Kenya

to

export

horticulture to South Sudan. 

With our base,

large

Kenya

manufacturing

can

process



Poor legal regime in South Sudan

its

may discourage Kenyan investors.

horticulture produce i.e. make

The regime is weak especially for

juices from fruits, tomato paste,

purposes of enforcing contracts

fruit yoghurt and sell to South

and resolving commercial disputes.

Sudan market. 

There is a lot of experienced



No

proper

custom

facilities

human resource on horticulture

between Kenya and South Sudan

there is potential for capacity

thus exporters to South Sudan have

building in South Sudan.

to use Nimule border which is the border of Uganda and South Sudan.



Less than 10% of South Sudan is farmed

thus

production



Insecurity and instability in South

of

Sudan especially against foreigners

horticultural produce is low and

who are being seen as “ benefiting

therefore South Sudan depends on

at the expense of indigenous South

imports.

Sudanese” 

The high cost of doing business in South Sudan such as the high cost of business registration, rent and lease arrangements, high fuel cost costing upto 6.5 pounds per litre.



South Sudan Market Survey-April 2012

South Sudan pound is not accepted

Page 22

as currency of trade in other countries only in South Sudan.

View of South Sudan

South Sudan Market Survey-April 2012

Page 23

View of Jabel Market

View of South Sudan

South Sudan Market Survey-April 2012

Page 24

View of South Sudan

View of Juba town

South Sudan Market Survey-April 2012

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View of River Nile

View of River Nile

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6.0 ISSUES BETWEEN SUDAN AND SOUTH SUDAN There has been security concerns in South Sudan with the North of the country being locked with bombing from Sudan Republic the major issues are:

The borders are not well demarcated that being a problem between them.



They have a problem with oil division and also the pipe their crude oil to Sudan and lately the Sudan is charging them 32 dollars per barrier while the rest of the world is being charged less than 0.5 dollars this has led to crossing of the oil pipes to Sudan port.



The Nile treat – the Nile water was divided between Egypt 55%, British 27% and Sudan 18%.As the country was divided to Sudan and South Sudan, South Sudan want a part of River Nile from Sudan but Sudan says South Sudan should have zero percent and depend on rain water.



Sudan wants South Sudan to help them pay the loans they incurred in building their country.



South Sudan wants a share of the profits of the companies in Sudan as they claim to have built the companies together before the country was divided into two.

6.2 CHALLENGES OF INVESTING IN SOUTH SUDAN 1. South Sudan is facing political uncertainty many key areas of the CPA have not been implemented in a satisfactory manner. 

The demarcation of the North-South border.



The sharing of oil revenues



The Abyei issue



Popular consultations in Southern Blue Nile where the Nile River is owned by Britain 27%,Egpty 55% and Sudan the remaining 18%,South Sudan wants a share of the river Nile because at the moment it doesn’t have a share of river



Distribution of assets and international debts, oil fields, production and transport, public service and pensions

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

Ethical conflict is widespread due to competition over natural resources .



Sudan has been classified by the transparency international as one of the most corrupt countries.

2. Public institutions are still weak in South Sudan. 3. The cost of transport, telecommunication, financial services, water and sanitation services, power supply are a major concern for investors who cannot do without these utilities. 4. The financial sector remains in South Sudan remains very ineffective due to limited banking networks with only seven banks operating i.e. Kenya commercial bank, Equity bank, Agricultural Bank of Sudan, Buffalo bank, Commercial bank of Ethiopia, Ivory bank and Nile Commercial Bank.Non bank financial institutions that offer loans are even scarcer . 5. Insurance companies are only limited to Juba city. 6. High level and multiplicity of taxes and poor tax administration is another problem. This is particularly true in the border towns. High taxes and burdensome tax administration are consistently listed as some of the obstacles to investing in South Sudan. The tax system is complex and lacks transparency, creating confusion to entrepreneurs. 7. Although land is abundantly available in South Sudan, there are difficulties in acquiring ownership, this problem is mostly acute in Juba the city of the country. All these situations raise the cost of doing business in South Sudan and can discourage investors.

South Sudan Market Survey-April 2012

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7.0 RECOMMENDATION 

There is need to lobby for construction of a road to improve the road network between Kenya and South Sudan, this will make it easier for horticultural produce to go directly to South Sudan without by passing through Uganda, this will ensure our produce remain fresh, competitive and give as an edge in export of horticulture to South Sudan.

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We need to invest in capacity building of Kenyans on the South Sudan market as many Kenyans have not opened up to the market making Uganda dominate the horticulture sector in South Sudan.

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The Kenyan government should come into agreement with South Sudan to enable Kenyans lease land in South Sudan and invest in horticultural farming in South Sudan this is as per our discussion with Ambassador Leshore Ambassador of Kenya to South Sudan-Juba.

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Due to the threatening war between South Sudan and Sudan at the time of the market survey the market survey was only carried out in Central Equatorial State which is the major State in South Sudan with Juba as the Capital, its thus important that we carry out a follow up survey on the other state especially those lying in the green belt.

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There is opportunity for HCDA to do capacity building on South Sudanese on horticulture farming and consumption.

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There is need to encourage horticultural production in the Northern Province mostly along Turkana, Lokichogio and other semi-arid areas bordering South Sudan to the North of Kenya and export to South Sudan.

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There is also a lot of opportunity in seedling and seed export to South Sudan this could be a lucrative horticultural business that can be carried out by Kenyans and improve the horticulture industry in Kenya.

South Sudan Market Survey-April 2012

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