Kenyan traders tap into booming south Sudan market

The high demand for physical infrastructure and complementary social amenities such as schools and hospitals has bolstered the fortunes of the construction industry in Juba.

As Juba does not currently manufacture any key materials to service this industry, Kenyan goods have typically filled the gap.

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Construction material, consumer goods and medical supplier form the bulk of cargo transiting Kenya into southern Sudan.

According to the 2009 economic survey, the total exports to Sudan has increased almost threefold since 2004.

In 2008, total trade with between Kenya and Sudan stood at Sh14.2 billion, with the bulk of it being exports, which amounted to Sh14.1 billion.

Sudan has emerged as the fastest growing market for Kenya against the backdrop of the local companies entrenching their foothold in the oil producing country.

Since the signing of the peace accord, the Sudan market has increased by about 34 per cent, compared to an increase in trade with Uganda of 28 per cent.

“Kenya is looking for new partners and Juba is a virgin market that we can tap into. It lacks a lot of services which makes it a ready market. As a country we have a deep connection with Sudan due to our role in facilitating peace in that region. This bolsters our commercial efforts,” said John Akoten, an analyst with Institute of Policy Analysis and Research.

The government of southern Sudan is also in a race to attract foreign direct investment.

According to Vimal Shah, managing director, Bidco Oil Refineries, the establishment of a taxation act which makes the taxation regime predictable and a land act which makes land ownership rules clear provide a good incentive to investors.

However, since Southern Sudan is still an emerging market, Mr Shah says consumption levels are still low.

“The market is still too small for manufacturers to set up in Juba. Purchasing power is also low. The market is currently good for trade but at the moment, it is not viable for manufacturers,” said Mr Shah.

Electricity is also of major concern in Juba, driving the cost of business through the roof.

However, manufacturers contend that within the next five years, this fast growing African city will be a must for investors looking to diversify their interests in Africa.