Failed South Sudan military coup shakes investors

Flights from Kenya to South Sudan were suspended Monday following an attempted coup that left Kenyan businesses operating in Juba facing uncertainties.

Tension remained high in the South Sudan capital as President Salva Kiir declared a curfew, saying soldiers loyal to sacked deputy president Riek Machar were behind the failed putsch.

Mr Machar was sacked following a cabinet reshuffle in July.

People stayed indoors most of Monday and businesses were closed in the two-year-old state where Kenya is the top source of foreign direct investments.

Kenya Airways and Fly 540 were forced to cancel their flights to Juba following the closure of the airport.

“We had to cancel our two flights and expect significant loss of revenue on our part as we wait and see,” Fly 540’s operations director, Nixon Ooko, said in a phone interview.

He said the revenue loss for cancelling the two daily flights to Juba could stand between $40,000 and $50,000 per day.

Juba is one of the airline’s most lucrative destinations and both flights were fully booked. KQ cancelled its three flights to Juba indefinitely.

Kenyan corporations, small enterprises and individuals have in the past five years pumped billions of shillings into the country hoping to reap the independence dividend and pioneer benefits.

Companies such as Kenya Commercial Bank (KCB), Equity Bank, Co-operative Bank, UAP Insurance, EABL and Bidco, have invested in the country and are keenly observing the situation.

READ: How South Sudan is minting money for Kenyan banks

Kenyan entrepreneurs have also set up businesses in Juba to tap into the growing opportunities the new country has.

“We expect some disruption to sales but hope things will get back to normal quickly. Impact on overall EABL performance will be minimal,” EABL chief executive Charles Ireland said.

KCB spokesperson Judith Odhiambo said the bank was still monitoring the situation while East Africa Portland Cement Company said it was still assessing the impact on its distributors.

Kenya Private Sector Alliance (Kepsa) chief executive officer Carol Kariuki said the business community could be forced to close their enterprises for fear of attacks and losses.

“Calm must return as soon as possible to restore investor confidence; otherwise businesses will close in that region and the move will be both detrimental to the economy of South Sudan and the Kenyan business people,” said Ms Kariuki.

Data from the Export Promotion Council (EPC) released in June showed that Kenyan exports to South Sudan in 2012 hit Sh18 billion against imports valued at Sh14 million.
Kenya’s exports to the South Sudan market include pharmaceutical products, food, edible oils and other manufactured products.

The unrest comes as Kenyan companies endure the challenge of repatriating money due to a dollar crunch that forced Jetlink Express to shut down last year.

“There are several economic factors in South Sudan that have still not stabilised including the sporadic availability of currency and difficulties with conversion rates that affect the ease of trading,” said Mr Ireland.

Insecurity has in the recent past seen Kenyans working and living in the oil rich country raise concerns over targeted deaths and torture. More than 20 Kenyans have lost their lives, raising suspicions of xenophobia.

The United Nations Mission in South Sudan has called for restraint among the warring parties.

“As the Special Representative of the Secretary General I urge all parties in the fighting to cease hostilities immediately and exercise restraint.  I have been in touch regularly with the key leaders, including at the highest levels to call for calm,” said Ms Hilde Johnson, Special Representative of the Secretary-General. 

The fighting broke out shortly before midnight on Sunday between rival factions in South Sudan’s armed forces and continued Monday.

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