Politics and policy

Kenyan traders lose jobs, savings in S. Sudan turmoil

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One of the Kenyans who were evacuated by the Kenya Defence Forces from South Sudan at Wilson Airport in Nairobi last month. FILE

One of the Kenyans who were evacuated by the Kenya Defence Forces from South Sudan at Wilson Airport in Nairobi last month. FILE 

By GEORGE NGIGI, gngigi@ke.nationmedia.com

Posted  Monday, January 13  2014 at  00:15

In Summary

  • Broken dreams for 20,000 left without jobs and savings locked up in bank accounts.
  • The majority of the returnees are young Kenyans who have invested in small and medium-sized businesses but have had to flee South Sudan since internal conflict broke out three weeks ago.
  • Many now fear that the mayhem that has characterised the sectarian conflict in the past three weeks could consume their investments.

The recent outbreak of war in South Sudan has put the dreams of thousands of Kenyans, forced to flee the country, in a freezer.

Official government statistics show that more than 20,000 Kenyan professionals and businesspeople have come home on forced and indefinite leave, suffering multi-million-shilling losses and pushing up the number of unemployed people in East Africa’s largest economy.

The majority of the returnees are young Kenyans who have invested in small and medium-sized businesses but have had to flee South Sudan since internal conflict broke out three weeks ago.

Many now fear that the mayhem that has characterised the sectarian conflict in the past three weeks could consume their investments.

The entrepreneurs’ troubles have been deepened by the fact that Kenyan banks with subsidiaries in South Sudan have refused to transfer their savings in the war-torn country, effectively freezing their Sudanese pounds-denominated accounts.

“Our money is stuck there in pounds because banks are not transferring and we are jobless,” said Gideon Mungai, the chairman of the Kenyan Diaspora in South Sudan Society.

Mr Mungai said he was operating a hotel in the South Sudanese capital Juba and lost a generator, fridges and mattresses to looters after fighting broke out.

Kenya is expected to pay a high price for the close economic ties it has maintained with South Sudan since its independence from Khartoum in July 2011.

“The net effect is that these are potential remittances Kenya will not receive in the near term, amounting to a reduction in ‘exports’ that could depress demand for goods and services and lead to job losses at home,” said economist X.N Iraki.

Prolonged war is also expected to limit the flow of goods to South Sudan, which is heavily reliant on Kenya for raw materials and consumer goods, further harming Kenya’s economy.

Data from the Export Promotion Council shows that Kenya exported Sh18 billion worth of goods and services to South Sudan against Sh14 million worth of imports in 2012

The returnees have now been forced to depend on their friends and relatives for upkeep even as efforts to end the conflict drag on in the Ethiopian capital Addis Ababa.

The Salva Kiir-led government has attributed the fighting that is now concentrated in Jonglei and Bentiu provinces to an attempted coup by forces sympathetic to former vice-president Riek Machar.

Kenyan banks, insurers, universities and other businesses that had opened regional operations in South Sudan are also victims of the turmoil. KCB has closed three of its 18 branches in South Sudanese towns of Bor, Bentiu and Malakal.

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