Kenya faces a diplomatic dilemma as its firms demand compensation for losses suffered in South Sudan even before it settles similar claims lodged by landlocked countries following post-election violence five years ago.
A number of influential firms are lobbying to have the government play a lead role in negotiating a compensation scheme with South Sudan expected to run into billions of shillings.
“The complaints so far range from lost man-hours to outright looting and violent eviction from premises,” said a government official who opted not to be named due to the sensitivity of the matter.
South Sudan is estimated to have grown to be the second largest recipient of private investments from Kenya since 2005 when the two-decade long war ended.
“It is not easy to accurately estimate the amount of investments Kenyans have put in South Sudan because apart from the established firms, there are hundreds of small-scale entrepreneurs who had thriving businesses in that country,” said Ms Carole Kariuki, CEO of Kenya Private Sector Alliance.
Uganda is the leading recipient of Kenya’s foreign investments.
Under the United Nations Convention on Economic, Social and Cultural Rights, States have responsibility to guarantee security of investments and goods transiting through their countries.
Last week, the Cabinet directed Attorney-General Githu Muigai to prepare a legal position “with regard to huge losses incurred by Kenyans following the conflict.”
The Cabinet said Kenya had already spent Sh600 million on humanitarian effort that included airlifting 10,000 stranded citizens and supporting refugees fleeing to Kakuma.
“The Cabinet directed further evacuation of 7,000 Kenyans still in South Sudan and approved that humanitarian support be continued,” the statement released last Thursday read.
Having leaned on its neighbours to avoid a damaging lawsuit over the 2008 post-election crisis that caused losses to traders mainly from Uganda and Rwanda, experts say Prof Muigai has very little options.
“Kenya may not opt for a legal measure or something drastic because it risks setting an unrealistic precedence,” said Dr Emmanuel Kisangani, a senior researcher at the Institute for Security Studies, an international security think-tank.
He expects the government to wiggle out of the quandary by undertaking to pay out some ex-gratia payment without asking for reparations from South Sudan.
“Generally, the duty of protecting investors’ property was on the government of South Sudan, not Kenya. Traders may just have to count losses if the government does not foot the bills because even insurance firms rarely cover such losses,” Dr Kisangani said.
Last year, traders from Rwanda, DRC and Uganda threatened to sue Kenya in the international courts to recover billions of shillings lost during the post-election violence.
The Ugandans said they incurred losses of up to $47 million (Sh4 billion) while Rwanda and DRC did not disclose their demand. The Kenya Association of Manufacturers estimated that its members lost Sh10 billion in the violence.
The governments prevailed upon their citizens to drop the cases so that they could be pursued by East African Community organs. In the case of South Sudan, this can be pursued through the Inter-Governmental Authority on Development (Igad) where South Sudan is a member.