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Economy

Sudan crisis hits Kenyan businesses

Sudanese President Omar al-Bashir
Sudanese President Omar al-Bashir (centre) at a group photograph of leaders at the 25th African Union Summit in Sandton, South Africa on June 14, 2015. He was ousted on April 11, 2019. AFP PHOTO | GIANLUIGI GUERCIA  

Thursday’s ouster of Sudan’s long serving ruler, Omar al -Bashir, has triggered uncertainty among Kenyan businesses with interests in the eastern Africa nation amid the shutdown of its borders and airspace.

National carrier Kenya Airways, #ticker:KQ which runs five weekly flights to the troubled country, was the first one to take a hit, prompting it to cancel two fights between Nairobi and Khartoum scheduled for last night.

“What has happened in Sudan is definitely going to affect our plans,” Kenya Airways head of communication Dennis Kashero told the Business Daily.

For several years, the KQ air flights have fuelled a thriving trade that opened up Sudan for Kenya’s tea, coffee, spices and tobacco.

Latest official statistics indicate that Sudan ordered goods worth Sh6.9 billion from Kenya in the 12 months to December 2017.

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The trend has continued this year with the country ordering 1.443 million kilos of tea in January alone.

In a televised address shortly after taking power, Defence minister Awad Mohamed Ahmed announced the installation of a transitional military council that will hold power for two years to prepare the ground for elections.

Emergency period

In Kenya, anxiety gripped firms after the Sudanese military announced that the country’s parliament, constitution and treaties with other states would be suspended during the emergency period.

Kenya’s tea sector players are already restless, unsure of how long the Sudanese military will take to restore normalcy in the country’s economy.

The industry has regarded Sudan, not only as the fourth largest market outlet that accounts for up to 10 percent of their exports but also as a strategic entry point to markets like Libya, Central African Republic and Cameroon.

“As long as the logistics and transport channels are not interfered with, we don’t see the regime changes adversely affecting the quantum of our tea exports,” said Mr Edward Mudibo, managing director of East Africa Tea Trade Association.

“But since the present situation evolved out of people protesting high inflation, a case of prolonged upheaval will surely hurt our export prospects as purchasing power weakens further in Sudan.”

“Away from the current political problem, Kenya’s tea industry generally sees Sudan as a very important market. Our only problem has been shortage of forex that has been delaying payments,” added Mr Mudibo.

Military coup

Mr al-Bashir took over power in a 1989 military coup and ruled the country with an iron fist.

It was his government that signed a deal to end a 21-year conflict with the South in 2005, paving way for a referendum that created South Sudan in 2011.

But even as he took steps to end the war with the South, another war was breaking out in the western region of Darfur, where he is accused of organising war crimes and crimes against humanity by The Hague-based International Criminal Court (ICC).

Despite being on the ICC wanted list, Mr al-Bashir has previously visited Kenya and other states such as South Africa, Egypt and Saudi Arabia without getting arrested.

His regime was also at loggerheads with the United States over allegations of sponsoring terrorism.

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