The spoils of peace

May 15, 2005 02:00 AM

by Ken Ramani

Although Kenya invested heavily in the search for peace in Sudan, it risks losing out on the benefits of reconstruction. The rush to invest in southern Sudan is in high gear but there are no signs that Kenyans are in hurry to join the fray.
This is despite the fact that Kenya has hosted refugees from southern Sudan for decades and played a leading role in the search for peace in that country.

The Sudan People's Liberation Movement/Army and the Sudan government signed a comprehensive peace agreement on January 9 in Nairobi. Donors have already pledged over $ 4.6 bn for the reconstruction of Sudan and 40 % of that money will be utilised in the south. This is not to mention the investments by multinationals and also SPLM/A's provision of services using proceeds from oil being drilled in its territory.
Since the Sudan doesn't have the capacity to carry out a massive reconstruction programme, foreign companies will have to be invited to bid. An investments conference on southern Sudan held in Nairobi confirmed many a pundit's fears that unless Kenyans move faster, they will lose out.

Although it was initially intended to attract investors from East Africa, the conference attracted others from as far as Iran, Pakistan, India, USA, Britain, France and South Africa. To make matters worse, Kenya does not have an office that could help educate local investors about the opportunities in southern Sudan. SPLM/A says there are no roads, railways, river navigation systems, telecommunications, schools, hospitals or administrative buildings.
During the war that lasted 21 years, livestock and agricultural production were severely affected. Planning minister Prof Anyang' Nyong'o told the conference that funding southern Sudan's broad-based development ought to present less of a challenge to its administration than elsewhere.

The region is mineral rich but the extent of the deposits is yet to be established. This will require companies with expertise and sufficient capital to be able to explore and begin mining. The Chinese Oil Corporation is the only company that is currently drilling oil in the south and refining it in Port Sudan, located over 2,000 km away.
After the adoption of a new constitution in June, SPLM/A will form a regional government in the south and will be eligible to receive half of the proceeds from the oil revenues whose output early this year averaged $ 6 bn per annum.
Reconstruction of the south will have to be preceded by the building of roads to enable relief supplies reach the intended people residing in hard-to-reach pockets. SPLM/A vice chairman, Dr Riak Machar, said the south would also require investors in agriculture, tourism, livestock, mining, hospitality, housing, water and transport. There are also investment opportunities in private schools, universities and technical institutions.

Nyong'o says Kenyans have more to gain from the reconstruction exercise in southern Sudan than any other country in the region.
"We have a comparative advantage in providing education, business and civil service training to the new administration in southern Sudan beginning next June. Kenya is well positioned to supply teachers, nurses, engineers, civil servants and managerial experts as well as train the new public service, police and army," said Nyong'o.
The minister said: "We can no longer ignore a neighbouring economy (Sudan) with a $ 21 bn GDP growing at a 6.5 % annual rate. It has a potential market for Kenyan investments, goods and services. Although we have done so much in conflict resolution, Kenya is not among the 15 top trading partners with Sudan."

The well attended conference was organised by Bread of Life Africa (Bola) in conjunction with SPLM/A. Bola programmes director Malei Nthiwa said it will be unfortunate for Kenyans to miss out on opportunities in Sudan after spending so much time and resources in hosting peace talks and hundreds of thousands of refugees.
Kenyans missed out on the reconstruction of Rwanda following the 1994 genocide that claimed over 1 mm lives. The international community pumped billions of dollars into Rwanda to help the Central African country rise from the ashes of the destructive genocide. Companies from various countries clinched contracts to build roads, houses, bridges and other infrastructure, but Kenyan firms stayed away, perhaps fearing that violence could recur.

Machar said the new constitution would be ready by end of May. It will pave the way for a government of national unity as well as creation of federal states. Machar explained that the new constitution would spell out the legal regime of doing business in southern Sudan.
Nyong'o also spoke of a possibility of the two states constructing an oil pipeline to link up Mombasa and Bentiu in southern Sudan. He said private investors might be encouraged to put up the pipeline adding that the oil from Sudan will be cheaper and spur economic growth in this part of Africa.

Source: The East African Standard
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