The newly formed government of Africa’s newest state, South Sudan, has pledged its support for private sector development in the country. It has the ambition to promote economic growth and development through public-private partnerships and dialogue with existing business leaders in the country.

This ambition was made clear at a workshop organized by the South Sudan Business Forum (SSBF) in partnership with the World Bank Group’s International Finance Corporation (IFC) in September 2011. Elizabeth Majok, Under Secretary at the Ministry of Commerce, said ” The president himself is committed to fostering the private sector; the private sector must now play its part and stimulate the country’s economic growth.” Her plans include passing four bills that “when enacted, will play an important role in streamlining the business environment in South Sudan,” she concluded.

The challenges

There are many, some are heavy. The legacy of 22 years of internal conflict has taken its toll. South Sudan has a real hurdle to overcome in skills development, they urgently need educated and trained workers to lead the new government. Estimates of the literacy rate show just 27 percent, one of the lowest in the world, meaning it will be a long way off.

A new complication is that Juba, the current center of government and industry, is too small and the government intends to build a new city and move the capital to Ramciel, 250 km northwest of Juba. This is causing some consternation in business circles, especially with Kenyan companies based in Juba.

In its first days of independence, the country is still struggling with security problems as well as rampant inflation.

Trade with Kenya and other neighboring states

The lack of rail infrastructure is hampering many growth initiatives, as are problems with access to routes through Khartoum. This landlocked country has the disadvantage of not having access to a port, although it does make most of its imports through Mombasa in Kenya. 80% of South Sudan’s trade is with East African countries, the leading country is Uganda (also landlocked) closely followed by Kenya.

However, talks continue with oil majors to connect to the main fuel pipeline from Eldoret to Mombasa, which would improve export opportunities to Kenya, Uganda, Congo, Rwanda, Burundi, Tanzania and Ethiopia.

The banking sector in South Sudan is quite lively, the government is taking over one state in one and the Family Bank of Kenya is making a play for another. The top four banks are potential acquisitions for more established financial houses in the East African region that may see $$ signs.

South Sudan is expected to apply for membership of the East African Community (EAC) from next year.