War Tamed, South Sudan Faces New Hurdle: Luring Vital Investment
(Bloomberg) -- South Sudanese authorities, eager for investment after a five-year civil war, vowed to meet international companies’ needs for foreign exchange, shortages of which forced Anheuser-Busch Inbev SA’s unit to close.
The Investment Authority’s pledge comes as the oil-producing East African nation enacts a peace deal and pursues international financing to overcome an economic crisis that saw inflation exceed 200 percent. Units of both MTN Group Ltd. and Kuwait’s largest mobile-phone provider are among the few major remaining foreign companies -- and they’ve made cuts to survive.
“Our country has been closed for so long and now is the time to speak volumes -- loud and clear -- that our country is ready for investment,” Abraham Maliet Mamer, the authority’s secretary-general, said in an interview.
The world’s youngest nation will host the South Sudan Oil & Power 2018 conference in the capital, Juba, on Nov. 21-22. China National Petroleum Corp., Oil & Natural Gas Corp. of India and Petronas Bhd of Malaysia are the main operators of oil blocks in South Sudan, which has sub-Saharan Africa’s third-largest reserves and is counting on increased production to help fund the peace agreement.
Trade and investment conditions aren’t favorable to U.S. companies, according to the latest bulletin from the U.S.’s Bureau of Economic and Business Affairs. Among its concerns: the tight control of hard currency by the government, an ineffective legal system, limited physical infrastructure and high political risk.
South Sudan Beverages Ltd., a unit of what was then SABMiller Plc, closed its brewing operations about two years into the conflict as a currency shortage curtailed its ability to import raw materials.
Authority’s key pledges:
- Drive to encourage foreign companies to register with the authority; steps to enact this in 2013 were disrupted when war erupted
- Facilitating access for registered companies to previously announced incentives such as five-year tax holidays and tax exemptions on some equipment imports
- Authority will direct central bank to provide dollars to meet requests from international companies
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