Since attending the April 12 South Sudan Investment Roadshow breakfast in New York City, I have pondered the notion that this African country may capture the attention of small and medium enterprises in the African Diaspora.
According to the Africa Union, the roughly 170 million people of African origin who live outside Africa constitute the continent’s sixth region. By designating this global Diaspora community as such, the AU hopes it will join Africa’s five geographic regions (North, South, East, West and Central) in addressing the continent’s development needs.
The South Sudanese ministers of government and business leaders in the road show delegation pointedly thanked the United States for its contribution to their independence victory. Theirs was an open welcome to U.S. investment, which the U.S.-based African Diaspora should neither misunderstand nor ignore. Rather, the Diaspora should take it as an opportunity to become an integral part of U.S.-South Sudan initiatives, and to be first through the gate for the business opportunities the country offers.
“The government of the Republic of South Sudan is convinced that peace and stability on the one hand, and socio-economic development on the other, primarily through private foreign investment, are mutually reinforcing,” Nhial Deng Nhial, South Sudan’s foreign affairs minister, told road show attendees. “That is why we invite you to South Sudan to partake of what will, in the not-too-distant future, become one of Africa’s greatest economic success stories.”
In July 2018, The Overseas Private Investment Corporation (OPIC), the U.S. government’s development finance institution, launched Connect Africa, an initiative to invest more than $1 billion in transportation, communications, and value chain projects in Africa over the next three years. “By focusing on connectivity, we’re not only helping to build means for economic development, but also laying the foundation for future trade partners,” OPIC CEO Ray Washburn announced at the time. What’s to stop African-American business owners from ensuring that OPIC supports them in Connect Africa-related ventures, given the potential benefit that, as members of the sixth region, they may be the best shot against non-U.S. SME competition in South Sudan and on the continent as a whole?
South Sudan, meanwhile, is making it easier for SMEs to seize development opportunities. In New York on April 12, the secretary general of the South Sudan Investment Authority promised that his agency’s One Stop Shop, Certification of Investment, and open-door office policy with a window for flexibility will eschew the bureaucracy and corruption that have dogged many SMEs as they navigate Africa’s foreign investment and trade landscape.
The presence of African-American professionals like Thomas Mims at the road show breakfast signals Diaspora interest in South Sudan. Mims is president of Emerging Africa Ltd., which, since its founding in 1996, has helped to stimulate investment in Africa’s capital markets by providing critical research and financial data to institutional and individual investors. He contends that numerous enterprises, including SMEs, are poised to become new listings on African stock markets.
A stock exchange can be a source of investment funds for local SMEs, the acknowledged engine of innovation and economic growth in several countries, including the United States. South Sudan already has expressed interest in setting up a stock exchange and has hinted that it will look to the Capital Markets Authority (CMA) of Rwanda for help.
Now is a time for creativity and long-term vision in South Sudan. The country can turn to the African community itself for models of positive change, be it Rwanda, which has transformed itself into a high-tech, gender-progressive hub from the genocide of 1994; Sudanese-born billionaire Mo Ibrahim’s efforts to bring about more human-centered leadership on the continent; 15th Century Egyptian Queen Hatshepsut’s injection of spirituality into commerce that transformed Egypt into a flourishing state during her two-decade reign; or the ancient Kingdom of Kush, precursor to modern-day Sudan, whose civilization, though younger, surpassed that of Egypt culturally, economically, and militarily.
South Sudan already seems to be attracting financial institutions, which will help it to develop its financial and business sectors. To date, major Kenyan banks are active in the business sector. At the Washington, D.C., leg of the road show, the African Export Import Bank (Afreximbank) announced a US$500 million financing facility for the country. The majority of these funds will go toward quick-impact projects and “advisory services” in such areas as contract farming and mining. These two sectors are ideal for Diaspora SME participation in collaboration with competent, trustworthy local partners.
South Sudan, and, by extension, its Diaspora partners, can benefit tremendously from a positive relationship with Afreximbank. For example, responding to the SME financing gap across Africa, Afreximbank is leading efforts to create the requisite environment for the use of factoring, a form of trade financing in which a business sells its accounts receivables, such as invoices, to a third party (factor) at a discount, typically to meet the business’s cash needs.
Addressing a factoring promotion conference in Botswana on March 12, Kanayo Awani, Afreximbank’s managing director of the Intra-African Trade Initiative, noted that factoring would help innovative SMEs to grow and support Africa’s structural transformation and trade development. For South Sudan, factoring could be instrumental in the development of a vibrant small-scale manufacturing sector to complement its emerging petrochemical industry.
“If anybody here is in doubt about investing in South Sudan, they should come talk to us,” Afrieximbank President Benedict Okey Orama, PhD, remarked during the road show.
Although landlocked, South Sudan has huge potential as a logistics and transport hub for trade with the countries with which it shares borders—Sudan in the north; Ethiopia in the east; Kenya, Uganda and the Democratic Republic of Congo to the south; and the Central African Republic to the west. It has abundant resources of oil, gold and other minerals, timber, wildlife, livestock, water and fish from the River Nile and its tributaries, fresh-water ports along the Nile, and some of Africa’s most fertile soil. Managed well under sustained peace, the country can be a model of prosperity.
With access to various U.S. programs to enhance trade with and investment in Africa, skilled human capital, a treasure trove of best practices, SME networks, and expertise in numerous industries, U.S.-based entrepreneurs of Africa’s sixth region are well positioned to participate in the development of South Sudan’s economy. Hopefully they will move aggressively in both the U.S. and South Sudan to ensure that participation, advocating, for example, for special programs and incentives in such areas as trade, investment, land acquisition and visa entry seem appropriate.
South Sudan says it is “open for business.” It is time to test that premise and the country’s commitment to engaging the Diaspora community for peace and prosperity for Africans at home and abroad.
(Fritz-Earle Mc Lymont is a New York- based international trade and business development entrepreneur currently engaged in Africa, the Caribbean and the United States. He can be reached at mclymont@globaldrinc. com.)