Time for Investors to Strike Deals With South Sudan

Last week, the world watched as Africa’s 54th state – South Sudan – got its independence. For many Sudanese who have been caught up in a two decades long civil war, this was a great moment. The war totally damaged the economy and a lot of work needs to be done to get the State back on track.

A lot of changes are happening within the business environment in East Africa including legal, economic, social or political … all which have an impact on businesses within the region.

Starting with Kenya, the new Constitution is a positive achievement for businesses. Not only because of the provisions that it contains, but also because its enactment has improved Kenya’s image globally. Kenya has emerged as a mature State that is ready to heal from the past.

It has come a long way as a democracy. Before, the executive had a lot of control on the judiciary. All you needed to do is know someone in the right places for you to be able to have your way in the courts. But with these new changes, perhaps investor confidence shall improve.

Part of the steps in a legal due diligence is to analyse the legal system in a country. In some third world countries, foreign investment is a definite no as the political class have a lot of influence on the country. In some cases a simple presidential decree can ruin your entire business. The changes happening in Kenya’s financial market are also promising. Regulatory changes allowing the introduction of new financial products like Real Estate Investment Trust (REITs) and futures are definitely going to have a positive effect on businesses.

The road expansions will open up previously marginalised areas, significantly reduce the cost of doing business and attract additional investors into the country.

There are a lot of public private partnerships that are springing up.

The East African region is also being recognised as a good business environment by many investors. First, the entry of a new state in the region is something that is going to attract a lot of attention to the region.

Multinationals are already competing to set their base up in South Sudan and to work with them. Every young state has a lot more potential for growth than a mature state that has reached its peak.

The fact that there is a lot of political unrest in North Africa right now might mean that attention shall turn to this region. Regionally professionals are following suit by forming strategic alliances and associations.

The East African Community (EAC) protocol has also opened up a lot of opportunities for investors both regionally and globally. It is of interest to note that the EAC is comprised of mature as well as young states. Each country is unique in its own right.

Some states are mature yet others are young. Some have gone through a commendable healing process, the histories of the EAC states differ.

Some have an English colonial background while others have a French backgrounds, but they will strike deals to work together as one region.

New alliances

What do these changes mean for businesses? It means it’s now easier and safer to do business in Kenya and the region as well due to the positive transformation.

The support systems like the regulatory environment, infrastructure and the legal changes are good for businesses. Kenyan businesses should take advantage of these changes to grow their business.

This is the time for regional expansion especially to the new state that has a lot of untapped potential. This is the time to h have confidence in the court process. This is the time to expand nationally as well due to the fact that each county shall manage its own finances.