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Saturday, 05 March 2011 10:53

Sudan Launches Program With WB Group

JUBA, South Sudan, March 5, 2011 (Sudan Tribune) — The emerging independent state of South Sudan has launched an ambitious program that will embark on robust development of the country's private sector following its people's overwhelming vote for independence from north Sudan in the recent January 2011 referendum.

The people of South Sudan, in accordance with the peace deal signed with north Sudan in 2005, voted in favour of independence, which will officially begin on 9 July 2011. Despite its huge resource potential, the region is amongst the poorest in the world. Its private sector is still in its infancy.

On Monday a joint program involving the government, the World Bank Group (WBG), part of the World Bank and a number of donor countries launched the private sector development program - described by the officials as key to development in the region.

The partnership will receive its primary funding from the governments of the Netherlands and South Sudan. It will also receive funding from the United States Agency for International Development (USAID); and the governments of Denmark, Ireland and Norway.

The WBG also comprises of five closely associated financial institutions which include the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The Group also includes the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Center for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.

The ambitious program for South Sudan will be managed by the International Finance Corporation (IFC), a member of WBG, together with various ministries of South Sudan government and private sector entities. IFC is the world's largest development institution focused on the private sector in developing countries. It provides financing worldwide to help businesses create jobs, employ more people and supply services, in addition to delivering advisory services to ensure sustainable development.

IFC's vice president for advisory services, Rachel Kyte, came to Juba for the launch of the program. Representatives of the donor countries were also represented during the launch. South Sudan's vice president, Riek Machar Teny, officially launched the program in the presence of a number of ministers, including the minister of investment, Oyai Deng Ajak, who was key to the program.

The program will focus on implementing three of its components which will include investment climate reform project of which attracting new investments shall be one part. Also developing small and medium size enterprise project, primarily through training and capacity building; and access to finance project that explores new financial instruments such as leasing and mobile banking are among the various components to be covered by the program.

In his key note speech at the launch of the program, the vice president of South Sudan, Riek Machar Teny, said developing a vibrant private sector was a key strategy in broad-based economic growth and the development of South Sudan. "Nations are built by the private sector," he told the gathering. He explained that South Sudan has never had a viable private sector, adding that there was need to develop human and financial resources in order to meet the people's expectations in the new independent state.

The region's Vice President assured the assembled that South Sudan would be a new frontier for investment, domestic and foreign. He explained that 98% of the existing businesses in the region are micro-enterprises, operating at very low capacities.

He lamented the fact that while the government has not been successful in encouraging business partnerships between domestic and foreign investors in order to develop the capacity of domestic investors. One of the reasons cited was unsuccessful foreign investment, due to a lack of transparency and an attitude of dishonesty and cheating applied amongst some Sudanese business people.

Machar reminded the participants of the SDG6.1 billion (US$2.3 billion) grain fraud which he said had embarrassed the government, because of fraudulent companies produced by people who wanted to get rich quick. These, he said, won contracts with government and foreign investors, who in the process lost the money to these scams. He called upon the perpetrators of the scams to, "Drop those false papers".

"Be honest about your business and stop embarrassing your government," the Vice President cautioned, amidst the silence of the hundreds of business people attending the launch.

Machar also revealed that another challenge facing the government was tax collection, especially at border points, by unorganised government officials or individuals with the intention of looting public funds.

He however said the government would continue to provide investment opportunities and ensure security and good governance, which he said were the main pillars in development.

Machar appealed to international partners to prioritise agriculture and livestock in the private sector program. He said South Sudan has the most fertile land for agriculture in Africa, which he said could turn the region into a bread basket in Africa, if not the world. He further explained that the oil revenues should provide a platform for diversification of the region's economy.

The Vice President also appealed for the development of cooperatives in South Sudan, which he said could be effective tools in improving private sector programs. (END/2011)

 
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