September 12 marks one year since President Salva Kiir and opposition leader Riek Machar, along with other parties signed the revitalised peace agreement that set South Sudan on a path to reconciliation and stability.
The signing of the agreement last year was met with muted optimism, by both citizens, peace parents and the international community at large based on fears that the parties were not sufficiently committed to the agreement and could scuttle the peace process any time leading to a return to violence.
A year later, there has been a definite reduction in violence in the country which is proof that lasting peace is a possibility in the world’s youngest nation.
However, as the deadline for the implementation of the first phase of the peace deal looms this November 12, there is little evidence of progress towards implementation of the agreement on the ground.
This has not only hampered South Sudan’s economic prospects but also that of the region. There is no doubt that the escalation of conflict in South Sudan has had grave repercussions on the economies of neighbouring countries too. During the time of active conflict, economic growth stunted and there was a reversal in trade that also affected neighbouring countries.
Led by the Intergovernmental Authority on Development (Igad), regional states have been at the forefront of restoring and securing peace in South Sudan. And with good reason. An increasing portion of East and Horn of Africa’s economic growth is primarily due to regional trade and stability in the individual economies. The conflict in South Sudan has had a negative impact on the investments in the country leading to closure of businesses and loss of jobs in the region.
An article appearing in The EastAfrican on October 17, 2017 titled Businesses close as South Sudan war takes its toll reported the closure of several foreign-owned small and medium enterprises and subsidiaries of multinationals from the region. Since then, these multinationals, particularly financial institutions from Kenya and Uganda have had to significantly reduce their operations in the country, a move that resulted in job losses in South Sudan and neighbouring countries.
According to a UNHCR report published this June, there are about 2.3 million registered refugees and asylum seekers from South Sudan, with 858,607 (37 per cent) hosted in Sudan; 838,323 (36 per cent) by Uganda; 401,594 (17 per cent) by Ethiopia and 116,211 hosted by Kenya, constituting 5 per cent. There are about 102,000 hosted in the Democratic Republic of Congo. These figures not only demonstrate the humanitarian weight that the region carries but also point to a possible humanitarian nightmare in the event of a fresh outbreak of violence. UNHCR is meanwhile appealing for $2.7 billion to attend to “life-saving humanitarian needs” of South Sudanese refugees this year and next year.
ILLICIT FINANCIAL FLOWS
As documented in John-Allan Namu’s last year's investigative journalism documentary titled The Profiteers, the region remains a conduit for illicit financial flows (IFFs) out of South Sudan. IFFs fund lavish lifestyles and also catalyse insecurity as they find their way back into the country to fuel the conflict. South Sudan is also not part of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) and therefore does not have a legal obligation to comply with global and regional anti-money laundering laws and conventions including the Financial Action Task Force requirements. These IFFs are also a big threat to the manufacturing industry in the region.
In the event that the conflict escalates, and bearing in mind that South Sudan was not a signatory to the Nairobi Declaration on Promoting the Rule of Law and Human Security in Eastern Africa signed in 2016 on the sides of the TICAD conference, there are high chances of an escalation in illicit trade and the negative impact on manufacturing in the region.
Conversely, neighbouring states stand to gain in many ways if the leaders of South Sudan decide to form the much-awaited revitalised transitional government. With lasting peace in South Sudan, the businesses have a great opportunity to rebuild and this will boost the economic growth of the region.
Lasting peace in South Sudan will bring about economic co-operation between South Sudan and other members of the region. Already, just to highlight a few positive steps, Kenya signed a power-for-oil deal with South Sudan in July that will benefit both countries and has granted the country land at the Naivasha inland dry port which will help spur growth in the region; Tanzania recently signed a cargo deal with South Sudan that will increase the country's imports and export cargo volume through the port of Dar es Salaam. The point is that there exists great economic prospects for individual states and the region at large if the leaders of South Sudan choose to implement the peace deal.
The region has everything to gain with a stable South Sudan and much to lose if peace process does not crystallise. Whilst acknowledging that peace in South Sudan is a long process, there are certain actions that can be taken in the short term to secure the peace.
One would be for regional states and actors to ensure that parties in South Sudan honour the commitments they have made, such as the undertaking made in May by the Juba government to allocate $100m towards the peace process. This is an issue that leaders in the region should rally behind and insist on as South Sudan marks one year since signing of the peace deal.
It is only through effort by the region's leaders for peace that will create an environment conducive for trade and economic growth.
Patrick Obath is the vice chairman of Kenya Private Sector Association Foundation. E-mail: [email protected]