Atil: What is crucial is the ease of doing business

A specialist in Southern Sudanese business and the regulatory environment, Melody Atil told reporter Yobu Annet that Sudan's economic stumbling blocks are largely due to prevailing political uncertainties.

Q: When we talk about investment, we refer to it in terms of long-term assets that will benefit the nation for years. What advice would you give to the government of South Sudan so the young nation will have assets it can bank on?

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Atil: In terms of assets, the major reason that foreign investors and the local population are not building long term assets at present is uncertainty. When risk is high, one does not allocate a great amount to a structure that may be lost in the long run. Risk itself is high for several reasons: firstly, investors are not sure about the mood swings of the government; they don't as yet feel their investments are protected. They also have problems securing land, as they are uncertain about the future tax regime. Thus greater transparency, faithfulness and a focus on streamlining the legal and institutional environment for doing business would be instrumental in lowering risk and encouraging investors to focus on building long-term assets that can benefit the nation.

Q: Investing in a nation also means employment opportunities for local inhabitants. This has not yet been achieved in southern Sudan. How can foreign investment create jobs for our citizens?

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Atil: While the Southern Sudanese would like to access jobs, only 10% of the workforce is officially employed - the majority of labour tends to be foreign and few purchases are made from local firms. If foreign investment is truly to add value to the economy, it must increase its local content to provide local employment and local linkages throughout the value chain. This will ensure immediate income generation to the workforce and the growth of southern Sudanese-owned firms.

Q: Fifty-five years of the bush war hindered southern Sudanese from exposure to developmental ideas. Investors bring experts, but no locals are recruited  to develop their own capacities. How shall the nation overcome the challenges to increase a self-sustainable, local workforce?

Atil: Firstly, the Southern Sudanese in the Diaspora accumulated skills, training, and networks abroad, all of which are precious resources the nation did not previously have.

Secondly, foreign investors bringing experts to Southern Sudan is not a bad thing, but what is important is that the skills and technology of these experts are transferred to Southern Sudanese. The greater the interaction of southern Sudanese employees and firms with foreign agents, the greater is their potential to gain capacity and advance.

The late Francis Gerald asked:"Is Southern Sudan ready for foreign investment?"

The facilitating of such local sourcing for international firms would be instrumental, both in terms of employment and purchase contracts by local firms, as would the streamlining of market frictions - including both labour court difficulties and the attitude of the labour force. For instance, the labour force has to be fast moving; it has to engage and learn as much as possible.

Q: During your travels and assignments in other nations, what investment policies have you seen that might serve as role models for southern Sudan to boost its investment sector?

The Juba beer brewery by global giant SABMiller is one of the largest foreign investments.

Atil: As mentioned previously, what is crucial is the ease of doing business. The World Bank ranks countries each year on how easy it is for companies to do business with them, including the ease and difficulty of starting a business, dealing with licenses, employing workers, registering property, getting credit and protecting investors. The criteria also include paying taxes, cross-border trading, enforcing contracts and closing a business. It is crucial for the government to focus on these pointers to encourage a business-friendly environment.

It is also important to note that business and markets are merely tools, but takes the correct usage of these tools to lead to healthy development. As such, it is not the simple focus and promotion of business that will make economies prosper, but the right type of business that engages the community, increases employment, heightens the equitable distribution of wealth, and leads to long-term growth and improvements to standards of living.

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Q: Given the fact that the capital city is yet to be relocated, can you predict the future of the investment industry in Southern Sudan? What impact will this have on foreign and local investors?

Atil: Having a new capital city is not bad news for investors; it actually opens new frontiers for engagement while Juba itself will also continue to grow and develop as a city. What is more important is the transparency and availability of this information so that investors can make the right decisions.

Q: What is the effect when authorities refuse to lease land to investors? Is it not stunting the investment sector?

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Atil: Land is quite a contentious issue, of course. Leasing land anywhere in Southern Sudan is currently quite a lengthy process, and expensive at times. Lease contracts are not always a perfectly enforceable solution. This in itself is quite an issue. Relocating the capital will not necessarily solve this problem, but will instead place the rents accumulated from such leases in the hands of different agents.