South Sudan | Business & Economy News

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Equity plan to open more branches in South Sudan

Written By:Obrien Kimani, Posted: Thu, Sep 01, 2011

The bank which opened its fourth branch in the country this week plans to tap into the Western, Eastern Equatorial, Jonglei and Western Baraghazal states among others according to Equity bank South Sudan executive director Paul Gitahi.

The world's newest state which has been embroiled in civil war for many decades has become a soft target for Kenyan investors due to massive potential growth as the country embarks on a rebuilding path.

Already there are two Kenyan banks operating in South Sudan and three more are expected to join the list early next year.

Family Bank is the latest to proclaim intentions of opening a branch early next year followed by Co-operative bank and Kenya Commercial Bank.

Local manufacturers like Bidco and EABL who have been using distribution networks to supply the market also plan to establish there while KenolKobil and BAT Kenya target to increase supply.

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SDG valueless in South Sudan

JUBA, 2 September 2011 – The Sudan Pound (SDG) is no longer a legal tender in the Republic of South Sudan and is therefore valueless in the country, the Governor of the Bank of South Sudan Mr. Kornelio Koryom has announced.


Speaking to the press at the bank’s premises in Juba this morning, the governor said that effective today the SDG can no longer be used to transact any business in South Sudan after the currency exchange period elapsed yesterday.


The governor also announced that the bank will soon release coins which he said will be in 50, 25, 10 and 5 piaster denominations.


Mr Koryom explained that the collected SDG will be kept by the bank awaiting the results of the ongoing negotiations facilitated by the African Union on whether the Republic of Sudan will redeem the old currency or not. He said the bank will decide what to do with the currency once the negotiations are complete and a conclusive decision is reached.


He commended the committee which coordinated the exercise for a job well done in spite of immense logistical challenges. He also thanked the governors of all the ten states of South Sudan for supporting the currency conversion programme.


The press conference was also attended by the deputy governors Mr Jamal Abdalla Wani and Mr John Dour Majok. Also in attendance were the members of the currency exchange committee as well as senior Bank of South Sudan officers.

[chiefayic2]

New airline for South Sudan

By Wolfgang H. Thome, eTN | Sep 05, 2011

(eTN) - South Sudan’s latest privately-owned airline, Southern Star, took delivery last week of their first aircraft, a Dash 8 supplied by ALS of Nairobi Kenya on a long-term contract.

The new airline is reportedly planning to start operations with domestic flights across the vast Southern Sudanese territory, connecting Juba with such towns like Malakal, Rumbek, and others. Air transport is seen as a fast and safe mode of travel within the South Sudan, where a nationwide cross country network of highways and roads is only now beginning to be constructed.

According to a source from Nairobi, Southern Star is due to receive additional leased aircraft from ALS in due course to expand their network into the wider region. The new Republic of Southern Sudan is expected to commence negotiating bilateral air services agreements, in short BASA’s, with first neighboring countries, which when coming into effect will regulate the number of frequencies and spell out the number of designated airlines from both BASA partners allowed to fly on the route. Presently air traffic in and out of Juba is dominted by foreign airlines, but sooner or later the principle of reciprocity will come into play, giving airlines registered in South Sudan a stronger position when it comes to claiming their share of the traffic.

The ownership of Southern Star could not be immediately established nor could suggestions that ALS was a partner in the venture.

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Uchumi eyes entry into South Sudan retail market

By GEOFFREY IRUNGU

Posted Thursday, September 15 2011



A branch of Uchumi in Nairobi. The firm is eyeing the S. Sudan market.

Uchumi Supermarkets is eyeing entry into the South Sudan market as part of the listed retailer’s expansion drive to boost growth.

Chief executive Jonathan Ciano said Tuesday Uchumi would open a branch in Juba, which is likely to remain the newly independent State’s commercial capital “for at least a decade” even as plans are under way to relocate the administrative town to Ramciel.

“The change in capital will not affect our plans. If anything it may take ten years for the other city to catch up with Juba. You need to draw a parallel with Lagos and Abuja or between Dar and Dodoma. Commercial activities are still concentrated on the older cities even though the capitals have moved,” said Mr Ciano.

Uchumi is currently looking for business premises and does not have a firm date when it expects to have opened for business in South Sudan.
The retailer also plans to expand to other locations or add to existing branches in towns where it already has a presence. Areas targeted for opening new branches include Kisumu, Ongata Rongai, Kisii, Taj Mall (Embakasi), Gulu, Kabalagala, Quality Mall in Dar, Natete and Freedom City in Kampala.

The supermarket chain is facing increased competition in the saturated Kenyan market from retailers such as Naivas, Tuskys and Nakumatt; that expanded at a time that the firm was under statutory management.

Uchumi Supermarkets, which re-listed at the Nairobi Stock Exchange (NSE) in May after a five-year absence, has returned to profitability. In the year ending June 2011, the company announced a pre-tax profit of Sh514.8 million compared to Sh433.2 million earned in 2010.

However, its after-tax profit was lower at Sh390.4 million from Sh865.1 million in the previous year, when it received tax credits due to a history of loss-making.

The company share was trading at Sh8.30 yesterday afternoon down from the previous day’s average of Sh8.40. This would suggest a P/E of 5.6 compared to the commercial and services sector average PE of 8.4 as at September 9.

[chiefayic2]

South Sudan Changes Fiscal Year Cycle


Dr. Barnaba Marial (right) accompanied by Hon Atem Yak Atem (left) addressing the media [©M. Safi]

JUBA, 14 September 2011 – The Minister for Information and Broadcasting Dr Barnaba Marial Benjamin has announced that South Sudan has changed its annual budget cycle which will now run from July to June as opposed to the January-December cycle hitherto applied by the Government of Southern Sudan.

Dr Marial also reported that the budget for the current financial year is likely to be deliberated by the Council of Ministers this Friday. He said the government has been releasing funds only for urgent purposes and salaries for the civil servants. He expressed confidence that the new budget will be aligned to South Sudan’s new status as an independent sovereign State with new responsibilities and institutions.

The minister also introduced the new deputy minister for Information and Broadcasting Hon Atem Yak Atem whom he described as a member of the Fourth Estate whose contributions will be valuable for both the government and the media fraternity.

He said Hon Atem is a veteran journalist who contributed greatly to the liberation struggle through the SPLA Radio and the weekly SPLM/A Update which he used to edit.

Hon Atem allayed fears that he may find it difficult to fit in his new position and asserted that media professionals are dynamic and are able to shift roles in the service of the people. He also emphasized that the media is a partner of the government in the interest of national development and public good.

Hon Atem also called on the media to carry messages of peace, hope and reconciliation which would unite the people and harness their support for new challenges of nationhood.

Dr Marial announced the resumption of the weekly media forums to be held every Tuesday at the ministry’s headquarters. He also announced that the next forum will be addressed by the new minister for Interior Hon Alison Manani Magaya.

In attendance was Hon Bona Makuach Mawien the minister for Information in Northern Bahr el Ghazal State, who appealed for long-term solutions to flooding menace in Aweil. He explained that flooding is normally caused by poor drainage systems. He said that the state government is addressing the situation with the support of the national government and development partners.

The forum was also attended by the Acting Undersecretary of the Ministry of Information and Broadcasting Mr Mustafa Biong Majak, the Director General for South Sudan Radio and TV Mr Arop Bagat, senior officers of the ministry and journalists from various local and international media houses.

[chiefayic2]

US oil companies to operate in South Sudan

WASHINGTON, Sept 16 (Reuters) – The United States is drawing up new guidelines to permit U.S. oil companies to operate in South Sudan without running afoul of U.S. sanctions that apply to Khartoum, a U.S. official said on Friday.

Princeton Lyman, the U.S. special representative for Sudan, said the Treasury Department would soon clarify how companies may apply for U.S. licenses to enter the oil business, saying it was a priority for the U.S. government and for South Sudan.

“I’m sure we’re going to open that door, but the rules of the game are still being worked out and that is very frustrating to the South because they want American oil companies there,” Lyman told a trade briefing in Washington.

“There is a task force working on it and they will, God willing, have something soon.”

The United States imposed a series of sanctions on Sudan in 1997, accusing the government of human rights abuses and supporting terrorism, and tightened the restrictions further in 2006 over the separate conflict in Sudan’s Darfur region.

When South Sudan declared independence from the north in July, the United States said it was no longer covered by the existing sanctions regime.

But since the two countries’ oil industries are so interconnected, it has been impossible for U.S. oil companies to get a piece of the market now dominated by Chinese, Indian and Malaysian companies.

Sanctions drove out Chevron Corp , Marathon Oil Corp and other Western companies, but industry sources say many are keeping their options open about reviving investments in the oil-rich African country. China National Petroleum Corp, Malaysia’s Petronas and India’s Oil and Natural Gas Corp are among the oil firms now operating in South Sudan.

Lyman said the United States could not quickly remove the sanctions, which would require congressional approval.

But he said the Treasury Department would define new criteria for licensing oil deals that would provide only “incidental” benefits to the North, making some deals with South Sudan possible.

[chiefayic2]

South Sudan signs cooperation pact with AfDB

The African Development Bank (AfDB) has signed an agreement with the South Sudanese government to enable the bank to extend financial support to the world’s newest state, the AfDB said in a statement on Monday.

AfDB President Donald Kaberuka and South Sudanese Finance Minister Kosti Manibe Ngai, signed the general cooperation agreement in Washington, on the sidelines of the International Monetary Fund/World Bank annual meeting.

The agreement allows the AfDB to begin offering financial and technical aid to the South Sudanese government, pending its full membership of the AfDB.

The Bank President said the board of governors had endorsed the cooperation agreement with South Sudan, which would enable the bank to boost its presence in South Sudan, which clocked two months old on 9 September, 2011.

South Sudan welcomed the endorsement of the country’s national development plan and welcomed the pledged financial assistance ahead of the country’s full membership.

Ngai said the expected funding from the bank would enable the infant nation to fast-track the implementation of the projects identified under the development plan.

Kaberuka emphasized the urgent need to have the AfDB on the ground in South Sudan, saying: “This urgent need was appreciated by all the bank stakeholders, who accepted a fast-track approval of this general cooperation agreement.”

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It's business time in Juba

By Arne Doornebal, Juba

It has already been dubbed ‘the scramble for South Sudan.’ Investors from all over the world are flocking into the three-month old country, looking for investment opportunities in several sectors of the economy of the 193rd member of the United Nations. More than twenty Dutch companies visited Juba this week in a mission organized by the Netherlands-African Business Council (NABC).

“South Sudan is like a clean sheet for investors,” says Anne Itto, a high profile politician and farmer from South Sudan. “We have 640 thousand square kilometers of land which is mostly arable. The agricultural sector can flourish here.”

Changing the mentality

Agriculture, energy, transport and construction are the main areas of interest of the Dutch trade mission. “This is a very important moment for Dutch companies to invest in South Sudan,” says former Dutch Minister for Development Cooperation Agnes van Ardenne, who leads the Dutch delegation. “After twenty years of war this country needs to develop its economy. It is time for us to change the mentality of development aid to a business approach.”

Matchmaking instead of PowerPoint presentations

While the Dutch delegation was in a meeting with South Sudanese businessmen in one of Juba’s hotels, the room next door was reserved for a Japanese delegation. And a trade mission from India is expected in Juba shortly. “Since independence, many people came to South Sudan for business. But I am not afraid that we will be looted; our government will see to it that that won’t happen,” says Anne Itto.

“In our approach we like to work together with the local business people,” says Van Ardenne, who knows South Sudan well from her ministerial days. “We prefer ‘matchmaking events’ over giving glossy PowerPoint presentations to the government, although we acknowledge that they are crucial in setting the business climate.”

Virgin for investors

“Almost all fruit and vegetables in Juba are being imported from Uganda,” says Ed Swier of the Dutch seed company Bakker Brothers, while inspecting Juba’s Konyo Konyo market, where most traders are Ugandans. Swier sees a good opportunity here to sell seeds to local farmers. “I expect to start working with our local partner and bring our seeds on the market here very soon,” Swier says.

Delegation leader Van Ardenne has another success story to report - a renewable energy project: “Two of our companies have found a local partner who was looking for the suitable knowledge. Together they will set up a small facility.”

Big Dutch companies trading in cars, lorries and buses also take part in the trade mission. South Sudan seems to be interested in any kind of business, since many areas of the economy need to be developed. In the words of the South Sudanese Agriculture Minister Betty Achan: “South Sudan is a virgin for investors.”
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South Sudan introduces piaster notes

Thursday, 20 October 2011 19:43 Economy >>>


The Central Bank of South Sudan has put the new piaster notes into circulation.

The new notes went into circulation on Wednesday in the denominations of 5, 10, 25, and 50 piasters. They will make it possible to purchase smaller items that cost less than a pound, the Central Bank Governor Kornelio Koriom, told Radio Miraya on Thursday.

The South Sudanese Pound became legal tender following the declaration of the country's independence on July 9 2011.

[chiefayic2]

China grants South Sudan $31.5 mln for development projects

October 24, 2011 (JUBA) – The Chinese government today extended a grant of 200 million Yuan (about 31.5 million US dollars) to South Sudan for development projects in the newly independent state.

The grant was announced on Monday in Juba after a meeting between the South Sudanese minister of Information and Broadcasting, Barnaba Marial Benjamin and the Chinese Ambassador to Juba, Li Zhiguo.

Ambassador Zhiguo said the grant is dedicated to support agriculture, education, health and water supply projects. He further said that Beijing’s government will donate a number of radio stations to South Sudan to promote media development.

He further said that Chinese officials are in consultations with their counterparts in South Sudan to determine more development projects to be implemented where there are real needs. He pledged that Chinese enterprises will start their work soon after the end of the current discussion.

Minister Barnaba welcomed the Chinese gesture and praised Beijing’s tangible support for the South Sudan’s development endeavors.

"We want you to look comprehensively in the areas of investment as well as education, especially university education, which is constantly facing infrastructural and personnel challenges," he said.

Last August during a visit to Juba, the Chinese foreign minister Yang Jiechi said his country will continue to develop “friendly cooperation” with South Sudan, including providing aid.

After a meeting with the South Sudan President Salva Kiir in August, Yang emphasized that the two countries should enhance cooperation in the fields of oil, mining, agriculture and infrastructure construction. He further said China will continue to help South Sudan promote development and improve people’s living conditions.

China, which will receive Salva Kiir in December of this year for more talks on development projects and economic cooperation, is the first oil producer in South Sudan.

Last September, Juba said it will respect previous oil contracts signed between the Sudanese and other investors, before the independence of the South Sudan on 9 July 2011.

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AECF launches funding competition in South Sudan

JUBA, 28 October 2011 – The Africa Enterprise Challenge Fund (AECF), which provides investment support to businesses which wish to implement innovative, commercially viable investment ideas has launched a competition for funding in South Sudan.


The AECF is a US$ 150 million fund backed by leading development finance institutions and hosted by the Alliance for Green Revolution in Africa (AGRA) supporting the private sector. It also supports businesses working in agriculture, rural financial services, renewable energy and technology to assist small farmers to adopt climate change. It also supports initiatives in the media and information services relating to these sectors.


Through an open and transparent “competition” for investment support in the form of grant and interest free loans, the AECF seeks to promote risk taking and innovation amongst established businesses and encourage new ones and create opportunities for the rural poor.


The AECF provides grants and interest free loans from a minimum of US$100,000 to a maximum of US$1.5 million per project. The applicants must provide matching funds of at least the equal amount to that requested from the AECF.


The competition will be amongst South Sudanese, African and international companies .To qualify for funding a project should be commercially viable and have a positive impact on the rural poor in South Sudan to increase incomes and employment for poor people through reduced costs and improved productivity.


The UKAid is the sole funder of the AECF South Sudan Window. Other funders are the Australian Government Aid Programme, Consultative Group to Assist the Poor (CGAP), the Danish International Development Agency (DANIDA), the UK Department for International Development( IFAD/ and UKAid ), the International Fund for Agricultural Development (IFAD) and the Netherlands Ministry of Foreign Affairs (NMFA).

[Ras Siyan]

Djibouti / South Sudan

Business Opportunities

At the head of a national delegation, the chairman of the authority of ports and free zones in Djibouti, Aboubaker Omar Hadi, participated in the work of the conference on investment and trade, which began last Friday at the center Nyakouron Cultural Juba. On the sidelines of this meeting, the senior Djiboutian officials met with South Sudan with whom he discussed the business opportunities between the two countries. The quality of services as the autonomous port of Djibouti and the International Container Terminal Doraleh offer.

A national delegation, led by the President of the authority of ports and free zones in Djibouti, Aboubaker Omar Hadi, held on the evening of Friday an official reception at the Hotel New Sudan in Juba, the capital of the Republic of South Sudan.

Some 200 people including the Minister of Agriculture of South Sudan and several businessmen in the country attended a screening of the ports and free zones in Djibouti Djibouti.

The quality of services as the autonomous port of Djibouti and the International Container Terminal Doraleh offer. For its part, the Minister of Agriculture of South Sudan has welcomed the Djibouti delegation on the sidelines of this projection.

On the morning of that day last Friday, the secretary general of the Chamber of Commerce of Southern Sudan, Simon Deng, received the President of the authority of ports and free zones in Djibouti, Aboubaker Omar Hadi.

The two officials discussed the economic relations existing between the two countries. The next day, Saturday, October 8, 2011, the chairman of the authority of ports and free zones in Djibouti met the Ethiopian ambassador accredited to Juba in southern Sudan where the two men discussed relations between the two countries.

Many initial contacts took place on the sidelines of the conference on investment and trade, which began last Friday Nyakouron cultural center in Juba.

In short, these meetings were a good opportunity for the mission of M Aboubaker Omar Hadi to highlight business opportunities in Djibouti to the South Sudan hosts and other participating delegations.

source

Original article in French, sorry for the quality, google translation

The potential for Djibouti-South Sudan cooperation/trade is there

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Qatar National Bank Group opens its first branch in Juba, South Sudan

Qatar National Bank (QNB) Group, the financial institution in Qatar, announced the inauguration of its first branch in Juba, the largest city and the Capital of the Republic of South Sudan. The country which came into existence in July 2011, is the newest independent nation in the world.

QNB Group obtained the necessary license and approval form the Central Bank of South Sudan to commence business from its first branch in the capital, Juba.

QNB is the first GCC and foreign Bank to open a branch in Juba, after its official independence.

The branch will offer a full range of banking services and products to corporate entities, and government, such as advisory services including corporate, project and trade finance. In addition, it will provide various services for individuals, including fixed deposits and current accounts and wealth management.

QNB's new branch will contribute to the development of the Economic sector of the Country focusing on the business and banking relationship between South Sudan and the international banking and Business communities.

QNB's corporate finance, asset management and investment banking services are accompanied by advanced advisory capabilities and a long track record of success in the Middle East and North Africa (MENA) region, where the Bank has advised and participated in numerous high profile transactions. The Bank has extensive experience in research, economics and analytics in the region.

Since newly independent, Juba has become an even more important city. South Sudan holds strong economic potential and is expected to develop rapidly. Key factors among these areas are infrastructure development projects and the overall elevation of GDP per capita through the promotion of international trade and commerce by the government.

QNB's long term expansion plans in the region involves providing corporate banking and project financing facilities to leading organizations and governments.

QNB is one of the highest rated banks in the Middle East and North Africa Region based on leading credit rating agencies including Standard & Poor's, Moody's, Fitch, and Capital Intelligence. The Bank has also been the recipient of many awards from leading international specialized financial publications for its innovative products, services and remarkable performance.

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South Sudan wants investors for refinery

CAPE TOWN (Reuters) - Africa's newest country South Sudan is looking for foreign investors to help build a refinery, a government official said on Wednesday.

"We are keen to attract investors to develop a refinery to meet local and regional needs ... This is one of our most important needs," Elizabeth James Bol, the country's deputy minister of petroleum and mines, told the Africa Upstream conference in Cape Town, which is part of Africa Oil Week.

South Sudan became independent on July 9 after a referendum agreed under a 2005 peace deal with its former civil war foe, Khartoum.

Land-locked South Sudan took most of the country's oil reserves with it and produces about 380,000 barrels per day, the deputy minister said.

A refinery would be a major undertaking in the impoverished and war-shattered country, which has little in the way of infrastructure.

It would also lessen its dependence on Sudan. The oil sectors of the two nations are inter-linked, and this makes it difficult for U.S. investors to go into South Sudan because of sanctions and restrictions that Washington still imposes on the north.

The deputy minister also said there were several blocks under development in the country where investment and partnership opportunities still existed.

Reuters

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States and Central government agree to harmonise taxation

Thursday, 10 November 2011 20:16 Economy >>>

The central and states’ governments have resolved to streamline and harmonise the system of tax collection in the country.

The decision was announced on Thursday, after a two-day meeting in Juba between the Ministry of finance and finance ministers from the ten states of South Sudan.

The South Sudan Deputy Minister of Finance and Economic Planning, Marial Awou Yol, told reporters in Juba that streamlining the taxation system is a significant step towards government’s efforts to implement a single unit of taxation.

The meeting also resolved to meet the Intergovernmental Fiscal Relation Taskforce annually to discuss matters of finance.
Miraya

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S.Sudan to revamp factories shuttered by war-official

* Country eager to reduce dependence on imports, oil

* Independence has sparked investor interest, official says

* Many South Sudanese optimistic after independence

By Alexander Dziadosz

JUBA, Nov 17 (Reuters) - South Sudan plans to invite investors to revamp about eight food, cement and textile plants shut down during a decades-long civil war, in a push to create jobs and reduce dependence on imports, an investment official said on Thursday.

South Sudan declared independence in July and is eager to draw in foreign investors to help build an economy devastated during one of Africa's longest and deadliest conflicts.

It also wants to diversify its economy away from oil, which provides some 98 percent of state revenues, and reduce its heavy dependence on goods shipped in from abroad, particularly from its former civil war enemy, Sudan.

Ministry of Commerce, Industry and Investment Undersecretary Elizabeth Manoa Majok said the country aimed to seek bids on the first factory, an edible oils plant in the country's Lakes state, in the first quarter of next year.

"We are receiving a report (on the factory) at the end of this year, so the first quarter of the year we want to engage the potential investors in that area," she told Reuters in an interview, adding it may be tendered as a public-private partnership. The factory dates back to 1948, British colonial rule in Sudan, and covered about 56,000 square metres, information provided by the ministry said.

Civil war waged for all but a few years since 1955 has left South Sudan with an almost complete lack of infrastructure and industry, aside from oil. The country has few paved roads outside the capital, Juba, and large parts become inaccessible by ground transport during the rainy season.

Often described as one of the world's least-developed nations, it has high levels of poverty, illiteracy and maternal mortality rates. Hospitals and schools are scarce.

INVESTOR INTEREST

Majok said South Sudan had seen a surge of investor interest since independence, although a lack of infrastructure, dependence on imports, a lack of local training and other issues still posed deep challenges.

"That is why we are tackling the defunct factories. If they are to come onto the scene, it will reduce a lot of imports. We are actually channeling a lot of our hard currency outside," she said.

Majok said she was unable to give an indication of amount of investment the country was looking for, or the number of jobs it hoped to create, until the completion of assessments by external consultants.

After the edible oils factory, the government plans to develop a cement factory in Eastern Equatoria state, aiming to find an investor within 10 months.Two textile factories would follow, and the remainder -- which include sugar and canning -- would be assessed afterwards.

South Sudan split off into a separate country after voting for independence from Sudan in a January referendum promised in a 2005 peace deal that ended the civil war.

One of the main motivations for the former rebel movement was the complaint they had been economically marginalised by Khartoum.

"It (independence) will allow us to decide our own destiny, it will allow us to control our resources. Because the resources of the south were being used to develop the north. That was a fact," Majok said. (Editing by Sophie Hares)

Reuters

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South Sudan Central Bank introduces new payment systems

November 30, 2011 (JUBA) - The Central Bank of South Sudan on Wednesday announced it was embarking on a modernisation of the country’s payments, clearing and settlement systems.


Kornelio Koryom Mayiik (Getty)

Bank officials say the development will be part of a national payments system plan which forms an integral part of the prerequisites for effective financial management regulation and monitoring.

Speaking to reporters at the bank’s board room, Kornelio Koryom Mayiik, the central Bank Governor said the initiative is part of the Central Bank’s strategic vision of modernising the payments and settlement system into one comparable with the rest of the world.

“The system will lower costs, make payments and settlements more accurate and pave the way for increased financial innovations in the country”, Mayiik told journalists.

He said the new process includes the establishment of what he called Real Time Gross Settlement System (RTGS), the Automated Cheque Processing/Automated Clearing House (ACP/ACH), Securities Settlement System (SSS) and an electronic National Switch for retail payments.

The top bank official elaborated that the rationale for the initiative is justified by the fact that South Sudan remains a cash based economy, with payments of large transactions requiring the movement of cash and its attendant risks. The continued dependence on cash payments, he said, also results in delays in cheque processing and inefficiency.

The official noted that the cost of printing currency is quite high, so using plastic cards under the National Switch project would save the nascent nation money. South Sudan became independent less than five months ago and issued it new currency just days after secession from north Sudan.

He added that the Central Bank currently operates a manual cheque clearing system, where commercial banks meet to physically exchange cheques and net balances settled through their current accounts held with the Central Bank, which is time consuming and less efficient in detecting cheque frauds. The delay in confirmation of customer balances due to the lack of real time gross settlement systems results to the acceptance of cheques, which would otherwise be rejected outright.

“Some of these cheques turn out to be dishonored due to various reasons; and the bank has registered insignificant progress in her socio-economic development, simply because it is a consuming country which produces and exports nothing apart from oil. We just became an independent nation. We did not have anything before. So we are trying to consolidate our efforts as bank through the modernisation of the payments system and the creation of a conducive environment for further growth”, he asserted.

The systems when fully functional, he said, will help the Central Bank eliminate or minimize risks associated with payments, clearing and settlement system, eliminate float size for individual customers and banks as well as significantly reduce the float time for cheque clearance, with the possibility of reducing the clearance time from five days to one day in addition to combating fraud and forgery, pave way for reducing high case intensity and gradual migration to high usage of electronic modes of payment, and bring efficiency to government receipts and payments and all other consumers and leverage them for financial deepening of the economy.

“It will also ensure compliance with international principles and standards, especially the core principles for the Systematically Important Payments Systems (SIPS) of the Bank for International Settlement (BIS) and enhance the Central Bank’s monetary management capabilities.

Explaining the techniques behind the initiative, the central bank chief noted that in their quest to ensure the realisation of government’s vision, the Central Bank wishes to harness technology to its advantage and the rest of the financial system. He said the applicable technology in the field of finance enables the elimination of heavy dependence on physical movement of cheques for clearing purposes.

It presents the fastest and most secure mode for clearing cheques through digital means and replaces the physical exchange of cheques between the presenting and paying banks. However, the effectiveness of the system depends largely on how users handle cheques.

He further revealed that the Central Bank will soon embark on a sensitisation process geared towards educating the public on the up-coming plans and the importance of careful handling of cheques.

He also took the opportunity to inform the general public that under the new system, "all cheques payable through our banking system shall be in compliance with specific characteristics, critical among which is the Magnetic Ink Character Recognition (MICR) code."

The MICR represents a unique code which is inscribed on each cheque leaf and forms the basis of electronic processing. Once the cheque passes through a scanner, an image is generated, which passes through the system electronically for timely confirmation of customer balances and the immediate payment of beneficiaries where applicable.

However, the scanner cannot capture images of damaged cheques, which may result to processing failure. Cheques, he emphasised may be damaged through, writing on the MICR code area, folding of cheques in a form which may prevent its passage through the scanning machine, soiling of cheques with oils, paints or other permanent marks, wear and tear of cheques due to poor storage facilities, stapling of cheques, forgeries aimed at defrauding the system among others.

Governor Mayiik said that all banks would be adequately equipped to implement the new measures. He said he hoped the public would cooperate to help the full implementation of the new payments system.

(ST)

[chiefayic2]

South Sudan signs MoU with UAE Investment Company

January 11, 2012 (ABU DHABI) – As part of the ongoing efforts to mobilise foreign investment South Sudan has signed a Memorandum of Understanding (MoU) with Abu Dhabi Investment Company of the United Arab Emirates (UAE) in order to invest in various sectors in the six month old country.

The Abu Dhabi Investment Company, also known as ‘Investment AD’, was founded in 1977 by decree of the former President of the United Arab Emirates and ruler of Abu Dhabi, late Sheikh Zayed Bin Sultan Al Nahyan. It was originally set up to invest on behalf of the Abu Dhabi government.

In 2007 the company was given a new mandate, to attract and manage third-party funds, in addition to the investment of government assets.

Owned by the Abu Dhabi Investment Council, Invest AD is closely aligned with the long-term diversification and growth objectives of the Abu Dhabi authorities as expressed in the government’s long-term strategy, the Abu Dhabi 2030 Vision, with special focus on Africa and the Middle East.

The Company has expressed its willingness and readiness to invest in South Sudan and also help to mobilise other partners from Europe, America and Asia to invest.

On Wednesday, in Abu Dhabi city, South Sudan’s Vice President, Riek Machar, signed the MoU with the Company’s CEO, Nazem Fawwaz Al Kudsi.

The signing ceremony was witnessed by the South Sudan minister of Roads and Bridges, Gier Chuang Aluong, Governor of Unity state, Taban Deng Gai and Bank of South Sudan’s governor, Cornelio Koryom Mayik, among others.

The visit to UAE come after Machar’s delegation attended a conference in India.

Areas of cooperation and investment covered by the MOU include railways, roads and bridges, housing estate, aviation, shipping, energy and utilities, oil and gas services, financing and securitisation, telecommunications, IT services, minerals and mining, banking, sports facilities, among others.

Relevant ministries in South Sudan will work out the details of the priority areas or projects with the company.

The governor of Unity state, Taban Deng Gai, to this effect also signed a MoU with the same company, at the same occasion, on infrastructures projects in his state.

The Vice President’s Press Secretary, James Gatdet Dak, also said Machar met with a number of other potential investors who similarly expressed their interest to invest in the oil producing fertile country.

Macahr told the investors that his country is managing high expectations of the people after the region gained independence from north Sudan in July 2011.

(ST)