Observer.ug: Cost of South Sudan crisis hits traders

Arua Park, once the bustling section of downtown Kampala, has lost its mojo to the war in South Sudan, writes ALI TWAHA & ABUBAKER MAYEMBA.

The chaos that defined the stretch at Arua park has been replaced with calm, while the groovy hype that hovered over the area has turned moody. Arua park is the main hub for those travelling to South Sudan.

But since the war broke out – first in December 2013 and then the most recent in June – life has turned sulky in South Sudan. Ali Amin, a truck driver with Nile Coaches company, said the number of customers has tanked.

“We used to have customers from South Sudan to buy goods from here, and then export them via Koboko and Nimule. We can no longer take luggage to Juba since the war began,” he said.

Sylvia Nalubuulwa, the attendant at Crown Coaches, says they have reduced the number of buses they flag off to Juba, the capital of South Sudan.

“Normally we send two buses and two others return to Kampala daily but because of the situation, we are sending one. You can send one today and it comes back after two days,” she says.

A ticket to South Sudan for all buses plying the route ranges between Shs 40,000 and Shs 50,000. However, the Sudanese-owned Echo bus, which faces little trouble, charges Shs 90,000 to Juba. Other buses only stop at the border point and would only proceed to Juba with their security assured. 

Traders in Kikuubo in downtown Kampala are feeling the impact. Florence Kaitesi, a dealer in body care products and clothes, says orders from clients have dramatically come down.

Uganda’s leading exports to South Sudan are cereals and flour, sugar, iron and steel, cement, beers and soft drinks, motor vehicle re-exports, vegetable oils and soap lubricants, according to traders who operate there.

SITUATION FAR FROM CALM

South Sudan remains a key trading partner for Uganda. For example, in 2012, Uganda’s exports to South Sudan accounted for $132.8 million, accounting for 4.7 per cent of Uganda’s exports to, according to the 2015 statistical abstract for the Uganda Bureau of Statistics. However, in 2014, the number jumped to almost $400m in 2014, representing nearly 15 per cent of the total share of exports, three times more than it was two years earlier.

Patrick Ntege Walusimbi, the chairman of Ugandan traders’ association in South Sudan, says the situation in the country is volatile.

“Working conditions in South Sudan have never been good. I don’t know why government doesn’t tell people about this,” he says. He said the situation in the country is very fragile.

Most traders, he explained, were forced to leave their businesses during the recent Uganda People’s Defence Force evacuation mission.

“When the UPDF came, they told traders that their mission was only to save lives, not property. A lot of businesses were looted in the process,” he explained.
“Traders are suffering in that country. Government’s intervention, ever since 2013, has not yielded much… We have claims which have never been settled by government,” he says.

WAY FORWARD

Speaking to The Observer, Everest Kayondo, the chairman of Kampala City Traders Association (Kacita), said Uganda loses about Shs 3.3bn whenever conflict breaks out in Juba.

“We receive $360m (nearly Shs 1.2tn) per annum from S. Sudan. That means we earn one million dollars a day. So, whenever there is war, that’s how much we lose in a day,” Kayondo said.

According to Kayondo, Kacita has engaged with most traders and warned them against going back to South Sudan, citing the several peace deals that have been signed yet they keep collapsing.

“Some of them [traders] go back because they think they can create new opportunities,” he says. “Others think the higher the risk, the higher the profit. So, they have always gone back against our advice.”

Although South Sudan remains one of the leading export earners for the country, traders, according to Kayondo, should reconsider investing their resources there.

“Our alternative is to urge government to develop a new market at the [Nimule] border. They [the South Sudanese] can come and collect the goods at the Ugandan side,” Kayondo explained.

Gideon Badagawa, the executive director, Private Sector Foundation Uganda, agrees with the decision for Ugandan traders to leave South Sudan. He says that although Uganda needs the market, the security in South Sudan cannot be guaranteed.

“Government should focus more on improving the domestic market because it gives more assurance and control,” he says.

He continued: “Most businesses will continue to suffer because no insurance firm is going to give cover [to traders] with the current situation.”

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Additional reporting by Justus Lyatuu