Sudan peace spurs growth in Uganda

In Part IV of our Road Trip to Juba series, which is part of our extended coverage of the Southern Sudan referendum due to take place on January 9, Benon Herbert Oluka makes a stopover in Gulu District. He reports that Gulu’s remarkable turn-around within five years since 2005, after years of being crippled by the Lord’s Resistance Army rebel war and Southern Sudan by its war with the Khartoum government, offers testimony of the economic benefits that Uganda can reap from its ties with a peaceful Southern Sudan – united with the north or otherwise: -

Awere Street is four other streets away from the main street of Gulu Town, the gateway to northern Uganda’s largest commercial urban centre. Five years ago, as the governments of Uganda and Sudan were struggling for peaceful resolutions to their respective wars that had lasted at least 20 years each, Awere Street hosted only Gulu market and was lined on the sides by buildings that had seen better days.

Today, Awere Street is bustling with more activity than before. Besides the market, Awere Street now hosts a branch of two leading banking institutions; Bank of Africa and Orient Bank. From some of the services that the banks offer, they are clearly not tapping into just the potential offered by locals in Gulu. Each of the banks maintains Automated Teller Machines (ATMs) that offer VISA card services.

Development
A considerable number of the structures that line either side of Awere Street have also grown higher, as the structures either undergo refurbishment or new ones replace those that were there before.

Such developments are not limited to Awere Street; they have swept through Gulu at a rather impressive speed. Over the last three years, seven commercial banks have opened branches in Gulu Town compared to only one bank less than four years ago.

And the developments are not just in the banking sector. The hospitality industry has grown in leaps and bounds, the number of buses plying the Kampala-Gulu-Juba route have gone up so much it is now one of the most competitive routes in the country. Toyota Uganda has opened a showroom in Gulu, and, in the agricultural sector that employs the majority of the people in northern Uganda, the prices of food crops have gone up several times.

According to Mr Willy Olango, the former Speaker of the Gulu District Council, the developments in the area are not just a result of the return to peace in the district since the LRA was thrown out of Ugandan territory. He says a large part of the success in Gulu’s economy is down to the opening of the trade route between northern Uganda and Southern Sudan since the signing of the Comprehensive Peace Agreement (CPA) between Sudan’s north and south, which ended a 21-year-old war.

Mr Olango said among the greatest dividends from peace across the border is easy transportation within northern Uganda. “That is the biggest achievement,” he said. “You can leave Kampala even at midnight using those buses going to Juba. People in Atiak can board buses going to Juba even at mid-night. Not like those days before the signing of the CPA, when it was really a challenge. You had to go to book a flight to Juba.”

To Mr Olango, the level of mobility of the people alone is a good measure of the economic progress that a society is making. He said: “An economy is improved when people move. You can assess the economic level of a particular region by the movement of the people because if you move, it means there is something driving you to move and that is one way of getting money.”

Gulu is, however, not enjoying the economic benefits of the peaceful situation in Southern Sudan all alone. In fact, the majority of the benefits have found their way to several places beyond northern Uganda because of the diversity of the people engaged in trade with Southern Sudan.

According to the latest available statistics from the Uganda Export Promotion Board, since the signing of the CPA, trade between Uganda and Southern Sudan has increased three-fold. Currently, Southern Sudan is the largest importer of Uganda products, with the latest statistics showing that the number of exports from Uganda to Sudan rose from $91.7 million in 2006 to $257.9 million in 2008.

Those figures exclude informal trade, according to the Uganda Bureau of Statistics (UBOS), which said in a June 2009 report that Uganda’s informal cross-border sales into Southern Sudan alone reached more than $900 million in 2008 – twice the 2007 figure.

In addition, according to a paper prepared by Dr Sallie Kayunga Simba of the Makerere University Department of Political Science and Public Administration, Ugandans are believed to be the largest group of foreign national living in Southern Sudan. “In case the people of Southern Sudan go for self-determination, Uganda has a lot to gain,” he said, while presenting his paper at a regional symposium on Sudan’s neighbours and South Sudan Referendum on Self-Determination on October 2-3, 2010, in Khartoum. The symposium was organised by the Peace Research Institute PRI-University of Khartoum and Society Study Centre.

Mr Olango agrees. He adds: the benefits that Uganda has reaped so far are just the tip of the iceberg because Southern Sudan does not yet have the capacity to cater for the majority of its basic needs. “We have a lot to gain, particularly in northern Uganda here,” he argued. “Right now, the majority of our schools are predominantly filled up by Sudanese. Now, so long as we have peace there, we are very sure the population will shoot up.”

Yet that is not even the biggest catch, according to Mr Olango. “I don’t think the government of Southern Sudan would prefer to have their oil go through Khartoum,” he said, quite emphatically. “If you have that pipeline passing through here to join up with ours, it means it will also help us create employment opportunities.”

If the activities undertaken by the government in the recent past are anything to go by, then it is clear that it has recognised the benefits that the country can reap from its economic relationship with Southern Sudan and is making all efforts to cash in.

The government has undertaken the construction of the 104-kilometre Gulu-Atiak-Bibia-Nimule road at a cost of $201 million, most of it financed by the United Stated Agency for International Development.

It has also signed several trade agreements with the Government of Southern Sudan, allocated $2 million for the construction of a market in Juba for Ugandans to sell their goods, and revived plans to revamp the defunct regional railway system and extend the railway from Gulu to Juba.

In addition, the Uganda Export Promotion Board organised a trade Expo in Juba on February 10-14, 2010, reportedly to showcase Uganda goods and to cultivate links between the business communities of the two countries.

Discussing the importance of tapping into the opportunities offered by Sudan at a briefing about the Expo earlier, the Minister of State for Trade, Eng. Nelson Gagawala Wambuzi, said: “That growing market cannot go untapped. Uganda helped in bringing back peace in South Sudan and we have to take advantage of it instead of seeing other countries dominating the virgin market.”

If Uganda has to exploit all the opportunities on offer, however, analysts believe the two countries will have to iron out some of the major challenges that continue to bedevil trade between them.

According to Mr Olango, the Uganda government will have to find different avenues to ensure that ordinary Ugandans benefit rather than leaving it as a reserve for the middle class business people.
“The production here is by these peasant farmers. All they know is that there is going to be voting but they don’t even understand what the referendum is all about and how they stand to gain from what could happen there. It is the elites who understand these things and they should go to sensitise the peasant farmers and mobilise the community to access these markets and benefit from them,” he said.

Mr Olango also believes that the government of Southern Sudan will have to ensure that it eliminates the petty insecurity that is relevant in Juba and other cities in Southern Sudan. “There is an element of lawlessness in Sudan where you find you are arrested and tortured at will and many Ugandans have lost money,” he said.

“There is also illegal killing of Ugandans. It looks as if when you are in Juba, you need to have a godfather from the rank of a Brigadier onwards so that you go around undisturbed, which I think is a weakness. But in a situation where the whole place is peaceful and you can move freely, then you can have direct access to the market. At the end of the day, it will help to boost production and also challenge people to add value. This will become a main basket for them.”

However, even as Uganda waits for the referendum to decide the fate of Southern Sudan, and for any reforms to improve the climate for doing business, Mr Olango says the benefits from a peaceful Southern Sudan – whether it is united with the north or not – will not only be of economic nature.

“At the end of the day,” he explained, “the peace alone will be enough for us because most of our problems in northern Uganda have started because of instability in Southern Sudan. But if Sudan is peaceful, there will be no hideout for any rebel group coming to terrorise the people in northern Uganda.”