{UAH} What is there to gain by fighting in South Sudan?

Sometime in 2005, Riek Machar, together with Rebecca Garang De Mabior, came to attend a conference at Speke Resort Munyonyo, on investing in South Sudan.

The room – the Victoria ballroom – was full to the brim. The rhetoric around that conference was that Southern Sudan was a virgin market looking for investors.

Machar, then the deputy chairman of the Sudan People’s Liberation Movement, also came with a couple of trade officials. Many of them were bush war heroes, with titles that began with colonel or commander. Business cards were exchanged with buoyancy.

When Machar spoke, he raised the level of optimism a notch higher. He said Southern Sudan was ready to embrace Ugandan traders and investors.

He added that Ugandans would be considered first for a number of contracts. Machar explained that it was Uganda that stood alongside Southern Sudan for a bigger part of their two-decade war against President Omar Bashir’s forces, through offering military machinery or hosting refugees.

SPLM had just signed a peace deal with its long-warring foe, President Bashir of Sudan, to end the hostilities. At the time, Ugandan and Kenyan investors were already flying into the South Sudan capital of Juba to cut million-dollar deals, many of them to do with construction and anything else related to the huge oil finds in the region.

In Uganda, the word on the street was just how expensive a mineral water bottle was selling in the South Sudan capital of Juba. A bottle, some said, went for roughly $5, compared to half a dollar (or less, depending on where you bought it) in Kampala. Other foodstuffs like matooke were in high demand in South Sudan.

To make matters even easier, at one point it was okay to trade in Ugandan currency in South Sudan, meaning that traders did not have to lose any shilling to foreign exchange conversions. In fact, Bank of Uganda at one point in 2008 estimated that up to Shs 40bn had been floating around in South Sudan.

Around 2007, while returning from a reporting trip in West Nile, I boarded a bus that was coming from South Sudan. After a couple of hours of the torturous drive, I started chatting up two Ugandans. They were coming from Yei in South Sudan. I was curious to know what they were doing in South Sudan, and how the business prospects there were.

One of them told me he was a teacher, and that the money was fairly better than what we got in Kampala. The other, who was less talkative, told me things were not that easy in Yei. His job: a porter, who occasionally made bricks!

Even with the olive branch from Machar, and the benefit of trading in our own currency during the early years of South Sudan, Ugandan traders still cannot punch above their weight, preferring to engage in less-paying jobs, while the Kenyans and South Africans eye the bigger deals.

Less than a year ago, the South Sudan government chased away Ugandans in the petty transport business of boda boda, arguing that they wanted serious investors. That said, one wonders what it is that Uganda intends to benefit by yet again engaging in war in South Sudan. Just how much is Uganda spending on its military campaign in South Sudan? And who, exactly, is picking up this bill?

Uganda’s Members of Parliament have for the last couple of days pushed an army general, and other government officials, to the wall to explain whether there was a formal invitation from the South Sudan government to Uganda to intervene in the war. That letter remains a mystery.

The legislators are missing the bigger picture. Instead, the MPs should be concerned about our economic interests in South Sudan. That South Sudan is our major export market – the country earns about $20m per month - should not be the underlying reason; it is what we export there that should matter. In any case, the foods we mainly export to South Sudan also expose us to inflationary spikes as a result of a shortage here.

Funding the campaign is expensive. The tax revenues are not growing as much as expected, while the donors have cut aid, leaving the public to shoulder the biggest part of public expenditure.

China, Kenya and South Africa do not have troops on the ground in South Sudan. Uganda has its army knee-deep into the war. My well-considered view is that when we do the final analysis, we are likely to find that it was a blunder for Uganda to go to war in the first place - unless our economy can benefit. For now, all indications are that it is getting hurt.  

jeff@observer.ug 

The author is the business editor at The Observer.
Twitter: @jeff_mbanga

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 *“Those who make peaceful revolution impossible will make violent

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