Opportunities for investors in the year 2020
By: Poiya Isaac Lagu
An Investor [noun] is “a person or an Organization that invests money in something”. There are two types of investors; small scale investors and large scale investors. And to invest means “to buy property, shares in a Company, etc with the hope of making a profit”. Example; now is a good time to invest in the property market in South Sudan. Investment also means “to spend money on something in order to make it better or more successful”. To invest also means “to spend time, energy, and effort on something that you think is good or useful”. Example; She had invested all her adult life in the relationship. And investment meaning “the act of investing money in something”. Under the investment Promotion Act, 2009, in Section (5) Investor means “any person or juridical person (s) with capital, with the sole interest of entering into business enterprise (s)”. Investments are national or foreign, direct, indirect and portfolio investment. Foreign investment means “any natural or juridical person (s) who is a resident or a citizen of a foreign Country, any legal entity that was founded and registered under the laws of a foreign Country”. One of the sources of investment law is the 2011, transitional Constitution as amended, which is the supreme law of the land that provides for an economic objectives as a fundamental object and guiding principles of investment under Article 37 (2). And this article is relevant to investors, readers and researchers.
The cardinal principle is that; “No official, agency, law or other legal authority shall discriminate investors from a particular Country or give a special treatment to prospective foreign Investors based upon their Country of origin or nationality”. Foreign investors shall be subjected to the same laws that apply to domestic business organizations. Having well understood the meaning and definition of an investor and investment therewith; the common hypothetical question has always been over time in speculation and shall continue….; Are the foreign hawkers selling second hand clothes in the streets of Juba and other major Towns qualify to be called foreign investors of South Sudan? Or the shoe sellers, the Chapati sellers, those supplying water with Jerrycans using Bicycles, the breakfast Porridge, Tea and Milk suppliers and the retail shop keepers. Are they foreign investors of South Sudan? In my own words; its peculiar- thus strange or unusual and it shall be worrying for these groups to qualify as foreign investors. Well, there is need to encourage the micro businesses and involve South Sudanese to take part actively. It makes no meaning when you leave the micro businesses to be operated by the foreign person (s) although it is a free market or economy or you are shifting towards liberalization, globalization, privatization and even if South Sudan is a member of the East African Community – you can implement the Operational Principles of the Community; Article 7 1 (e) of the Treaty for the Establishment of the East African Community as amended on 20th August, 2007 that provides for “the principle of variable geometry which allows for progression in co-operation among groups within the community for wider integration schemes in various fields and at different speeds”.
To elucidate the above; in my opinion, making an investment is different per se “itself” from engaging in a trade transaction for a daily livelihood or survival of the family, what you are doing is a one-time exchange of goods and monies. The decision to invest is a long-term relationship between the investor and the host country. Often, the business plans of the investor is to sink substantial resources into the project at the outset of the investment, with the expectation of recouping this amount plus an acceptable rate of return during the subsequent period of investment, sometimes running up to ten years or more, usually the host State and the investor negotiate a deal called “An Investment Agreement” which may adapt the general legal regime of the host country to the project. While the host State shall be keen enough in attracting the investors. A good example of an investment Company is; ‘Oranto Petroleum Ltd’, Nigerian Company which is investing a lot of resources in the Petroleum sector in South Sudan and in over ten countries. But the question remains; is your investment environment attracting investors? If no, why? Is it because of fear of high commercial risks? Or guarantee for a good security.
In this regard; could the concept of investment and corporate duty be a new idea in South Sudan? Why do you think most people prefer being politicians, working in the Government or organized forces rather than in the private sector? Could there be unwillingness to spend time, energy or money or resources, and effort on something that you think is good or useful with the aim of earning profit in the future – a long run, say twenty years. Neither, most of you are not informed about the concept and purpose of investment nor do others have no capital or cash money at all. And what impact does the South Sudan – China Investment Forum, held in Beijing on 12th April, 2014 and the trade fairs that were organized in 2013 have in the investment opportunities in South Sudan? My answer is; both local and foreign potential Investors had opportunities. But, where are they? And have you developed the Specialized Economic Zone (SEZ) located in Sherikat-Juba, commonly called the “Dry Port” in the extent of attracting investors into the Country? You should utilize the investment opportunities for the Africa Growth and Opportunity Act (AGOA) which allows African Countries to export goods to USA Markets. AGOA was established to provide eligible sub-Saharan African Countries to export a wide products duty free. And the One Stop Shop Investment Centre (OSSIC) was officially launched in May, 2012, with the support from World Banks’ International Finance Corporation (IFC). These provides a guide for our Investors. But, which Factories can you establish when your power capacity-electricity is limited? Thus-using Generators as a source of power. How much tones of goods can you have in your domestic Factories to the extent of exporting them in the international Markets? And supplying water using water tankers / trucks instead of using pipe water, can you attract Investors in such a way? It should be noted that South Sudan has a lot of areas of investment such as; Diary Industries from the herd of Cattle, and Shoes from the Hides, Road construction, Estates and property developers, Banking, Schools, Oil, Water, Electricity, Mining and the abundant Nile Water that is suitable for Irrigation Farms along Nimule, Terekeka, Bor and Malakal among others. Which other State investment Company do you have apart from Nile Pet and GPOC as the main explicit State owned investment?
Suffice to that; properties of Investors should not be expropriated. “Unless the expropriation is in the national interest for public purpose and any expropriation should be in accordance with due process of laws for fair and adequate compensation as determined by the Court. There should be no pressure to the Investors in handing over assets at the end of the project. Investors should also be protected and be assured that the investment of their money (ies) need guarantees including; fair and equitable treatment, physical and legal protection, access to justice. Extra-ordinary situations should be avoided. Example; civil crisis or war like that of 2013 and 2016 of South Sudan. And arbitrary acts. However, Investors have obligations to the Community they operate in; obeying national laws, paying taxes hence; raising revenue of the Country, provide economic growth, correct market failures example; highly taxing goods which have less benefit to the public to discourage people from using such goods. Although a good tax should be equitable-thus fair and just, and simple-thus the terms of payment and economical-thus non-excessive and Investors should provide social services to Community of the area of operation among others. This is in light with Section (33, 34, and 36) of the Investment Promotion Act, 2009. The government and the local authorities shall also provide land for investment in any of the priority areas in accordance with the laws. This reflect an important interest for the Community or people living in the locality and contribute to economic and social development. This is in light with Section 61 (2) of the Land Act, 2009. And the South Sudan Investment Authority is responsible for promotion of investment facilitates and activities for economic growth in South Sudan.
Who is stopping the best opportunities for investments in your Country – South Sudan after all the times of struggle for freedom? Who is causing Investors to fear injecting their money (ies) and resources in South Sudan? It is always remembered that; the Republic of South Sudan is a member of the International Center for the Settlement of Investment Disputes (ICSID), as from April, 2012. There is a high assurances to the Investors all over the World that; the Republic of South Sudan has a system to amicably settle disputes of Investors using the available laws such as the Code of Civil Procedure Act, 2007. Specifically provides for ‘Court administered and directed Arbitration under Section (137)’. And it is clearly provided in Section (39) of the Investment Promotion Act, 2009.
In a brief Summary: you should adapt the policy framework for investment of the Organization for Economic Co-operation and Development OECD, 2006, with a focus on ten policy areas of investment, with the aims to determine the degree to which a Country is investment friendly. It includes; investment promotion, trade policy, tax, competition policy among others. And ratify the Treaty for the establishment of East African Community. Therefore, you need to identify the Investors in the year 2020, and attract them for more foreign investment by creating a conducive, peaceful, environmentally friendly atmosphere and showing a significant trend in the Bilateral Investment Treaties (BITs) or practices in the Republic of South Sudan.
The writer is a practicing Advocate & Commissioner for Oaths, Juba!