VZCZCXYZ0000
RR RUEHWEB

DE RUEHKH #0257/01 0331250
ZNR UUUUU ZZH
R 021250Z FEB 06
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC 1265
INFO RUEHNR/AMEMBASSY NAIROBI 0412
RUEHKM/AMEMBASSY KAMPALA 0039
RUEHSA/AMEMBASSY PRETORIA 0032
RUEHEG/AMEMBASSY CAIRO 0068
RUEHDS/AMEMBASSY ADDIS ABABA 0071
RHEHNSC/NSC WASHDC

UNCLAS KHARTOUM 000257 
 
SIPDIS 
 
SIPDIS, SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EFIN ECON PGOV SU SA UG KE
SUBJECT:  JUBA OPENS ITS FIRST COMMERCIAL BANK 
 
 
¶1. (U) SUMMARY:  In a three-hour ceremony on February 1, 
a large gathering of influential southern Sudanese, 
supported by a large crowd, celebrated the official 
opening of the Nile Commercial Bank (NCB), the first 
institution of its kind in Juba.  NCB was reportedly the 
brainchild of John Garang, who pressed for the 
development of institutions in areas held by the SPLA. 
The NCB was constituted by a group of investors, with 
SPLA support, in Yambio in January 2002.  It opened its 
first branch there in September 2004, in Rumbek in early 
2004, and in Juba in September 2005.  End Summary. 
 
------------------------ 
Strengths and Weaknesses 
------------------------ 
 
¶2. (U) Executive Director Aggrey Idris listed the 
services the bank would offer: checking and savings 
accounts, money transfers between five southern cites and 
Nairobi and Kampala, commercial loans and micro finance, 
letters of credit, and salary advance loans for those 
employed by the GoSS and NGOs.  He described NCB's 
affiliation with the Standard Bank Group of South Africa 
through the affiliate Stanbic of Kenya and Uganda. 
Stanbic had provided training for 51 NCB employees, and 
in March 2006 NCB expected to be computerized and linked 
to the outside world through its own VSAT.  They expected 
to expand into Malakal, Wau and Renk by the end of the 
year. 
 
¶3.  (U) Idris listed the challenges that confront the 
NCB.  The lack of an autonomous Central Bank of South 
Sudan, and the resultant shortage of currency, was 
problematic.  The bank was not heavily capitalized, 
because it had access to neither donor not SPLM 
resources, and the low salaries available had attracted 
an inexperienced staff.  He stressed that the principal 
threat was the expressed desire of international and 
regional banks to locate in the South, which would create 
a competition that the fledgling NCB could not hope to 
win.  He called for the GoSS to limit outside banking 
competition during the CPA interim period, noting that 
some of NCB's would-be competitors had "supported the 
enemy" during the war.  In following remarks, the NCB 
Chairman of the Board repeated the call for GoSS 
protection, likening the situation to a parent who has 
painfully prepared food for his/her children only to see 
someone else allowed in the house to consume the feast. 
 
---------------------------------------- 
All Credit to Us, All Blame to the North 
---------------------------------------- 
 
¶4.  (SBU) James Wani Igga, Speaker of the Legislative 
Assembly of Southern Sudan, represented the GoSS.  He 
turned the event into a political pep rally, stressing 
that the SPLM was delivering on its promises of a peace 
dividend for the people, the opening of the NCB one 
important installment.  Wani Igga blasted "traders" (read 
Northern merchants) as enemies who "milked the South" and 
sent their earnings to Khartoum.  He called for measures 
to oblige traders to bank their money -- "not necessarily 
with NCB" (although there are no other options at this 
time) -- and said the GoSS must monitor such accounts. 
He added that NGOs operating in the South should also 
consider using now available local new banking 
facilities.  A six-person South African banking 
delegation attended the inauguration. 
 
------- 
Comment 
------- 
 
¶5.  (SBU) NCB's opening represents yet another step 
toward rebuilding southern institutions shattered by more 
than two decades of war.  It is on balance a positive 
step, but one that bears watching.  While it may have 
been only political bombast, Wani Igga's suggestion that 
the GoSS might consider monitoring private traders was 
noteworthy.  We have also heard unofficially that the 
GoSS intends to give NCB special, possibly monopolistic, 
privileges that could -- considering NCB's under- 
capitalization and lack of expertise -- hamper the 
establishment of a formal, competitive banking sector 
throughout the South.  In a side meeting, Idris commented 
on a report that the Kenya Commercial Bank is seeking a 
license for operations, saying that "no one wants them 
down here."  A large banner festooning the front of the 
bank building read: "Our vision is to become the leading 
finance service provider in the New Sudan."  The rhetoric 
suggested that NCB's desire is that it be the only one. 
 
HUME