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DE RUEHNR #1049/01 1121353
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R 211353Z APR 08
FM AMEMBASSY NAIROBI
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RUEHDS/AMEMBASSY ADDIS ABABA 0055
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RUEHDR/AMEMBASSY DAR ES SALAAM 5944
RUEHDJ/AMEMBASSY DJIBOUTI 5242
RUEHKM/AMEMBASSY KAMPALA 2775
RUEHKH/AMEMBASSY KHARTOUM 2021
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UNCLAS SECTION 01 OF 03 NAIROBI 001049 
 
SIPDIS 
 
KHARTOUM PLEASE PASS TO CONSULATE JUBA 
 
STATE FOR EEB/CBA DENNIS WINSTEAD AND AF/SPG PAMELA FIERST 
 
STATE ALSO FOR AF/E AND AF/EPS 
 
STATE PLEASE PASS USTR WILLIAM JACKSON 
 
TREASURY FOR VIRGINIA BRANDON 
 
PLEASE PASS USAID/AFR/EA 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN BEXP ETRD EINV SU KE
SUBJECT: AMERICAN BUSINESS INTEREST IN SOUTHERN SUDAN 
 
REF: STATE 35331 NOTAL 
 
SENSITIVE BUT UNCLASSIFIED.  FOR INTERNAL USG DISSEMINATION ONLY. 
CONTAINS PROPRIETARY INFORMATION. 
 
PLEASE PROTECT ACCORDINGLY. 
 
¶1.  (SBU) This cable responds to reftel request to gauge sentiment 
in the Kenya-based U.S. business community with regard to doing 
business in Southern Sudan and likely participation in a suggested 
USG-organized trade mission to Juba.  In Kenya, the response of U.S. 
companies is mixed: Most are keenly interested in doing business in 
Southern Sudan, but all continue to perceive a lack of clarity in 
the U.S. sanctions regime for Sudan as a stumbling block for their 
greater participation in the Southern Sudan market.  Managing area 
directors of major companies like General Motors and Coca-Cola have 
informed the Ambassador and FCS Counselor that they will await 
approval from their corporate headquarters before venturing into the 
Southern Sudan market.  End summary. 
 
¶2.  (U) Shortly after Ambassador Ranneberger arrived in Nairobi in 
August 2006, the president and board of the American Chamber of 
Commerce of Kenya (ACCK) told him that among the Chamber's top three 
priorities was entering the Southern Sudan market.  However, 
representatives of American firms located in Nairobi say they have 
generally refrained from doing business in Sudan because USG 
sanctions policy remains unclear to them and they fear inadvertent 
violations. 
 
----------------------- 
Definite Interest . . . 
----------------------- 
 
¶3.  (SBU) ACCK board member Steven Smith, who is CEO of Eveready 
East Africa, the national chairman of both the Kenya Association of 
Manufacturers (KAM) and Kenya Private Sector Alliance (KEPSA), and a 
leading member of the East African Business Council (EABC), said 
April 16 that he and other American business leaders in the region 
remain very interested in Southern Sudan.  However, Smith said they 
have been hesitant to enter what they evaluate would be a promising 
market because of "mixed signals" from the State Department. 
"There's a lot of confusion coming from the State Department," he 
contended, "on how we can do business in Southern Sudan.  There 
remain too many uncertainties.  As a result, our legal departments 
are telling us to go slowly.  My own counsel instructs me to 'make 
sure you know whom you're doing business with' before making any 
moves into Southern Sudan." 
 
------------------------- 
. . .But Need for Clarity 
------------------------- 
 
¶4.  (SBU) Smith emphasized that there is a "need for clarity" with 
respect to U.S. policy.  Once American corporations like General 
Motors and Coca-Cola know the ground rules, Smith predicted they 
will swiftly enter the Southern Sudan market.  With the current 
sanctions policy, Americans are locked out.  As a result, Smith 
said, the Southern Sudanese market is dominated by the Chinese, 
French, and Arabs.  Significant market share is being unnecessarily 
lost, in his estimation. 
 
¶5.  (SBU) ACCK President Dr. Nelson Githinji, who is head of 
corporate and governmental relations for Coca-Cola East and Central 
Africa, repeated much the same comments that there is a need for the 
 
NAIROBI 00001049  002 OF 003 
 
 
U.S. to "spell things out clearly."  Until then, Coke will continue 
to refrain from entering Sudan as a whole even though the company 
"absolutely sees Southern Sudan as a potential major market." 
Similar views were expressed by Pfizer East and Central Africa 
General Manager Mahmoud A. Mohamed and Sara Lee Kenya Managing 
Director Eric Odipo.  The Sara Lee executive said the company would 
enter Southern Sudan despite its lack of infrastructure and the 
absence of any supermarket or grocery store chain.  To do business 
there, he conceded, would require partnering with reliable traders 
and kiosk operators.  These handicaps aside, Sara Lee believes its 
product line-up of shoe polishes, fragrances, cosmetics, and 
skin-toning creams would attract Sudanese consumers. 
 
¶6.  (SBU) GE Africa Region President Yibrah Tesfazghi contended an 
overhaul of U.S. sanctions policy on Sudan, and not just Southern 
Sudan, is long overdue.  The policy has not convinced Khartoum to 
ameliorate its hard-line policies, much less resulted in regime 
change.  All the policy has accomplished, in his view, is keeping 
American firms like GE from doing business in Southern Sudan.  "I've 
been working on this issue since 2005," Tesfazghi remarked with 
obvious exasperation.  "There are 'wide-open spaces' for us and 
other American companies to enter, provided the policy is amended 
and we get cleared access.  It would be great news to GE if the 
sanctions policy is loosened." 
 
¶7.  (SBU) Asked about GE prospects in Southern Sudan, Tesfazghi said 
there are opportunities in energy and water projects, road and 
railway construction, and "security products."  He spoken excitedly 
about GE's vision of a railway system connecting Kenya, Uganda, and 
Southern Sudan.  He claimed these ventures have been stymied by USG 
policy.  (Note: Tesfazghi is openly bullish about GE's prospects in 
Africa.  He confided that GE Africa profits rose 68% in 2007 and an 
amazing 114% in 1Q 2008.  End Note.) 
 
¶8.  (SBU) ACCK Administrator Brenda Gitonga acknowledged April 16 
that her members remain interested in Southern Sudan.  Aside from 
Sara Lee East Africa and Eveready East Africa, she reported that 
Colgate-Palmolive East Africa, Eaton Corporation, and Afsat 
Communications are eager to do business in Southern Sudan. 
 
¶9.  (SBU) When informed that the State Department is contemplating 
sponsoring a trade mission to Southern Sudan, former ACCK President 
Carisa Graf Suleman said April 17 she has no doubt that the American 
business community in Kenya would participate, provided corporate 
headquarters in the United States gives its approval.  "We are 
definitely interested in going into Southern Sudan.  Particularly 
those companies selling consumer goods - Procter and Gamble, 
Colgate-Palmolive, Sara Lee - will want to be involved."  She 
suggested that Coca-Cola and General Motors would probably be more 
reticent, explaining that their shareholders have moral qualms about 
doing business anywhere in Sudan before the conflict over Darfur is 
resolved.  (Note: Earlier in the year, Graf told FCS Counselor that 
most ACCK members would likely follow GM's and Coca-Cola's lead: 
proceeding cautiously until their corporate headquarters give them 
the go ahead.) 
 
------------------------ 
Awaiting USG Green Light 
------------------------ 
 
¶10.  (SBU) Graf Suleman, whose husband owns Afsat Communications, 
remarked that the American business community is still waiting for 
the USG to announce that Southern Sudan is open to American 
businesses.  "We especially need guidance on whether we can operate 
 
NAIROBI 00001049  003 OF 003 
 
 
in the 'marginal areas' around Khartoum," she said.  She called for 
our sanctions and development policies to align better with American 
business interests, saying it made little sense to have USAID and 
other government agencies pump money into Southern Sudan for 
development projects only to see Sudanese take their earnings to buy 
Chinese and French consumer goods.  If USAID can spend U.S. taxpayer 
dollars in Southern Sudan, surely American private entrepreneurs 
should be allowed to expose their product lines to Sudanese 
consumers, she contended. 
 
¶11.  (SBU) During a March 13 ACCK board meeting with the Ambassador, 
FCS Counselor Jim Sullivan asked whether attendees would likely join 
a USG-organized trade delegation to Southern Sudan.  Reservations 
were expressed by General Motors East Africa Managing Director Bill 
Lay and Coca-Cola's Nelson Githinji.  Both said they doubted their 
corporate headquarters would approve such an endeavor until all 
questions about the Sudan sanctions policy were answered.  They also 
mentioned concerns about public perceptions, especially those held 
by their shareholders, of doing business in Sudan, given the ongoing 
violence in Darfur. 
 
RANNEBERGER