VZCZCXRO5326
OO RUEHROV
DE RUEHKH #1128/01 2101030
ZNR UUUUU ZZH
O 281030Z JUL 08 ZDK
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1440
INFO RUCNIAD/IGAD COLLECTIVE
RHMFISS/CJTF HOA

UNCLAS SECTION 01 OF 02 KHARTOUM 001128 
 
DEPT FOR AF/SPG, A/S FRAZER, SE WILLIAMSON 
DEPT FOR EB 
DEPT PLEASE PASS TO COMMERCE 
DEPT PLS PASS USAID FOR AFR/SUDAN 
ADDIS ABABA FOR USAU 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ASEC ETRD PGOV PREL KPKO SOCI AU UNSC SU
SUBJECT: PLANNING FOR A U.S. TRADE DELEGATION TO SOUTHERN SUDAN 
 
1.(U)This cable offers background and planning information for the 
forthcoming U.S. trade delegation to Southern Sudan.  Please note 
the action request contained in paragraph 7. 
 
¶2. (SBU) The Government of Southern Sudan remains enthusiastic about 
the proposed U.S. Department of State/U.S. Department of Commerce 
jointly sponsored visit by U.S. businesses to Sudan's South.  GOSS 
Minister for Trade, Commerce, and Supply Anthony Makana views it as 
a much-needed effort to broaden awareness within the American 
business community of the existing "carve-out" for Southern Sudan 
contained in the Darfur Peace and Accountability Act. Despite recent 
ICC activity against Sudanese President Omar al Bashir, the GOSS 
remains positive about the timeliness of a 
mid-September/early-October visit to Southern Sudan by interested 
U.S. entrepreneurs and investors.  Such a visit comes on the heels 
of GOSS-hosted trade delegations from China, Turkey, the 
Netherlands, France, the United Kingdom, South Africa, Kenya, 
Uganda, Eritrea, Ethiopia, and Egypt, as well as a planned 
forthcoming visit by a delegation from the United Arab Emirates.  A 
visit by an American delegation within the timeframe outlined above 
would also fall around the second anniversary of Juba's inaugural 
"International Trade Fair."  Makana would welcome participation by 
any of the delegates in this year's event should they be so 
inclined. 
 
¶3. (SBU) The Government of Southern Sudan continues to encourage 
investors focused on the following sectors: natural resource 
exploration/extraction, finances/banking, transportation, and 
agriculture.  While the GOSS is cognizant of bars against American 
petroleum companies operating in Sudan, Makana emphasized that 
exploration and extraction possibilities exist in the South's 
copper, uranium, and gold belts (some situated along the 
Ethiopian/Sudanese border), in addition to what he termed a 
"potentially lucrative timber industry," as well as untapped sources 
of gum Arabic.  Despite the absence of a South-specific banking law 
(one remains under draft within the GOSS Ministry of Legal Affairs 
and Constitutional Development, following significant delays within 
the Ministry of Finance) Sudanese national banking laws remain in 
effect for the South, and allow for protections against 
nationalization and other commercial risks.  Currently, Kenya 
Commercial Bank remains the sole bank operating in Sudan's South (an 
area larger than France) with a U.S.-based correspondent bank.  Only 
nine of the South's ten states have commercial banks presently in 
operation - and bank branches outside of the state capital exist in 
only six of those states.  Makana notes that the transportation 
sector - despite the region's challenges - will continue to be a 
growth market given the South's dependence on imported food and 
non-food commodities, pharmaceutical supplies, and construction 
materials. 
 
¶4. (SBU) The South's Greater Equatoria region functioned as much of 
East Africa's bread-basket prior to the North/South civil war.  The 
local governments of Eastern Equatoria and Western Equatoria states 
are open to large-tract farming, and state assemblies are currently 
exploring the possibility of tax-free economic zones in each state. 
Torit, capital of Eastern Equatoria, will have its airport upgraded 
during the 2008/2009 dry season to become a regional transportation 
hub akin to Rumbek International Airport, which handled much of the 
Operation Lifeline Sudan traffic during the late nineties. The World 
Bank, European Commission, and U.S. Government are currently funding 
road improvement projects in Eastern, Western, and Central Equatoria 
states which will significantly enhance the capabilities of 
commercial traffic to transit through the region. 
 
¶5. (SBU) GOSS President Salva Kiir Mayardit expedited via 
presidential order the South's first investment law in early 2008. 
Makana is due to discuss the bill before the Southern Sudan 
Legislative Assembly in August 2008 and he expects it to pass during 
the present legislative session with few changes beyond the 
cosmetic.  The current draft bill holds that foreign and local 
investors are to be treated equally under the law, with full rights 
afforded to foreign-held companies for the repatriation of the 
totality of their profits. Corporations may be established in the 
South under three different scenarios: solo ventures, joint 
ventures, or those incorporated with a Southerner given full 
partnership status.  While taxes will be leveled against all 
companies, no matter their makeup, an Investment Authorities 
Commission, helmed by the Trade Minister, will be tasked with 
exempting companies either deemed to be operating in "strategic 
sectors" or those that employ a set quota of Southern Sudanese 
national staff. Post will forward the draft Investment Act to 
AF/SPG. 
 
¶6. (SBU) U.S. Consulate General Juba envisions supporting a U.S. 
commercial delegation for twelve days beginning with participants' 
 
KHARTOUM 00001128  002 OF 002 
 
 
arrival into Juba on Monday, September 22 and departing on Friday, 
October 3, 2008.  ConGen Juba would arrange for meetings between the 
traveling party and GOSS officials, the Southern Sudanese business 
community, and other relevant counterparts on Tuesday, September 23. 
 The delegation would then travel to Torit, in Eastern Equatoria, on 
September 24 where they would overnight before onward travel to 
Kapoeta.  A day visit to Kapoeta would be capped by an overnight in 
Rumbek, the capital of Lakes State, before the group splits on 
September 26, with one contingent traveling to the Northern Bahr el 
Ghazal state capital of Aweil and the second group traveling to 
Western Equatoria's state capital of Yambio.  The groups would 
reunite in Juba on September 27 before spending two days in Wau, 
capital of Western Bahr el Ghazal.  A final two days of meetings 
would be arranged in Juba to entertain follow-on discussions with 
host government officials before the party departed Juba on October 
3 via direct flights to either Addis Ababa, Nairobi, or Kampala. 
Post requests AF/SPG give consideration to the assignment of one 
short-term TDYer to Juba in order to assist with preparations in 
advance of the delegation's arrival and logistical elements in areas 
outside of Juba once the delegation commences travel. 
 
¶7. (SBU) Makana noted the GOSS Liaison Office's fledgling efforts to 
establish a "South Sudan-U.S. Business Council" with counterpart 
offices in Washington, DC and Juba, Sudan.  Post welcomes such an 
initiative, and believes that it will partner well with active 
American Chambers of Commerces elsewhere in East Africa.  During 
then-Presidential Special Envoy Natsios' September 2007 visit to 
Eastern Equatoria State, the Governor offered a free gift of 10,000 
square meters of land available to USAID.  If the business 
delegation is sufficiently attracted to investment prospects in 
Southern Sudan, and given GOSS efforts to establish a South 
Sudan/U.S. Business Council, and given USG interests in ensuring the 
South's economic growth as one element of the policy of making unity 
attractive in Sudan, then USAID would be willing to explore with the 
U.S. Department of Commerce and other relevant actors the 
possibility of developing this land as a USG-sponsored business 
development center in Sudan's South.  Torit, the capital of Eastern 
Equatoria, is uniquely situated along the South's growing commercial 
transit corridor and is home to a dynamic, pro-business state 
governor.  A gateway into what used to be the South's bread-basket, 
Torit is 2.5 hours drive from Juba, and will soon boast an airport 
suited to international commercial air traffic within the region.  A 
facility at such a location could generate local economic growth 
while serving as a platform from which interested American 
businesses could operate during their initial forays in the South's 
commercial sector. 
 
¶8. (SBU) Field-based points of contact for this initiative are as 
follows: Embassy Khartoum Economic Chief John W. Struble 
(StrubleJW@state.gov) and Consulate General Juba Political Officer 
Erin Y. Tariot (ETariot@usaid.gov). 
 
FERNANDEZ