Ethiopia Eyes Tempting Business Opportunities in South Sudan (REPORT)

A sign in the central business district of Addis Abba directs people to the South Sudan office. CREDIT: M. Bociurkiw/HUMNEWSFrom a HUM Correspondent in Addis Ababa 

Even before the January 2011 referendum confirming the birth of Africa's newest nation, business people in the region were already salivating at the tantalizing opportunities to bring South Sudan into the 20th century - and the global economy.

Outside the oil sector, there is little infrastructure in Southern Sudan. There is already some foreign investment in the beverage sector and Ethiopia has two banks active there.

The sense of excitement is palpable in Addis Ababa's five-star hotels. Earlier this week, representatives from South Sudan could be seen meeting with local businessmen in the bustling Sheraton Hotel.

One European businessman in Addis Ababa said that opportunities are especially ripe in the banking and telecommunications sectors. "Basically they need everything," he said in the lobby of a hotel in Ethiopia's capital.

Ethiopia's large water and construction firms also stand to benefit. "We are ready to execute as many projects as offered," says Awash Welday, chief of Ethiopia's Awash Welday Water Works and General Contractor.

Aside from Ethiopia, Kenyan and South African firms are also eyeing developments closely. Kenya Commercial Bank is reported to have plans to double the number of branches in Southern Sudan. Kenya East African Breweries also has a presence, as does SABMiller plc of the United Kingdom.

South Sudan is due to officially become an independent state on July 9, making it the world's newest country.

The new opportunities are important for Ethiopia as its strives to become a major economy on the horn of Africa. The country of 80 million people became landlocked after its former northern region, Eritreria, declared its independence in 1993.

On the diplomatic front, Ethiopia is already deeply entrenched in South Sudan: it is sending a 4,200-strong peace-keeping force on behalf of the UN to the disputed Abyei region, which sits astride the two halves of Sudan.

A new Ethiopian Airlines Boeing 777 at Addis Ababa International Airport. The flag carrier already serves two destinations in Southern Sudan. CREDIT: M Bociurkiw/HUMNEWSGiven Ethiopia's strategic location next to Sudan - coupled with the entrepreneurial spirit of its domestic and returnee Diaspora workforce - the country stands to benefit enormously from business opportunities in South Sudan. Emblematic of its importance is the existence of a Government of South Sudan liaison office situated in the Central Business District.

Among the flagship businesses in Ethiopia aggressively moving ahead to establish a presence in South Sudan is flag carrier, Ethiopian Airlines, which already flies to the capital Juba, and as of June 17, to the Upper Nile region town of Malakal.

Ethiopia, the size of France and Spain combined, has undergone a major transformation in the last decade. It is the fifth-biggest economy in Africa - after South Africa, Nigeria, Angola and Sudan - climbing up from 10th in 2003. By 2023, its GDP purchasing power will hit about $500 billion - making it the third-largest economy in sub-Saharan Africa, according to Ernst and Young. Agriculture contributes 45 percent of the GDP and more than three years ago a modern commodities exchange was opened to revolutionize trading.