Implication of admitting South Sudan to the EAC

Leaders of the EAC meeting in Arusha Tanzania

Regional politics control the investment opportunities available as well as initiating a shift in dominance. In a region that has seen Kenya dominate, the inclusion of South Sudan into the EAC fold brings about several consequences as regards investment and trade. Access to new markets and the need to reduce trade costs between countries formulate a key factor in regional policies. Policies are formulated at a regional level to either spur growth through infrastructural development or lock out some potential rivals through competition. While South Sudan will enhance its developmental aspect after joining the EAC, regional rearrangements will shape the outcome of the investment and trade opportunities. As a relatively new market, each of the East African countries will be keen to tap on South Sudan.

Being a major producer of oil, South Sudan will be a critical factor in formulation of regional policies. First, Kenya will be keen on strengthening its ties with Salva Kiir’s regime so as to tap on the vast oil production in South Sudan. Basically, South Sudan will be a major contributor to Kenya’s efforts of having an effective and competent Lapsset project. Having lost the deal to have Uganda export its oil through Kenya’s Lamu port, President Uhuru will be keen not to let South Sudan fall through his fingers. With the Lapsset project stretching to South Sudan via Ethiopia, the inclusion of South Sudan to the EAC will surely see major regional realignments. The expected partnership between the countries that share the Lapsset project will definitely bring in lots of business opportunities to the parties involved.

Prior to joining the EAC, Rwanda was faced with embarrassing situations of trade offs. As a landlocked country, Rwanda needed regional partners for its trade and business operations. The benefits of Rwanda’s inclusion to the EAC in 2007 are incomparable to what the state of the country was then. Just like Rwanda, South Sudan faces the same problems and being landlocked means that regional kingpins such as Kenya will surely take advantage of the situation and offer partnership through the Lapsset project. The transportation of South Sudan’s oil shall be a major element as regards Kenya’s policy towards its neighbors. While exporting its oil through the Southern Corridor will offer huge benefits to the economy of South Sudan, Kenya will be stamping its regional dominancy that has been shaky for the last few years going by the developments.

Regionally, countries like Tanzania and Rwanda have seen the need to have a common border point. The Rusomo one-stop border post enhances the business opportunities between Tanzania and Rwanda by facilitating immigration. In essence, such an occurrence eases travel and in the process opens up business opportunities. Besides, such a border point eases the flow of imports and exports. Ideally, the systematic approach by Tanzania is to have Rwanda use the Dar and Tanga ports for both their formal as well as informal cross-border businesses. As a landlocked country, Rwanda has no option but to partner with Tanzania given that the other option would be to loop in Kenya or to have them use the DRC route which is laden with transport hitches as well as the presence of militias in the Eastern regions. The approach by Tanzania worked wonders because the Rwandese ditched the Mombasa port and committed more of its cargo through the Dar port. Strategically, Tanzania reaps huge from the Rwandese cargo.

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