Published 03 May 2012 12:57, Updated 09 May 2012 07:06
Poor people want – and will pay for – luxuries. Cold beer is one of them.
Thanks to a rapidly growing brewery, cold beer is one of the few luxuries you can get in Juba, capital of the world’s newest country, South Sudan. Owner SABMiller, known in Australia as the new owner of Foster’s, put up the brewery in 2009 and nearly doubled its capacity from 180,000 hectolitres to 350,000 a year later.
In a country of 10 million people, with annual consumption of 2 litres per capita (a far cry from the Australian average of 83 litres), there is clearly room for growth.
In fact, there’s room for most things in the United Nation’s 193rd member state. With an area of 644,000 square kilometres, about three-quarters the size of NSW, it had just 100 kilometres of tarred roads when I visited in late 2010 (full disclosure: on a trip hosted by SABMiller). With the exception of beer, little is produced locally. And even in the beer market, the giant brewer’s local brand, White Bull, still only accounts for a tiny proportion of sales. Its biggest seller in South Sudan is Nile Special, a brand trucked in from neighbouring Uganda.
The country that gained independence in July last year from the Khartoum-led north, had spent about 40 years fighting – most of the time since a nominally united Sudan won independence from Britain in 1956.
But just like SABMiller, many investors are looking to the former war-torn country as a great business opportunity. For all its lack of development, the country at least has wealth. Most of the former Sudan’s oil production – about 480,000 barrels per day – comes from the south.
The timing of South Sudan’s independence came at an interesting time. Widely predicted, the secession was not welcomed by many of Sudan’s neighbours. As Terence McNamee of the Johannesburg-based Brenthurst Foundation think tank points out, some well-known names featured among the critics:
“This is ‘the beginning of the crack in Africa’s map,” predicted Africa’s then longest-serving ruler in late 2010. “What is happening in Sudan,” he warned, “could become a contagious disease that affects the whole of Africa”. History proved that Muammar Gaddafi was right to fear the consequences of a “contagious disease”, although the one that would prove fatal for him was unrelated to events in Sudan.”
(read The first Cracks in Africafor more)
Well, Gaddafi has gone and Southern Sudan is still with us. Northern Africa hasn’t disintegrated into a mess of secession bids. The Sudanese government in Khartoum was the first to recognise its new southern neighbour. It hasn’t all been plain sailing, however. Things have been getting fractious between the new neighbours. Recent weeks have seen a military flaring up in border areas between the two sides as a result of disputes over the ownership of the oil-producing Heglig region. The Brussels-based International Crisis Group says this game of “chicken” risks disastrous outcomes.
South Sudan’s move hasn’t lit a match under the already existing independence movements in other would-be states such as the Western Sahara, Somaliland or Zanzibar. They remain unresolved conflicts. However, the secession of South Sudan – possible in no small part because the Khartoum government had agreed to let it happen if the people wanted it – provides at least one role model for other conflicts.
And peace – or at least stability – offers a chance for more investment. South Sudanese don’t just want a cold beer. They want decent, affordable houses, mobile phones and entertainment, along with education, decent food and clean water. And they can pay for them. Provided the hotheads of war cool it, the demand for these things – from people who can supply them in a reliable and affordable way – is only starting.
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With South Sudan being such a new entity, official figures don’t yet recognise or measure trade between it and Australia. The most recent figures available are for a united Sudan, a country that no longer exists.
|Rank||Country||Exports per cent|
|2||United Arab Emirates||10.5|
|Rank||Country||Imports per cent|
Major Australian exports to Sudan, 2010-11 (A$m): Wheat ($147m) - Oil-seeds & oleaginous fruits, soft ($2m) - Milk, cream, whey & yoghurt ($1m) - Beef ($1m).
Major Australian imports from Sudan, 2010-11 (A$m): Iron, steel, aluminium structures ($1m)