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Title: MCT

Private Sector Development
  • Presentation to the
  • Sudan Donor Consortium
  • Oslo, Norway
  • May 5-7, 2008

Introductory Notes
  • We are grateful for pledges made by donors for
  • The MDTF project declared effective in May, 2007
    and the commitment made was USD 6.78 million for
    Phase 1, out of total Phase 1 costs of USD 11.1
  • The PSD work reported here is supported by both
    MDTF, other donors and GOSS
  • We appreciate working with development partners
  • WB Group.
  • USAID and others which have thankfully
    transferred to us some best practices
  • We renew our commitment to the project and
    development of private sector and trade in

Today we present
  • Background for Private Sector Development
  • The PSD project
  • Achievements to date
  • Challenges going forward
  • Proposals for future plans

Key Messages from this Presentation
1. Background for PSD
  • Southern Sudan has begun to attract investors
  • We have begun the journey to strengthen our legal
    policy framework for investment
  • We have begun to strengthen our institutions
    markets to stimulate support investment
  • We have started to harvest the value of dialogue
    with the private sector
  • We are on the way to building a financial

Key background facts
1. Background for PSD
  • Great Opportunities in South Sudan
  • Strategic location, water, fertile land, natural
    resources and Diaspora
  • But No History of Private Sector Before
  • Northern Sudanese traders have been replaced by
    traders from other countries, still no real
    Southern Sudanese private sector
  • Huge Investments Needs,
  • But High Risks
  • Insufficient legal and regulatory framework to
    attract investors (laws, private property rights)
  • Low level of skills weak economic institutions
    (e.g. Markets)
  • Capital base destroyed by conflict
  • High real/perceived political risk
  • Few public institutions to support markets and a
    vibrant private sector
  • High incidence of poverty in periphery
  • Dutch disease Impact of oil revenues on trade,
    competitiveness, labor markets, and exchange rate

Private Sector Development Can Resolve Some of
the Post Conflict Constraints
1. Background for PSD
  • Maintaining political support for peace
  • The peace dividend is a job at a living wage
  • Collier half of countries that emerge from war
    revert to conflict in first decade
  • Reducing economic dependence on public sector /
    civil society as the main source of employment
  • Maximizing the role of the private sector as a
    partner in reconstruction
  • Addressing the root causes of conflict
  • Economic exclusion
  • Narrow development patterns
  • Avoiding Dutch disease
  • Reducing reliance on resource rents as the main
    source of public revenues

2. The MDTF PSD Project for Southern Sudan
The PSD MDTF Project has 4 Components
2. The PSD Project
  1. Establish an enabling policy, legal and
    regulatory environment for trade and investment
  2. Access to finance for medium, small
    micro-businesses (especially microfinance)
  3. Industrial Capacity Building
  4. Market Development (through public private

Implementation by Different GoSS Agencies
2. The PSD Project
  • Ministry of Commerce is the Coordinating Agency
  • Policy, legal Regulatory Environment (with
  • Public-Private Dialogue (with Chamber of
  • Business Plan Competition (with Ministry of
  • Bank of Southern Sudan (BOSS)
  • Microfinance
  • Ministry of Industry Mining (with UNIDO)
  • Industrial Capacity building
  • Central Equatoria State (CES)
  • Market Development

Establishing an Enabling Policy Regulatory
Environment for the Private Sector
2. The PSD Project
  • Rapid establishment of a foundational regulatory
  • Re-establishment streamlining procedures for
    business registration
  • Development of an entrepreneurship policy
  • Establishment of a Public-Private Dialogue Forum
  • Building the Institutional Framework for an
    active and effective PPD Forum - Developing PPD
    Working Groups, Formulating evidence based reform
    agenda, Developing regular reform monitoring
  • Monitoring Evaluation

Increasing Access to Microfinance
2. The PSD Project
  • Establishing a Microfinance Apex Institution and
    a Board
  • Establishing a policy framework for microfinance
  • commercial microfinance differentiated from
    social safety nets or charity
  • Strengthening the regulatory framework for
    microfinance Recruitment of a Senior Policy
  • Providing liquidity to MFI's - for direct
    lending to entrepreneurs
  • Technical Assistance to MFI's
  • Financing new MFI's providing TA to Banks
    entering MF
  • Fueling innovation - to meet market demand for
    financial solutions
  • Outreach Social Mobilization - all 10 states
    disempowered groups

Industrial Capacity Building Component
2. The PSD Project
  • A Policy Framework to support industrial
    strategy, policy formulation and Capacity
  • Partnership with UNIDO on three sub-components
  • Develop Industrial Strategy and Policy Capacity
  • Develop Private Sector Support Institutions
  • Enhance Business Development Services in Southern
  • Additional sub-components
  • Analysis of Industrial Competitiveness
  • Mining Sector Capacity Building

Market Development
2. The PSD Project
  • Establishing a Wholesale Market
  • Building a physical marketplace gtgt with cold
    storage market stalls making trade efficient
    reducing capital costs for new entrepreneurs
  • Strengthening regulatory administrative
  • Demonstrating an effective public-private
    partnership for infrastructure
  • Increasing food security improving nutrition
  • Establishing satellite assembly markets
  • Enhancing rural-urban linkages promoting
    commercializing agricultural production raising
    rural incomes
  • Developing market information systems
  • Increasing the flow of products through the
    marketing system through better information

3. Achievements to Date
The Project Coordination Unit has been
Established Staffing Ongoing
3. Achievements to Date
  • Procurement of office equipment progressing
    nearly complete
  • Staffing ongoing nearly complete
  • Delays at contracting stage due to MOLACD blocks

A Foundational Enabling Legal Regulatory
Framework is Being Established
3. Achievements to Date
  • With the assistance of the WBG (FIAS-ICTA), GoSS
    has reviewed revised ten mercantile laws
  • Company, Investment, Partnerships, Limited
    Partnerships, Registration of Business Names,
    Registration of Documents, Insolvency, Contracts,
    Agency and Sale of Goods Law
  • 3 of these have been enacted into law through
    Provisional Orders
  • Partnerships, Limited Partnerships and
    Registration of Business Names Law
  • In addition, the Investment Law has been approved
    for signature by the President following which it
    will become law
  • The remaining six are likely to become law before
    the end of June 08 subject to the House of
    Assembly timetable

A Foundational Enabling Legal Regulatory
Framework is Being Established (cont.)
3. Achievements to Date
  • The Company Registry has been re-started 1600
    businesses registered since May 2007
  • 65 in construction, 25 in services
  • The Public-private dialogue Forum has been
  • An assessment completed
  • A structure agreed with stakeholders
  • 2 Working groups are in formation
  • Sensitization ongoing

A Foundational Enabling Legal Regulatory
Framework is Being Established (cont.)
3. Achievements to Date
  • Progress has been made in strengthening the
    policy framework
  • Policy advisor has been identified
  • Monitoring evaluation framework for private
    sector initiated.
  • The institutional framework for investment
    facilitation is being strengthened
  • MCTS institutional assessment completed
    reorganization ongoing
  • Capacity needs assessment launched staff trained
  • Coordination among PSD ministries strengthened
  • The Southern Sudan Investment Promotion Authority
    was established by Presidential Decree in June
    2007. A Board has been appointed, and a Secretary
    General in place

Microfinance will soon be available to small
  • South Sudan Microfinance Development Facility
    (SSMDF) and the microfinance policy advisor in
    process of recruitment.
  • First pilot round of Micro-finance Competition
    completed and awards totalling 1 million made to
    four MFIs
  • Internationally renowned microfinance NGO BRAC
  • Two established Sudanese MFI's
  • A Local Cooperative providing innovative rural
    finance solutions
  • Finalising Disbursement and reporting procedures
    for the microfinance component of the PSD project

The Industrial Capacity Building Business Plan
have Been Launched
3. Achievements to Date
  • Industrial Capacity Building
  • A Memorandum of Agreement has been signed with
    UNIDO to build capacity at Ministry, Association
    and firm level.
  • Technical Staff under the UNIDO sub-components in
    process of being hired
  • TORs for the remaining two sub-components have
    been prepared
  • Business Plan Competition
  • Approx 1000 application received
  • 60 applicants will be selected for training in
    Business Plan Preparation. After training,
    these 60 people will resubmit a proposal and the
    20 best proposals will be chosen
  • These 20 winners will receive a financial grant
    of 20,000 USD, to be deposited at a bank as
    collateral for a loan so that the winner can
    implement his or her business idea.

The Wholesale Market Component has Been Launched
3. Achievements to Date
  • Land title has been secured with the help of the
    State of Central Equatoria
  • PPP Wholesale Market Study Tour
  • Familiarization visit by the project team to
    similar markets in South Africa
  • Purpose To educate the implementation team on
    design, PPP, legal, other technical aspects.
  • Market concept at design stage
  • with the contracted architect

4. Challenges Going Forward
Despite this Good Progress, Challenges Remain
4. Challenges Going Forward
  • The policy, legal regulatory environment still
    weak uncertain
  • Administrative procedures are still extremely
  • Trade policy, including relevant institutions,
    still lacking
  • Economic activities are limited to big cities
  • Capacity in the business sector is still limited
  • Access to finance still problematic, particularly
    for MSEs

5. Proposals for Future Plans
Continue implementation and expanding existing
  • Trade Policy continue developing trade policies
    and regulations and oversight mechanism
  • Improving Access to Finance for microfinance and
  • Institutional Development of Ministry Staff
  • PPD Support the Public-Private Dialogue Forum/
  • Further support to the SSIA to build capacity and
    develop and implement an investment promotion
  • PPP and Market Development Continue improving
    market infrastructure and private sector
  • Legal framework work with MOLACD to implement
    promulgated laws draft additional laws seek to
    formalize more SMEs

New Directions
5. Proposals for Future Partnership
  • Establish standards metrology system for
    Southern Sudan, including consumer protection
  • Improve linkages with regional international
    trade/economic related organizations deepen
    regional integration
  • Reduce investment constraints at state local
    government level
  • Establish PSD coordination mechanism for Southern

In Conclusion
5. Proposals for Future Partnership
  • Southern Sudan is open for business investors
    are coming in
  • We have made significant progress in improving
    the investment climate access to markets,
    finance BDS
  • We have made progress in building a robust legal
    regulatory framework for investment
  • But a lot still needs to be done to attract
    investors make them competitive.
  • We need your further support

  • Thank you