AFEX pulls out of Rumbek over tax and other issues


(Posted 14th October 2013)

Yet another Kenyan company has fallen foul of the murky legal, regulatory and taxation regimes in South Sudan, after that country, by refusing to allow ticket sales proceeds to be repatriated, forced Jetlink late last year into first suspending operations and then closing down altogether.

African Expeditions, a company headquartered in Nairobi and specialized to providing tented and pre-fabricated accommodation in remote places, has announced that the tax demands made of them no longer permitted to run a viable business, considering the ever lower occupancies which are a result – by the definition of some individuals met last weekend during a trip to Juba – of the prevailing security situation and the perception by business and adventure travelers about their personal safety when visiting Africa’s youngest nation.

AFEX commenced operations in South Sudan the moment the CPA, in short for Comprehensive Peace Agreement was signed between the then Garang led South Sudan and the regime in Khartoum.

At one stage AFEX was running over 60 such camps across South Sudan, often the only place where travelers, NGO personnel and even government officials could stay.

However, as time went by and reportedly more so since independence in July 2011, more and more foreign owned businesses have reported strong arm tactics by individuals, often ranking army officers up to the ranks of generals, attempting to get a piece of the cake and muscling in when not instantly accommodated in their demands.

I have told you time and again, South Sudan has to undergo significant reforms. Their legal system, their land tenure and land ownership have to be harmonized with the rest of the EAC if they want to join. Investors need secure tenure for land leases or want to buy outright. Their regulations should not just comprise copy and paste jobs by dubious consultants who have to share their proceeds with greedy individuals giving them such jobs but have to be relevant AND understood so that implementation is possible.

Investment incentives start for us in Kenya with being able to remit management fees, profits and repayments of loans taken to set up such business ventures. If we cannot get money for that purpose we all end up like Jetlink, which is broke. The often reported culture of the guns must fundamentally be replaced by a well trained police force. Being open for investments as they keep saying requires a lot more than just flying into Juba with a briefcase of project proposals and a bank draft. And talking of Juba. I hope you experienced the arrival and departure chaos we who live there go through every time we travel. First it smells like you step into a urinal and then there is no functioning aircondition. Officials make it a habit to find faults with your Visa or passport or anything if they try to get some chai from you. I laughed when you wrote about how your delegation was subjected to the same ridiculous comedy and they tried to make you pay for Visa when you were to enter free. It is worse for individual travellers. Departure security is frankly a joke too and this is a powder keg really for something to happen. I have sympathy with AFEX and in fact would not be surprised if the people forcing them to leave will not within days have another camp up and running. There truly are too many opportunities in South Sudan but the entire way of doing business, from arrival at the airport to departure, must be retooled and reinvented or else little will change’ commented a regular source who lives in Juba but was away when I visited last weekend.

Harsh words but mirrored often enough through reports from Juba and beyond to make them absolutely believable, and in the case of AFEX it is a matter of fact now anyway. Tourism to the South Sudanese parks like Boma could be a gold mine, if tourism were properly facilitated, arriving guests could just get on their domestic charter to the destination and then enjoy days out in a nearly untouched wilderness. What is lacking though are camps and lodges, ground transport accessibility as the roads to such remote locations during the rainy season are literally impassable and security, preventing incidents like earlier in the year when the entire Boma National Park installations were overrun by militias, ransacked and burned down.

Will lessons be learned one wonders as such situations like with Jetlink or now AFEX make the rounds and get into the regional and international media? Time will tell so keep watching this space.

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