The Indian construction companies rebuilding post-conflict states

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Indian businesspeople waiting for a flight in South Sudan, via Caravan

Caravan magazine recently published a fascinating article about the Indian-owned construction firms which are waiting out the war in South Sudan.  Many of them have previous experience in other African countries experiencing or emerging from conflict, including the DRC, Kenya, Somalia and Uganda.

Kuber D, an Indian who runs a restaurant on the outskirts of Juba, had earlier set up a business in Goma, in the Democratic Republic of Congo (DRC). He told me that during the Second Congo War, in 1998, he was held hostage in his home as rebel forces looted his stock. Other Indians I met last year during a visit to South Sudan narrated similar experiences. A commodity trader I met in a hotel told me how he was once assaulted while taking photographs in a market in Mogadishu, in Somalia; another businessman recounted how he had driven lorries through the rebel-held jungles in the DRC. Most of the people I spoke to seemed to find these risks exciting, and part of the challenge of making it in a new country. “We chase the money. We don’t care if we die,” one commodity trader said, “We’ll be born again anyway, right?”

Extremely low levels of development and industrialization in post-2005 Juba offered excellent opportunities for Indian businesspeople elsewhere in east Africa who were willing to relocate.

But compared to much of central and east Africa, South Sudan was magnitudes less developed and had been a battlefield for the better part of the previous century. Even with their experience, for these Indians, moving their jobs and businesses to Juba was a leap of faith.

At the time they moved there, Kuber told me, the city contained only a few brick structures. The rest was largely tukuls—thatched huts. The infrastructure that now stands—roads, markets, even government offices and courthouses—was scant. Many of the people I spoke to said there no power or water. “We were spending $100 a night to sleep in tents, but we didn’t mind,” Kuber told me.

Part of the allure of Juba was the presence of various non-governmental organisations from the United States or Northern Europe, which had large budgets and could contract businesses in the city. It was “a new market,” said Reddy, an Indian water driller who had previously worked in Tanzania. Sandal Raj, who also works in the drilling business, said he brought his business to Juba because he “saw the opportunity there was with aid groups.” “Even during the oil crash, we were fine,” he told me. “There were still good dollars coming in.”

The current conflict in South Sudan hasn’t completely displaced the Indian business community, but the longer it drags on, the more difficult it has become for many businesses to break even.

With the South Sudanese Pound losing several points to the US dollar almost daily, the situation has become untenable. Sanjay Patel, the director of Jit Mart, the largest supermarket in Juba, bemoaned the circumstances. Patel had been working with Jit Mart in Tanzania, and brought the franchise with him to Juba when he came, in 2006. “By the time it goes from the shelf to sale, I’m losing money on everything. The floating currency is worse than the war,” he said. Even so, he sent off his friends at the airport last week, electing instead to stay back.

Which African news stories are undercovered?

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Early 20th century masthead of the Central African Times, now the Daily Times, one of the longest running newspapers in Malawi

Daniel Kopf of Priceonomics put an interesting question to me recently: which stories about African economies don’t get the news coverage they should?  I thought of a number, and also Storified some great responses I got on Twitter.  What would you add to this list?

  • The Continental Free Trade Area has the potential to be the biggest trade deal that no one’s heard about.  I read African news constantly and I hadn’t heard of it before last week.  Where did this come from, and what are its prospects?
  • I’m quite interested in the expansion of both rail infrastructure and air travel.  Rail transport is much cheaper than road, particularly for the bulky commodities that get traded regionally or exported, but it seems like governments are more inclined to invest in roads, and it’s not clear why.  Light rail also has promise for urban areas but is being stymied by weak urban planning & the influx of motorcycles.  Similarly, air travel has huge potential but there’s all manner of politics around deregulation.
  • The insurance market is another place that looks like it should be taking off but has been slower than expected to do so.  For example, researchers were very excited about cheap rainfall insurance for subsistence farmers a few years ago, but takeup has been very low.  Personally I think there’s a rational distrust of institutions at play here — many people are accustomed to government officials extorting their money, or banks failing, and probably have good reasons not to hand over money now and expect a payout later.  (There’s also some interesting discussion of a move from humanitarian aid to catastrophe insurance for individuals, but presumably it would face the same challenges.)
  • The huge focus on China’s investments obscures the fact that many other middle- and low-income countries are building relationships in Africa.  Some of it is fairly benign, like India and Turkey‘s investment plans; but Israel is looking for countries to house deported African immigrants and North Korea is exporting weapons.
  • One thing that strikes me about African tech start-ups is that they’re consistently solving different problems than American start-ups do.  For example, they’re substituting for effective fire departments and national blood donation agencies in places where these institutions are weak.

The resurgence of small-scale manufacturing in Ghana

My dad recently sent me an excellent Roads and Kingdoms article by Yepoka Yeebo on Suame Magazine, an industrial park near Kumasi where 200,000 workers manufacture everything from nails to trucks.

Suame Magazine emerged around a colonial-era armory in central Kumasi in the 1930s. For a while, it was just big companies—local giants and multinationals repairing cars. They grew rapidly and were moved to the outskirts of Kumasi in the 1960s. Then in the 1970s, with Ghana’s economy faltering, and a bunch of new trade restrictions almost banning imports, the big companies collapsed, leaving hundreds of skilled workers. They became the first wave of small firms in Suame Magazine.

They slowly turned this into the best place in the region to overhaul a fleet of trucks or get heavy machinery made. People come from as far away as Burkina Faso and Nigeria to do business here, and there’s a sprinkling of foreigners from further afield wandering around: Chinese traders clutching spare parts, and Indian businessmen haggling with mechanics. There are 12,000 businesses here now.

Joyce Darko sells nuts, bolts and washers in Suame Magazine

There must be similar places elsewhere in Africa – where would one look to find them?