CHAPTER ONE:1.0 Introduction:This chapter shall cover the
background of the research, problem statement, objectives of the
research, goals, justification, limitation and delimitation and
research question respectively.1.1 Background of the
ResearchDifferent scholars from different disciplines views and
interprets investment in different ways,according to Mary Parker
Follett(september2006-18 December 2013) investment referred to the
purchase of financial product or other item of value with an
expectation of favorable future returns.Investment in economic
sense is the process by which resources are allocated away from
current consumption to the production of goods and services that
will increase future productive ability.FDI refers to investment in
foreign country through the acquisition of local company or the
establishment oversea of an operation in new (green field) site by
multinational (transitional) corporation. Direct investment implies
control and management and perhaps technical input.While according
to Peterson and Plowman (November 19 2009- November 11,2013),
investment referred to the purchase by a producer of a physical
good, such as durable equipment or inventory, in the hope of
improving future business.Investment need not always take the form
of a privately owned physical product. The most common example of
nonphysical investment is investment in human capital. When a
student chooses study over leisure, that student has invested in
his own future just as surely as the factory owner who has
purchased machines. Investment theory just as easily applies to
this decision. Pharmaceutical products that establish heightened
well-being can also be thought of as investments that reap higher
future productivity. Moreover, government also invests. A bridge or
a road is just as much as investment in tomorrows activity as
machine isMany authors, including Noble Laureate TrygveHaavelmo,
contributed to the advance of the investment literature after the
war. Dale Jorgenson published a highly influential synthesis of
this and earlier work in 1963. His Neoclassical theory of
investment has withstood the test of time because it allows policy
analysts to predict how changes in the government policy affect
investment. In addition, the theory is intuitively appealing and is
an essential tool for any economist. 1.2 Statement of the
problem,The South Sudan Investment Authority (SSIA) in partnership
with the Government of South Sudan has organized the South Sudan
Investment Conference on Wednesday 4th and Thursday 5th December
2013.The Conference objective was to showcase to regional and
international investors the business and investment opportunities
in South Sudan with the aim of crafting a clear roadmap for its
diversification program me. The conference will additionally ,
provide a platform for political leaders and decision makers of
South Sudan to interact with international investors and CEOs to
spearhead the transformation process through an open dialogue on
South Sudan challenges and opportunities.According to the welcoming
speech of the President of the Republic of South Sudan I quoted, it
has motivated me to carry out the investigation to find whether
investors are investing in the country.A low-return investment
environment: In contrast to earlier years, investors are currently
experiencing a low-return investment environment in which the
challenge is for traditional asset classes to realize attractive
returns outperforming inflation. The investment industry has
reacted to this low-return, low-trust environment in the following
ways:The route to good: The past few years have witnessed the
emergence of a new breed of philanthropist capitalists companies
who focus not only on making a profit but also giving back to the
community in corporate social investment programs. Investors are
increasingly looking not only at the bottom line of companies but
also whether they are a force for social good.Pressure on margins:
Cost and fee pressures continue to have a significant impact on the
investment industry, affecting everyone from financial advisers,
asset managers and administrative companies to management
committees. Lower fees are no longer a negotiable
factor.Alternative sources of alpha: In a low-return and low-trust
environment, asset managers need to continuously identify
alternative sources of alpha. To grow wealth for their clients,
managers have an obligation to be innovative in a world that will
in all likelihood become even more regulated in future. The US
university endowment funds tend to lead the pack in terms of
finding alternative sources of alpha and, as the table below shows,
they have been moving away from listed equity and allocating bigger
proportions of their portfolios to real assets, such as timber, and
absolute return funds (funds we know as hedge funds).1.3 GoalsTo
suggest broad solutions and recommendations to the investment
problems in South SudanTo identify the possible impact of
investment to the host country and investment companies.To promote
investment activities in the countryTo attract investors in south
Sudan.1.4 Objective of the researchThe main purpose of this
proposal shall be to establish factors hindering investment in
South Sudan with specific focuses on Bass Petroleum Company,
Central Equatoria State, Republic of South SudanTo assess the
investment challenges in south SudanTo identify benefits of the
investment in the host country and the investing companies.To
identify various factors considered before undertaking investment
in South Sudan.To design the policies and recommendations based on
the findings for the improvement and successful investment
1.5 JustificationThe study will help us toOutline the
feasibility factors to be considered by Bass Petroleum Company in
their effort to adopt a investmentOutline the importance of
investment in south Sudan. This will enable the companies, which
have not yet incorporated investment.To identify and address some
possible challenges associated with the investment in south
Sudan.Generate more interest for further work by researchers.1.6
Research Hypothesis.In order to address the research problem above,
the following questions would be administered.Why areinvestors
reluctant to invest in the Republic of South Sudan?What are the
strategies to be put in place in order to attract investors?What
are the major benefits of investment for host country and investing
company?What are the factors to be considered by companies before
investment in South Sudan?1.7 Limitations of the study Financial
constraints in issuing the questionnaires and making follow up, is
identified to be the first limitation in this study due to high
cost of typing and printing of the analyzed data.Some respondents
anticipated to be uncooperative and shall dodge the
questionnaires.Difficulties are anticipated in accessing the
relevant information especially the documented materials. This is
because of the sensitivity of the kind of information sought.
Delimitation of the studyThe researcher shall devote a lot of time
to counter the limitation of time factor by allowing the
respondents to fill the questionnaire at their convenient time.The
researcher shall ensure proper organization of necessary funds to
support the research up to the end.
CHAPTER TWOLiterature Review2.0 IntroductionThis chapter will
provide a critical literature on the impact of investment companies
in the Republic of South Sudan. The researcher will use different
literatures on the impact of the investment in the country written
by other scholars. The purpose of writing the literature review is
to guide the researcher to present the information in a concise and
orderly manner as far as information of the same subject is
concerned.2.1 Efficient Capital Markets and Portfolio
InvestmentSouth Sudans financial system is small and offers few
financial products. There are up to 19 banks and about 70 foreign
exchange bureaus operating in South Sudan, the largest four of
which hold approximately 70% of all assets. It is difficult for
foreign investors to get credit on the local market, due to the
lack of reliable figures or audited accounts, absence of a credit
reference bureau, and failure to document land ownership properly.
Banks are also unwilling to lend due to the lack of adequate laws
to protect lenders. Officials of one major bank said it lends only
one percent of its assets. (IMF)The governments January 2012
decision to suspend oil production has led to a hard currency
shortage. Banks continue to issue letters of credit to importers of
food, fuel, medicine, and limited construction materials, but the
government controls who receive letters of credit and the Central
Bank allocates just 1 million USD per week to each of the private
banks (and 50 thousand USD licensed forex bureaus). With
considerable deposits of local currency, banks reported there is
sufficient liquidity to enter and exit sizeable positions. South
Sudan Investment Authority SSIACompetition from State-Owned
Enterprises (SOEs)The national oil company Nile pet is the only
explicitly state-owned enterprise in South Sudan. It is the
technical and operational branch of the Ministry of Mining and
Petroleum. Nile pet took over Sudans national oil companys shares
in six exploration and petroleum sharing agreements in South Sudan
at the time of the countrys independence in 2011. The petroleum
revenue management bill, which will govern how Nile pets profits
are invested, was still under review by the National Legislative
Assembly at the end of 2012.Domestic private businesses are often
owned at least in part by government or military officials, and
many officials have partnered with foreigners incorporating a
company partially as a result of a common misconception that
businesses established in South Sudan by expatriates must be 31
percent locally owned. Companies owned in part or full by
government or military officials are anecdotally more likely to win
government contracts, regardless of the quality or price associated
with a bid.Corporate Social Responsibility (CSR)The concept of
corporate social responsibility is new in South Sudan, but the few
large international firms operating in South Sudan often offer some
basic benefits to local communities. Many foreign-owned companies
are committed to hiring and training South Sudanese employees. They
occasionally engage in projects which improve access to clean
water, education, or health facilities, often as part of a
memorandum of understanding with the local community that grants
the company access to land. The 2009 Land Act requires investment
activities carried out on land acquired from local communities to
reflect an important interest for the community or people living in
the locality, and to contribute economically and socially.Political
ViolenceSouth Sudans independence from Sudan came after many years
of civil war between forces in the south and the Sudanese
government in Khartoum, and the two countries have yet to resolve
disputes over border demarcation, disputed and claimed areas, a
demilitarized zone, Abyei, and other issues. In 2012 there were
skirmishes between Sudanese and South Sudanese forces in the
disputed border regions between the two countries, which may
continue. In April 2012 the Sudan Armed Forces (SAF) aimed aerial
bombardments at oil wells and production facilities in Unity State
on the border with Sudan. Ongoing fighting between the SAF and
forces united with the RSSs official army, the Sudan Peoples
Liberation Army (SPLA), throughout early 2012 damaged oil
infrastructure in the area.In addition, there are ongoing clashes
between the SPLA and rebel militia groups opposed to the government
in Juba in South Sudans largest state of Jonglei. There are also
sporadic clashes between ethnic groups in Jonglei, Unity, Warrap,
Upper Nile, Western Equatoria, Lakes, and Western Bahr el Ghazal
States. It is impossible at this time to predict the level of civil
disturbances that can be expected in the future, but conflict in
several parts of the country will almost certainly
continue.CorruptionSouth Sudan has laws, regulations and penalties
to combat corruption, but there is almost a complete lack of
enforcement, while considerable gaps exist in legislation. The
government has yet to pass the Public Procurement and Petroleum
Revenue Management Bills, both of which are critical legislative
pieces to curb corruption. The RSS established the Anti-Corruption
Commission, but the body lacks prosecutorial powers and sufficient
resources to adequately pursue investigations. The Ministry of
Justice is charged with prosecuting acts of corruption, but has
consistently failed to do so. Bilateral Investment
AgreementsAccording to the U.N. Conference on Trade and Development
(UNCTAD) website, South Sudan has not yet entered into any
bilateral investment treaties.OPIC and Other Investment Insurance
ProgramsAn OPIC delegation visited South Sudan in October 2012 and
publicly announced, with the RSS Minister of Commerce, Industry and
Investment, that OPIC is open for business in South Sudan. The
bilateral Investment Incentive Agreement has been reviewed by the
Minister of Commerce, Industry and Investment and he is purportedly
ready to sign.South Sudan is a member country of the Multilateral
Investment Guarantee AgencyThe official exchange rate of the local
currency, the South Sudanese Pound, is fixed at SSP 2.96/USD,
though the parallel rate is SSP 4.2/USD. While the parallel rate
has remained steady for the last six months, the deteriorating
financial crisis in the country may significantly weaken the SSP on
the black market.LaborSouth Sudan has a shortage of both skilled
and unskilled workers across most areas in the formal sector.
According to the 2008 census, 84 percent of those employed are in
non-wage work. Three out of five children joined the labor force by
age 10, largely through cattle herding or subsistence farming. The
literacy rate is 27 percent. Unskilled labor in the service and
construction sectors is often performed by immigrants from
neighboring companies.South Sudan continues to operate under the
1997 Labor Act of (the Republic of) Sudan. Under that act,
independent unions are permitted. The law is silent on the rights
to strike and bargain collectively and does not explicitly prohibit
anti-union discrimination or provide for reinstatement of workers
fired for union activities. South Sudan ratified the International
Labor Organizations seven fundamental principles and rights at work
conventions in November 2012. A new draft labor law widely seen as
in-line with international standards is expected to be passed by
the National Legislative Assembly in 2013. Government enforcement
of preexisting labor laws was little to nonexistent. Most small
South Sudanese businesses operate in the informal economy, where
labor laws and regulations are widely ignored.Foreign Trade
Zones/Free PortsThere are currently no duty-free import zones in
South Sudan.2.2 BENEFITS OF THE INVESTMENT IN HOST COUNTRYThere are
several benefits of foreign direct investment which accrue to both
the home country as well as the host country. However, it must be
noted that such benefits accrue only when appropriate regulation
and an ethical sense of doing business exists with the home
country, the host country as well as the foreign investor. Some
benefits of foreign direct investment are mentioned below.
Technological Gap:Generally, it is seen that underdeveloped
economies or developing economies have a very low level of
technology. Although there may be opportunities and resources which
can be used to have economically viable production, however,
technology may be a huge constraint to utilize such resources.
Here, foreign investors from developed countries can provide the
needed technical assistance to such countries. The gains can be
shared in the form of royalties or a share of profits from such
investments. Exploitation of Natural Resources:Many-a-times it is
seen that underdeveloped and developing countries have abundant
natural resources, but they do not possess the needed technical and
managerial expertise to exploit these resources. FDI helps such
countries get access to the needed technical expertise resulting in
higher income for the governments and local communities. Employment
Generation:FDI in a host country results in the generation of jobs
for both skilled and unskilled labor. The foreign investors open
offices and factories which require people to work. Employment
ultimately leads to better living conditions and higher standards
of living among the workers. Development of Managerial Pool:Often
it is seen that such MNCs develop managerial talent. Firstly, these
companies provide their own seasoned and developed managers to
setup and run the entity in the host country, while doing so, these
managers also seek to develop the next set of managers who will
take over the reins and these managers are appointed from the host
country mostly due to them having better knowledge of the local
market.Rhys Rodrigues,Yahoo Contributor Network Jun 6, 20102.3
factors to be considered before undertaking the investment
Understand the business model.I should have probed more deeply into
exactly who would buy the product, how much they would pay, whether
the venture would sell software or a service, if there were
competitors -- and if so, how fast they were growing. I never
really understood the venture's business model.Asking these
questions, I would have realized quickly that the founders did not
really know the answers or they might have said that what they were
doing was so new, there was no established market.Evaluate whether
the venture meets an unmet need.I now know that one of the most
common, but important, elements left out of business plans is
detailed customer research. Customer interviews are important
because customers are generally reluctant to do business with a
startup. The reason is simple: most startups fail. There is little
incentive for customers to change their habits or business
processes in order to work with a startup that might disappear
eight months later.But most entrepreneurs, like the ones whose
faulty venture I'd invested in, do not reflect this in their
business plans. They present market-size and growth statistics that
are generally based on assumptions from research analysts that they
don't understand.Know why the founders care about the
venture.Startups generally lack the capital needed to pay
above-market salaries that draw in talent. If they are going to
build great teams, they must offer potential employees an exciting
work environment that flows from the founder's passion for the
business.In my case, the CEO of this failed startup did not care
deeply about the problem his company was out to solve. As a result,
the venture flailed without direction and could not raise
additional capital after the dot-com bubble burst. Invest with your
mind, not your heart.What is clear to me now is that I invested
without thinking clearly. I was swept up in my belief in the
founders and the then high odds of success for dot-com startups.The
bigger lesson from my failed investment is that during boom
periods, it is very difficult to resist the strong emotional pull
of the general economic environment. But it is precisely during
those times that applying a disciplined approach to investing is
most important.Peter S. CohanFollow
https://twitter.com/petercohan4.4 Government policy to encourage
investment in South SudanOffer an enabling investment environment:
The quality of the policy environment is a key factor to generate
the private investment and economic growth needed to reduce poverty
and protect the environment on a sustained basis. In order to
attract and retain the necessary investment for development, a
well-functioning legal, political, social and economic environment
in which companies can operate successfully and competitively needs
to be established. Key components of such an investment framework
include among others stable economic, financial and tax systems for
investing partners; a transparent legal and regulatory structure
and sound foreign ownership regulations; protection of intellectual
property rights, free capital flows and stable rules for foreign
currency exchange, well-functioning administrative structures at
the local and national levels, and absence of excessive
bureaucratic rules and delays. Pay adequate attention to the
environmental considerations of investment: Sound environmental
policies, based on scientific assessment and life-cycle analysis,
are an important part of a stable policy framework in developing
countries. Transparency and reliability of these policies are
important to ensure that companies can factor in costs for
long-term investments and avoid high compliance costs due to rapid
and arbitrary changes. By Helena Conradie August 23, 2013Promote
policy coherence and transparency: South Sudan policies should
provide integrated solutions, with tools for the various needs and
objectives. Many tools are available in the overall tool box, and
policy coherence is important for constraints to be minimized.
Environmental management and governance should not be considered in
isolation, but they should be linked to the overall development
agenda as well as finance, planning and sector ministries. In many
developing countries, where private investment involves greater
risk, transparency as well as a legal framework and procedures
that. Safeguard investors interests need to be enhanced.
Transparency in the flow and use of funds which can support green
growth objectives is also indispensible.Address financial
requirements: The provision of sufficient financing for addressing
challenges across the world is a critical factor. Public funds
should be used in a transparent manner and as efficiently as
possible and in a way that does not violate the key principle of
technology neutrality. In addition, policymakers should pay
attention to how public funding can be targeted to effectively
leverage private financing. If targeted appropriately, relatively
small initiatives taken by governments can in some cases mobilize
significant amounts of private investments. Private financing will
of course be critical in the shift towards an economic model that
results in greener growth in developing countriesImprove the
effectiveness of market mechanisms: In the context of international
climate discussions, market-based instruments can provide
opportunities for developing countries to attract funds needed for
specific projects. The Clean Development Mechanism (CDM), for
example, has opened new financing opportunities for smallholders
while contributing to sustainability. It has, during its existence,
provided investment and financing for a large number of emission
reduction projects in developing countries, brought about local
community involvement and has led to the development of monitoring,
reporting and verification methodologies. Foster innovation and
technology cooperation for green growth: Technology holds the key
to make green growth deliver. It is therefore essential to foster
innovation and promote the widespread adoption of available green
technologies, while focusing attention on developing and deploying
new solutions that will enable a more rapid transition to greener
growth. Addressing the local level and local entrepreneurs for
innovation is particularly important in considering innovation for
developing countries. Technology cooperation requires trust,
long-term commitment and clearly demonstrated mutual benefits for
all partners. Whether as a commercial transaction or as part of an
overseas development assistance package, successful technology
cooperation should be beneficial both for the host nation, by
offering economic growth, better training and improved
environmental management, and for the investor, by offering an
attractive investment opportunity. Foster effective intellectual
property protection: An effective and efficient IPR regime provides
incentives to take risks and encourages the creation and adoption
of new technologies in all areas. A robust IPR regime is required
to maintain the balance between exclusive protection for a defined
period and disclosure of IP in accordance with internationally
established IPR policies. At the same time, the access and
diffusion of knowledge can increasingly be accelerated through a
range of new collaborative mechanisms as well as through the
emergence of global knowledge and innovation networks and markets.
By Helena Conradie August 23, 2013Support innovative approaches:
New voluntary approaches to share know-how should be duly
considered. WIPO Green, for example, is an initiative of the World
Intellectual Property Organization in collaboration with industry,
in particular the Japan Intellectual Property Association (JIPA),
which proposes improving the process for adaptation and diffusion
of technology through the development of a platform facilitating
partnerships and the market-based exchange of green technologies.
Importantly, the platform would benefit all developers and users of
green technologies, anywhere in the world, and be specifically set
up to support developing country access. The Platform would serve
as a partnership hub providing a forum where interested parties can
meet and learn about available technology opportunities, as well as
available funding for implementation and create networking
opportunitieBy Helena Conradie August 23, 2013Take a system
approach: High technological capacity in a recipient country is a
key factor in encouraging transfers. To address a specific issue,
key technologies need to be supplied together with related
technologies as well as know-how. A system approach is necessary
instead of focusing on individual technologies in isolation.
Further discussions among governments and with the private sector
and more effective cooperation, including in the area of capacity
building, are important to achieve long-lasting and substantive
progress. Support capacity building: Institutional capacity will
play a key role in identifying environmental priorities,
formulating targeted policy response and driving the transition.
Government policies to increase technological and institutional
capacity are critical. Capacity building needs to go beyond the
traditional focus on environment ministries, but include finance,
planning and sector ministries as well as the private sector and
foster collaboration across agencies. Sound domestic Economic and
investment policies can help the development of local markets,
while education and health policies can contribute to a strong and
skilled workforce. Promote a whole economy approach: Given that all
sectors have a role in greening the economy and form part of wider
supply chains, a Green Growth Strategy requires a whole economy
approach in the broader context of sustainable development.
Business underlines that a life cycle approach can help identify
innovative solutions. The focus of capacity building needs to go
beyond environmental protection, but needs to also include finance,
infrastructure, the private sector and local communities.Support
involvement of OECD based companies in development: Support
mechanisms are generally related to aid programs rather than trade
and innovation programs in OECD countries. The OECD can play an
important role in developing and disseminating good practice in
adapting OECD countries science, technology and innovation policy
to build better linkages with developing countries needs and
opportunities. Foster partnerships: Partnerships with the private
sector and between developed and developing countries are becoming
increasingly important as they can make a real impact and can have
a transformative role beyond the scope of pure financing. It is
essential to have a common aim, a clear vision of change and work
more closely to achieve joint goals. At a practical level, this is
about investing in networking, but it is also about leadership.
Cooperation and integrated alliances among governments and business
are necessary. Public-private partnerships can also play an
important role in leveraging R&D and supporting innovation in
developing countries.
CHAPTER THREERESEARCH METHODOLOGY3.0 IntroductionThis chapter
shall describe how data shall be collected and analyzed .it shall
rotate around the research design that was used, study
population/area, sample size, data collection methods and
instruments, data processing and analysis tools and problems
encountered in the execution of the study by researcher.3.1 Study
DesignA case study was employed because the research was more
interested in a deeper understanding of the problem other than
generalizing the findings across the population. The in-depth
investigation in this case was aimed at identifying or questioning
an existing theory. For the purpose of obtaining the objectives of
the study, various designs were used as follows; the researcher
used qualitative and descriptive research design to conduct the
study because the findings of the study were
non-numerical(respondents opinion and view about the variables).
These methods enabled researcher to process and analyze the
findings in cross-section of the study.3.2 Study populationThe
study population constituted directors, managers and employees from
the departments of Accounts and procurement and logistics.3.3.1
Sample SizeRespondents shall be selected from the various companies
and their various departments by simple random sampling methods. In
each company and its department, the researcher shall particularly
selected the directors, managers, three (3) staff members from the
department of Accounts and two (2) from procurement and logistics.
This shall make a sample size of 125 respondents from the various
companies and their departments in the Republic of South Sudan.
Categorized in table 3.1 below.Table 3.1: Category of
respondentsCategorypopulation Sample size
Investment companies755
Directors759
General managers305
Employees from Accounting &Administration section.4015
Procurement and logistic section208
Total 24042
3.3.2 Sampling MethodThe researcher shall use purposive method
of sapling. This shall be dictated by the nature of the study that
was aimed at getting information from specific respondents. The
researcher for convenience purposes shall also use convenience
sampling just in case the selected staff is not available at the
time of the interview. Stratified random sampling shall be used to
divide the staff and directors and the managers and then the
researcher will conveniently chose the rest of the staff available
in each department.3.4 Data collection tools/methodsSince a case
study is the most strategy, most of the data shall be collected
using a structured questionnaire and interviews. These comprises of
questions on the areas of investment.3.4.1 QuestionnairesThe
researcher shall use structured questionnaires as the main data
collection method. This instrument shall be administered to
respondents to solicit for information from within the
companies.
3.4.2 InterviewsDirect interviews shall equal be used to elicit
responses from some members of staff. These will help the
researcher to get first-hand information that shall be used to draw
conclusions on the topic under study.3.4.3 Records inspectionUnder
the method the researcher shall looked at records produced at
different companies using the current system in order to establish
the effectiveness of investment.3.5 Data Management3.5.1 Data
Processing. Data collected shall be processed both manually and by
machine through word processor. This shall involve editing,
summarizing and coding of the data. The researcher shall edit and
tabulated the collected data. Each questionnaire will be ranked for
consistency, accuracy, and completeness. Editing shall be carried
out to direct any inconsistence in the collected data. The
researcher shall reduce the data into frequencies, tables and
percentages for easy analysis.3.5.2Data Analysis. Data shall be
analyzed using a computer program that is Excel package.
CHAPTER FOURDATA COLLECTON AND DATA ANALYSIS4.0 IntroductionThis
chapter shall provide the researcher with results got from study
and it will deliver the investigator with the possible solutions to
the findings.4.1The gender of the respondents.Table 2: showing
gender of the respondentsGenderFrequencyPercentage
Male2080
Female520
Total25100
Source: primary data.The table above shows that, the total
number of male operating in Bass Petroleum Company was 80% having a
frequency of 20 respondents, 20% were female.4.2 The period of
workTable 3: showing how long has the respondents worked with Bass
Petroleum CompanyYearFrequencyPercentage
Less than 2 years832
3-5 years1768
Total25100
Source: primary dataFrom the above findings, the total number of
respondents worked with Bass Petroleum Company for less than 2
years was 32% having a frequency of 8 respondents and those worked
for more than 3 years above were 68% having a frequency of 17.4.3
Respondents faced inflationTable 4 showing number of respondents
faced inflation rate Group of respondentsFrequency Percentage
Strongly agree2288
Disagree 312
Total 25100
Source: primary dataAccording to table above, it shows the exact
number of respondents which have faced high inflation rate in the
country were 88% having a frequency of 22 respondents strongly
agree, and 12% were respondents that say they have not experienced
the inflation with frequency of 3 respondents respectively.4.3
Educational LevelTable 4. Showing educational level of the
employees in Bass Petroleum CompanyEducational LevelFrequency
Percentage
Bachelor Degree312
Diploma728
Secondary Certificate 624
Primary Leaving Certificate936
Total 25100
Source: primary dataThe table shows that most of the employees
in Bass Petroleum Company are certificate holders with a frequency
of 15 which has a percentage of 60% respectively. This highly
frequency number are all sub donate stuff which do not hold any
position in the office work. Thus, diploma holders were 7 in
frequency with 28% of the office stuff.4.6 Measures taken by the
government of Republic of South Sudan.TheGovernment is committed to
improving the review process for major economic projects to
accelerate investment and job creation. Economic Action Plan 2012
proposes:4.6.1 Investing in Our Natural ResourcesThe Government is
supporting the development of South Sudans natural resource
industries. Economic Action Plan 2012 proposes: Support for junior
mineral exploration by extending the temporary 15-per-cent Mineral
Exploration Tax Credit for flow-through share investors for an
additional year. Actions to improve access to modern, reliable
seismic data for offshore resource development.4.6.2 Expanding
Trade and Opening New Markets for South SudanBusinessesThe
Government is taking action to improve South Sudaneses standard of
living by growing international trade and creating export
opportunities for South Sudan businesses. Economic Action Plan 2012
proposes: Intensifying South Sudans pursuit of new and deeper
international trade and investment relationships, including
updating the Governments Global Commerce Strategy. Implementing the
Action Plan on Perimeter Security and Economic Competitiveness and
the Action Plan on Regulatory Cooperation, which will facilitate
trade and investment flows with the United States. Providing
support to South Sudanese businesses through tariff and tax
measures, along with the extended provision of domestic financing
byExport Development. Increasing travellers exemptions to modernize
existing rulesand facilitate border processes for South Sudanese
bringing goodshome fromabroad.4.6.3 Keeping Taxes Low for
Job-CreatingBusinessesThe Government has reduced business taxes and
is committed to keeping taxes low. The Government has also taken
action to enhance the neutrality of the tax system to support
growth and encourage investment to flow to its most productive
uses. Enhancing the neutrality of the tax system and further
rationalizing inefficient fossil fuel subsidies by phasing out tax
preferences for resource industries.4.6.4 Strengthening Business
CompetitivenessThe Government is taking action to improve the
competitive position ofjob-creating South Sudanese businesses.
Reducing red tape through the One-for-One Rule and implementing the
Canada-United States Action Plan on Regulatory Cooperation.
Reducing the tax compliance burden for businesses. Eliminating
foreign investment restrictions for certain telecommunications
companies.4.6.5 Further Developing South Sudans Financial Sector
AdvantageThe Government is proposing new initiatives that will
further ensurethat our financial system remains strong and that it
benefits allSouth Sudanese. Economic Action Plan 2012 proposes:
Introducing legislative amendments to support central clearing of
standardized over-the-counter derivative transactions, and to
reinforce South Sudans financial stability framework. The
Government will introduce enhancements to the governance and
oversight framework for South Sudan Mortgage and Housing
Corporation, and is moving forward with a legislative framework
forcoveredbonds.4.6.6Improving Conditions for Business InvestmentIn
a competitive global economy, South Sudanese entrepreneurs and
businesses need a competitive and efficient tax system, a modern
regulatory system, a well-functioning financial system and access
to international markets. This solid foundation allows South Sudan
firms to create jobs and growth by exploiting opportunities at home
and abroad.The Government has a proven record of support for
entrepreneurship, investment and growth. Since 2006, theGovernment
has worked to promote investment and reduce regulatory impediments
to business growth. As well, the stimulus phase of South Sudans
Economic Action Plan provided unprecedented levels of funding to
support the renewal of economically vital public infrastructure
across the country. It is no surprise thatForbesmagazine ranked
South Sudan as the number one country in the world for doing
business in 2011, citing our strong economic recovery and
competitive tax system, among other factors.4.6.7Expanding Trade
and Opening New Markets for South Sudanese BusinessesOur countrys
prosperity is linked to reaching beyond our borders for economic
opportunities that serve to grow Canadas trade and investment. Open
trade has long been a powerful engine for Canadas economy. It is
even more so in these globally challenging economic times.Our
Government understands the importance of market openness to the
global economy and has shown continued leadership on the world
stage by opposing protectionism and trade-restrictive measures.
Canada believes open markets create jobs and economic growth for
people around theworld.4.6.8 South Sudans Leadership on
TradeDeepening South Sudans trade and investment relationships in
large and fast-growing export markets around the world is key to
jobs and growth. In less than six years, South Sudan has concluded
new free trade agreements with neighboring countries. South Sudan
businesses and workers now have preferred export access anda real
competitive edge in key markets around the world.Our Government
recognizes that restrictions on imports and investment stifle our
exporters and undermine competitiveness. Over the past three years,
the Government has removed many of Canadas self-imposed trade costs
tohelpbusinesses be more competitive. For example, since 2009, the
Government has eliminated all tariffs on imported machinery and
equipment, and manufacturing inputs to make Canada a tariff-free
zone for industrial manufacturers, the first in the G-20. These
actions are providing more than $410 million in annual tariff
relief to Canadian businesses. Such made-in-Canada measures have
helpedand will continue to helpcreate jobs for Canadians, increase
investment and innovation, and improveproductivity.4.6.9South
Sudans Trade Plan for Jobs and GrowthEconomic Action Plan 2012
proposes to intensify South Sudans pursuit of newand deeper trading
relationships. Our Government understands that South Sudans
standard of living and future prosperity depend on growing trade
and investment.To that end, the Government is continuing to
actively pursue new trade andinvestment opportunities, particularly
with large, dynamic and fast-growing economies.
CHAPTER FIVE:5.0 EXECUTIVE SUMMARY, RECOMMONDATION AND
CONCLUSION5.1 Executive Summary5.1.1 Challenges facing investment
in the Republic of South SudanEfficient Capital Markets and
Portfolio Investment, Competition from State-Owned Enterprises
(SOEs), Corporate Social Responsibility (CSR), Political Violence,
Corruption, Bilateral Investment Agreements, The exchange rate of
the local currency, Labor, Foreign Trade Zones/Free Ports, There
are currently no duty-free import zones in South Sudan.5.1.2
Benefits of the investment in host countryThere are several
benefits of foreign direct investment which accrue to both the home
country as well as the host country. However, it must be noted that
such benefits accrue only when appropriate regulation and an
ethical sense of doing business exists with the home country, the
host country as well as the foreign investor. Some benefits of
foreign direct investment are mentioned below. Technological
Gap:Generally, foreign investors from developed countries can
provide the needed technical assistance to such countries. The
gains can be shared in the form of royalties or a share of profits
from such investments. Exploitation of Natural
Resources:Many-a-times it is seen that underdeveloped and
developing countries have abundant natural resources, but they do
not possess the needed technical and managerial expertise to
exploit these resources. FDI helps such countries get access to the
needed technical expertise resulting in higher income for the
governments and local communities. Employment Generation:FDI in a
host country results in the generation of jobs for both skilled and
unskilled labor. The foreign investors open offices and factories
which require people to work. Employment ultimately leads to better
living conditions and higher standards of living among the workers.
Development of Managerial Pool:Often it is seen that such MNCs
develop managerial talent. Firstly, these companies provide their
own seasoned and developed managers to setup and run the entity in
the host country, while doing so, these managers also seek to
develop the next set of managers who will take over the reins and
these managers are appointed from the host country mostly due to
them having better knowledge of the local market.5.1.3 Factors to
be considered before undertaking the investmentAn investor who
wants to invest should the following under consideration:
Understand the business model, Evaluate whether the venture meets
an unmet need,Know why the founders care about the venture, Invest
with your mind, not your heart.5.1.4 Government policy to encourage
investmentOffer an enabling investment environment,Pay adequate
attention to the environmental considerations of investment,
Promote policy coherence and transparency, Safeguard investors
Address financial requirements, Improve the effectiveness of market
mechanisms, Foster innovation and technology cooperation for
investment growth, Foster effective intellectual property
protection, Support innovative approaches, Take a system approach,
Support capacity building,Promote a whole economy approach, Support
involvement of OECD based companies in development, Foster
partnerships: Partnerships with the private sector and between
developed and developing countries are becoming increasingly
important as they can make a real impact and can have a
transformative role beyond the scope of pure financing. It is
essential to have a common aim, a clear vision of change and work
more closely to achieve joint goals. At a practical level, this is
about investing in networking, but it is also about leadership.
Cooperation and integrated alliances among governments and business
are necessary. Public-private partnerships can also play an
important role in leveraging R&D and supporting innovation in
developing countries.
5.2.ConclusionIronically, investment from different scholars and
different disciplines, literature review and many others show that
investors face difficulties when trying to invest in the Republic
of South Sudan. Thus, South Sudan investment Authority should
develop a very good mechanism to minimize the challenges facing
investors in the country.5.3 RecommendationThe government of the
Republic of South Sudan and the investment Authority should pay
adequate attention to the environmental considerations of
investment: Sound environmental policies, based on scientific
assessment and life-cycle analysis, are an important part of a
stable policy framework in developing countries. Transparency and
reliability of these policies are important to ensure that
companies can factor in costs for long-term investments and avoid
high compliance costs due to rapid and arbitrary changes. Promote
policy coherence and transparency: South Sudan policies should
provide integrated solutions, with tools for the various needs and
objectives. Safeguard investors interests need to be enhanced.
Transparency in the flow and use of funds which can support green
growth objectives is also indispensible.Address financial
requirements: The provision of sufficient financing for addressing
challenges across the world is a critical factor. Public funds
should be used in a transparent manner and as efficiently as
possible and in a way that does not violate the key principle of
technology neutrality. In addition, policymakers should pay
attention to how public funding can be targeted to effectively
leverage private financing. If targeted appropriately, relatively
small initiatives taken by governments can in some cases mobilize
significant amounts of private investments. Private financing will
of course be critical in the shift towards an economic model that
results in greener growth in developing countriesImprove the
effectiveness of market mechanisms: In the context of international
climate discussions, market-based instruments can provide
opportunities for developing countries to attract funds needed for
specific projects. The Clean Development Mechanism (CDM), for
example, has opened new financing opportunities for smallholders
while contributing to sustainability. It has, during its existence,
provided investment and financing for a large number of emission
reduction projects in developing countries, brought about local
community involvement and has led to the development of monitoring,
reporting and verification methodologies. Support innovative
approaches: New voluntary approaches to share know-how should be
duly considered. WIPO Green, for example, is an initiative of the
World Intellectual Property Organization in collaboration with
industry, Support capacity building: Institutional capacity will
play a key role in identifying environmental priorities,
formulating targeted policy response and driving the transition.
Government policies to increase technological and institutional
capacity are critical. Capacity building needs to go beyond the
traditional focus on environment ministries, but include finance,
planning and sector ministries as well as the private sector and
foster collaboration across agencies. Foster partnerships:
Partnerships with the private sector and between developed and
developing countries are becoming increasingly important as they
can make a real impact and can have a transformative role beyond
the scope of pure financing. It is essential to have a common aim,
a clear vision of change and work more closely to achieve joint
goals.
APPENDICES:APPENDICES 1:QUESTIONNIARE FOR THE RESPONDENTS:
Dear respondent:Am Morris Girima B.Peter student of south Sudan
Christian University of science and technology. I am undertaking a
study on the challenges facing investment companies in Republic of
South Sudan for an academic purpose.You are among the respondents
selected randomly to participate in this study by answering this
questionnaire in the best possible means you can. This information
gathered will be strictly for the academic purpose and thus kept
confidentially. Please tick and where necessary make notes on the
below questionnaire.SECTION A:1 Nameposition...2-Gender (a) Male
(b) female3-Age18-25 years (b) 26-35 years (c) 36 and above 4-
Educational level.Certificate (b) Diploma (c) Degree (d) Masters
others specify5-For how long have you worked for the company?Less
than 2 years (b) 3-5 years (c) above 5 years6-Does the company ever
face some challenges.Yes (b) No 7- What kind of investments did you
invest in?(a) Petroleum products (b) building material (c)
construction (d) agriculture (e) others
SECTION: B Tick in the boxes provided, with your ultimate
thoughts on each question.Strongly AgreeAgreeNot SureStrongly
DisagreeDisagree
Does political violence in the country affects the
investment?
Is there tax exemption by the revenue authority of the Republic
of South Sudan?
Has the company ever suffered losses of theft and others?
Do you agree that in order to get high return on long term
investment you are ready to accept annual return that varies
greatly?
Would you self-off your investments if you face a loss of twenty
percent in your investments within one year?
Do you use the returns from your investments for daily
expense?
How concerned are you about losing money from your
investments?
Do you agree that you have knowledge about various risks from
investments?
How much interested would you be in taking risks to get higher
returns on investments?
What kind of investments did you invest in?
What is the most important reason for you to make
investments?
Describe your experience in the field of investments.
Do you want your assets to grow as much as possible in next few
years?
In how many years do you think you would need to make
withdrawals from your investments
Appendix iiEstimated BudgetDescriptionUnitQuantity Unit price
(ssp)Amount (ssp)
Transportation
Daily boda-boda to officeTimes15206000
Subtotal600
Stationary and printing
PenStk616
PencilStk212
Rim of Ruled paperRim13535
Rim of plane paperRim13535
PhotocopyingNo.of pages45290
printing serviceNo.of pages455225
Subtotal393
Feedings_
MealsTimes3015450
WaterBottles903270
SodaBottles30390
Subtotal810
Personal and Consultancy
Field assistant 11300300
Consultant1500500
Grant total2003 ssp
1
