South Sudan asks President Ruto to end Johos port monopoly

The government of South Sudan has asked President William Ruto to end the monopoly of a company linked to the family of former Mombasa governor Ali Hassan Joho in handling goods destined for the neighboring country from the port of Mombasa via the rail line.

In a U-turn, South Sudanese President Salva Kiir now wants Dr. Ruto to allow goods to be cleared to and from his country at the port of Mombasa and not at the Nairobi Freight Terminal (NFT).

Juba wants to allow more companies, including Compact, Consolidated, MCT and MCT and Mitchell Coates, to handle their goods in Kenya as it seeks to stop the monopoly.

Autoport Freight Terminals Limited, which is related to the Joho family, processes almost all South Sudanese imports in NFT.

“The purpose of this letter is to bring to Your Excellency’s attention our discussions as to why we in South Sudan have chosen to use the port of Mombasa rather than the Nairobi terminal for shipment of all goods to and from South Sudan,” said Mr. Kiir. A diplomatic note by Dr. Ruto that I have seen The daily business.

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“Therefore, I am sure that your Excellency’s good offices will influence our decision regarding the Kenya Ports Authority, the Nairobi Cargo Terminal and any other concerned institutions entrusted with the transport of goods to and from the Republic of South Sudan,” Mr. Kiir added in a memorandum sent to the State House through the Ministry of Social Affairs. external.

Juba believes that the transition will ensure the smooth flow of goods and stabilize the cost of consumer products in South Sudan.

The port of Mombasa, the largest port in East Africa and the gateway to trade in the region, handles imports of fuel and consumer goods as well as exports of tea and coffee for neighboring landlocked countries such as Uganda and South Sudan.

“The clearance and shipment of goods transiting South Sudan should be allowed so that no company has a monopoly on this process,” Mr. Kiir said in the note, known in diplomatic language as the “note verbale.”

Autoport enjoyed a near monopoly on the business and was at one point a target of the government for alleged tax evasion.

The man behind the company is the older brother of the former ruler, Abu Juhu. The South Sudan deal came under the spotlight after the Supreme Court upheld Dr Ruto’s victory in the Aug. 9 presidential election against his rival, Raila Odinga.

Autoport won the South Sudan contract on the strength of its deal with Kenya Railways which offered it a stop at the Nairobi Inland Container Terminal, which is connected to the Standard Gauge Railway (SGR) and allows for easy evacuations of goods from the port of Mombasa.

Mr Joho backed veteran opposition politician Mr Odinga in the August 9 election, and the outcome of the presidential election raised fears that the new administration would be intent on revising the railway station deal.

On Monday, the South Sudanese embassy confirmed the “note verbale,” but declined to comment on the response from the presidential residence.

Foreign Affairs Minister Korir Sengwe did not respond to our requests for comment.

On September 13, after being sworn in as Kenya’s fifth president, Dr. Ruto issued an executive order directing that all cargo customs clearance and accompanying operations revert to the port of Mombasa.

This came in line with the promise he made to the coastal residents during the electoral campaign period.

But Dr. Ruto softened his stance, offering freedom to South Sudanese to decide where they wanted to drop off their goods, including the dry ports – Nairobi and Naivasha.

South Sudan had threatened to transfer business to the Djibouti route, in what would have deprived Kenya of the revenues of the 1.11 million tons of cargo handled annually by the port of Mombasa.

Mombasa used to be the main route for all shipments to the landlocked country and South Sudan, but Juba has been talked about using the port of Djibouti as an alternative.

The previous government had moved merchandise clearance to ICD in Naivasha and Nairobi as a way to raise revenue to pay off the $5.1 billion Chinese loan used in the Nairobi-Nairobi SGR float.

In 2021, Autoport has taken over the operations of a taxpayer-funded inland freight terminal in Nairobi.

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Obtained the right to use the NFT, which is strategically located near the SGR station in Syokimau.

Autoport convinced the KRC board of directors of guaranteed turnover, promising to transport 1.6 million tons annually.

The deal prompted Juba early last year to bid Autoport a contract to handle all South Sudanese NFT imports.

Various companies have been handling South Sudanese shipments, but there have been complaints of inefficiency.

This made the South Sudanese government the agents of change and exploited NFT as the sole freight processor.

The deal means that cargo transiting through the port of Mombasa destined for South Sudan will be cleared in Nairobi, thus increasing the volumes that will be carried on the SGR vessel.

South Sudan is second only to Uganda in terms of using the port of Mombasa, accounting for 12 percent of imports to neighboring countries.

Uganda accounts for the lion’s share at 71.7 percent or 6.64 million tons of the 9.25 million tons of imports.

Dr Ruto said last year that Kenya would provide land to South Sudan in Mombasa to build a dry port to ease the cost of doing business between the citizens of the two countries.

In September, South Sudan said it had acquired three acres of land in Djibouti to build a dry port as it seeks to reduce reliance on the port of Mombasa.

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