Financial firms halt South Sudan operations
The biggest banks and insurers in Africa are temporarily closing operations in South Sudan after violence between rival political factions in Juba.
|||Johannesburg - The biggest banks and insurers in Africa, including Old Mutual and Standard Bank Group, are temporarily closing operations and evacuating staff after violence between rival political factions left 272 people dead in South Sudan’s capital, Juba.
Read also: Growing fears of civil war in South Sudan
The fighting disrupted operations of Standard’s CfC Stanbic Bank and action had to be taken to protect employees, the lender said in an e-mail yesterday. The branch would reopen “once the situation improves”, it said.
Clashes erupted in South Sudan on July 7 between forces loyal to President Salva Kiir and supporters of former vice-president Riek Machar and continued sporadically until Monday. The country, which marked its fifth anniversary of independence from Sudan last Saturday, has had a transitional government since April, when Kiir and Machar agreed to work together to end a civil war that began in December 2013. By Monday the US government had ordered the evacuation of all non-essential personnel.
Old Mutual, which has a presence in South Sudan through its controlling stake in UAP Holdings, had closed operations, a spokesman for Africa’s biggest insurer said.
The London-based company was also planning to evacuate expatriate staff and local employees and their families, he said.
Emergency talks
South Sudan’s leaders are in emergency talks to try calm the situation, according to an ambassador for the oil-producing African nation.
Kiir and Machar ordered their forces to maintain a ceasefire yesterday and the main international airport, which shut during the fighting, would reopen, South Sudanese Ambassador to Kenya Chol Ajongo told reporters in Nairobi, the Kenyan capital.
KCB Group, the owner of Kenya’s largest bank by assets, had also been forced to cut back on branch operations in South Sudan, the Nairobi-based lender said.
KCB, which operated in all of South Sudan’s 10 states and was the first regional lender to open up in 2005, had moved all staff to safety, the bank said.
Equity Group Holdings, Kenya’s biggest bank by market value, declined to comment.
MTN Group, the continent’s largest cellphone company, would continue to monitor the situation, Chris Maroleng, a spokesman for the company, said in response to questions.
“MTN has implemented its business continuity plans to ensure the safety of our employees and provision of essential services,” he said, without giving details.
The violence that broke out in December 2013 has killed tens of thousands of people, forced more than 2 million more to flee their homes and cut oil production in the country, which has sub-Saharan Africa’s third-biggest crude reserves.
Before the war, financial services companies such as Standard Bank, searching for income across the continent to boost profit that was waning in more developed countries, saw opportunities in the country and its almost untapped banking market.
The hostilities put paid to any chance of a boom and South Sudan’s currency collapsed amid surging inflation, with the International Monetary Fund projecting that the country’s economy would contract by 7.8 percent this year.
BLOOMBERG