By C. Bryson Hull

NAIROBI, July 25 (Reuters) - Kenyan President Mwai Kibaki on Wednesday named his predecessor Daniel arap Moi as special peace envoy to Sudan, to help facilitate a peace deal in the south that Kenya has a strong economic interest in seeing carried out.

Kenya's presidential press service said in a statement Kibaki had made the appointment after consulting Sudanese President Omar Hassan al-Bashir, and that Moi's focus would be on south Sudan but would involve regional diplomacy also.

Moi, despite stepping down in 2002 after a 24-year rule characterised by torture of political opponents and graft that nearly ruined east Africa's largest economy, is considered one of Africa's most adept political survivors.

Kibaki, who overwhelmingly won the 2002 elections and beat Moi's chosen successor, said Moi "had vast experience and knowledge of African affairs, and that his stature as an elder statesman made him well-suited for the role," the statement said.

Despite their political fallout over the elections, viewed by many Kenyans as a renunciation of the Moi era, the two have met several times in the past year -- particularly after Kibaki has faced serious political opposition.

Newspaper opinion pages for months have been full of speculation that the two are organising a political alliance for elections due in December.

Political analysts have said Moi wants to protect vast family business interests he gleaned during his presidency and that Kibaki wants Moi's help in fragmenting an already-divided opposition.

South Sudan, which is currently implementing a peace agreement to end its two-decade civil war with the northern government, is strategically important for Kenya, which borders the Sudanese region.

Moi was influential in steering the peace talks -- and in pressuring Sudan's northern government -- which produced the deal in Kenya, signed in Nairobi on January 9, 2005.

Kenya stands to benefit economically from a stable south Sudan, given that most trade will go through its Mombasa port and through its financial hub in the capital Nairobi.

Many workers in southern Sudan are Kenyans and major Kenyan businesses including Kenya Commercial Bank <KCBK.NR> and East African Breweries Ltd. <EABL.NR> have set up shop.

There are also moves to build a pipeline to carry south Sudan's oil out via Kenya to the Indian Ocean.

AlertNet news is provided by