Country FilesEast & HornCountry Profile 2014: SOUTH SUDAN

Sun,21Jan2018

Posted on Friday, 07 February 2014 09:21

Country Profile 2014: SOUTH SUDAN

alt The after-pains of a violent birth

After two years of nationhood, the world’s youngest country is still experiencing domestic political instability, ethnic conflict and acute economic uncertainty. President Salva Kiir’s decision in July to dissolve his cabinet and dismiss his vice-president of eight years, Riek Machar, plunged the country into a fresh political crisis, which could undermine the latest attempts to attract much-needed private investment.

 

TABLE OF CONTENTS:

> TOP SOUTH SUDANESE COMPANIES

> TOP SOUTH SUDANESE BANKS

 

theafricareport-southsudan-72dpiThe after-pains of a violent birth

Riek Machar prepares to challenge Salva Kiir for national leadership

If agreements with Khartoum are kept, the economic future holds promise

After two years of nationhood, the world’s youngest country is still experiencing domestic political instability, ethnic conflict and acute economic uncertainty. President Salva Kiir’s decision in July to dissolve his cabinet and dismiss his vice-president of eight years, Riek Machar, plunged the country into a fresh political crisis, which could undermine the latest attempts to attract much-needed private investment.

The Sudan People’s Liberation Movement is scheduled to hold its convention inMarch2014, when Machar promises to mount a formidable challenge to Kiir for the chairmanship. Analysts predict that the schism within the ruling party signals a potentially rancorous split in 2014. Simultaneously, the latest ethnic conflict, concentrated in Pibor county, Jonglei state, has involved the local Murle, Nuer and Dinka tribes in a round of cattle raids and revenge attacks, in which the Sudan People’s Liberation Army is accused not only of taking sides but also of unlawful killings. Thousands of civilians have been displaced.

LINGERING THREATS

Abyei, the hotly contested region whose control has bedevilled lasting agreements between South Sudan and Sudan, held a referendum in October in the face of opposition from Khartoumand without the support of either Juba or the African Union. Such is the sensitivity of the issue that if Juba were to give credence to the verdict of the poll, Khartoum was threatening to force the second closure of oil production in the country’s short history.

After the secession from Sudan in July 2011, the two countries had no choice but to negotiate issues concerning the common border as well as disputed areas like Abyei. But disagreements in the African Union brokered talks in Ethiopia led to Juba halting oil flows early in 2012, accusing its neighbour of diverting and stealing the oil for its own use. Although a major oil-producing state in its own right, South Sudan’s economic security relies on crude sales through the pipelines to Port Sudan on the Red Sea. After the 15-month moratorium erased 98% of Juba’s gross national income and nearly 100% of its foreign currency earnings, the message that stability in the export of oil output is key for the economic survival of this land locked state could hardly have been clearer. Crude production eventually resumed in April 2013.

The loss of oil revenues forced the government to cut expenditure by half, roll back housing allowances for civil servants and halve the budget transfer to each of its ten states as part of an austerity programme in 2012. The central bank borrowed £SS1.6bn (about $469m) from its domestic private sector to keep the government afloat and it received a $500m loan from oil operators with stake in its oil. It also received a $100m line of credit from Qatar National Bank SAQ to finance imports of essential commodities and services.

MEETING DOMESTIC DEMANDS

After securing a new agreement with Sudan in September, the aim was to increase crude production to pre-shutdown levels of about 300,000 barrels per day. Indian state-owned ONGC Videsh said it would finance a $300m internal pipeline to connect oil fields at Thar Jath in Unity state to Paloch in Upper Nile state. The facility will enable ONGC Videsh to increase output from Blocks 1, 2 and 4 and Bloc 5A in Thar Jath to 80,000 barrels per day from 10,000. South Sudan also has hopes of commissioning a refinery in 2014, one of two strategic mini-refineries it says could process 5,000-7,000 barrels per day to meet domestic energy consumption.

If only agreements with Khartoum could be made to hold, the economic future clearly holds promise. After the resumption of oil production, the IMF projected growth of 25% for 2013 and 43% in 2014.

Looking beyond oil, the government managed to quadruple its monthly non oil revenue collection to £SS60m ($19m) from the monthly level of £SS14m before crude output was stopped in 2012. It plans to set up a National Revenue Authority to boost tax collections and has been negotiating a $2bn loan with the Export-Import Bank of China to develop agriculture and mining industries to offset the fluctuations in oil earnings.

TOP SOUTH SUDANESE COMPANIES

No companies from South Sudan featured in The Africa's Report's Top 500 Companies in Africa 2013.

TOP SOUTH SUDANESE BANKS

No banks from South Sudan featured in The Africa's Report's Top 200 Banks in Africa 2012.



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