Can South Sudan Survive Without Oil Revenues?
By Madhieu Thiep Madhieu, Juba, South Sudan
April 20, 2015 (SSB) —- South Sudan is among the world richest countries in oil, fertile agriculture land and other natural resources in most part of its regions.
In the then Sudan, on shore petroleum activities began in 1975 when US oil giant Chevron was granted a large concession in several provinces of South-central Sudan including Western Upper Nile and Western Kordofan.
In 1979, Chevron struck oil near abu Jabra and then al Sharaf on border between Darfur and Kordof. Major discoveries were made in Western Upper Nile now block 1, near Bentiu and developed Muglad basin and found two large oil fields in unity and Heglig.
In Feb 1984, Chevron suspended its operations after the killing if its three expatriate field workers by Anyanya II fighters. No oil extraction in this period because the company dismantled their operations. President Jafar Nimieri attempted to redraw the boundary of Upper Nile province so that oil fields discovered would be within the province of North Kordofan.
This is just brief note of how oil was first invented in Northern and Southern Sudan provinces.
The production of oil began in 1998 when the contracts were signed worth $1 billion with Chinese, Malaysian and European suppliers. Pipeline began to work in 1999 where more than 500,000 barrels were loaded onto tankers for export.98% of country income was from oil and remaining percent from other commodities such as cotton and gum Arab.
After the succession of South Sudan via referendum on self determination, almost all 98% of oil revenue went with the newly born South Sudan, leaving Sudan economy at the brink of collapse, due to increment of dollars against Sudanese pounds.
Despite abundance oil resources and fertile agriculture land South Sudan has, our economy continues to grapple right from 2012 when the government announced austerity measure up to date. As we speak, our South Sudanese currency [SSP] is badly losing value against the so call USD.
The exchange rate in the black market is 820. Currently; the central bank of South Sudan has no dollars at hand to give to traders for purchasing essential goods for consumption. Food Prices in the market doubling every single day.
“Can south Sudan survive without oil?”
If our economy suffers due to fall in oil prices in international market, can it survive without oil? What if South Sudan was like the other land lock countries that are lacking oil in their soil. What would have happen?
The answer to me is’’ Yes ‘but it might be ‘’No’’ to people who believe that without oil money; no developmental activities, service delivery would be hampered, there would be no salaries for civil servants, the list is endless.
All of these happen because we largely depend on oil as source of income neglecting other minerals that would generate more revenue to the country. South Sudan can still develop and prosper if we can explore and improve non oil revenues efficiently and effectively without thinking of embezzlement and laundering.
Many countries don’t have this curse oil and their economy is more stable. Because they have prioritized agriculture, livestock products, fisheries and other national resources such as wildlife, water and forest [host of acacia tree for gum Africa production not gum Arab].
Livestock products such as milk, meat, Skin and hide are so vital for any nation if given special attention.
With these large number of cattle, South Sudan has we can supply [export] the whole world with meat, milk, hide and skin if factories for processing these products are established. Agriculture is also an importance pillar towards boosting national economy.
Government should setup irrigation schemes and plant all sorts of cash crops for export so long as river Nile is still flowing. With agriculture we can generate more than 80% of total income if our government gives it a priority not by word of mouth but practically.
Mathieu Thiep Mathieu is a concern South Sudanese living in South Sudan and has a heart to put his thoughts down in to writing. The opinions are solely his. Reach him on madhienthiep@gmail.com
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