In 2011 the government announced that South Sudan’s illiteracy rate was 73 percent. Credit: John Robinson/IPS

By Charlton Doki
JUBA, Dec 12 2012 (IPS)

South Sudan may have received slightly more than 10 billion dollars in oil revenue from 2005 to January 2012, when oil production shut down, according to both government officials and the World Bank.

But development experts have urged the government to begin investing in the country and its people, as basic social services remain scarce.

South Sudan shut down its production of oil after a dispute with neighbouring Sudan over transit fees earlier this year. But production is expected to resume in the next few months, after an agreement between the two countries was reached in September.

However, Dr. Leben Nelson Moro of Juba University’s Faculty of Peace and Development Studies told IPS that the government needed to start setting part of the oil revenues aside to build much-needed infrastructure to kick start this east-central African nation’s development.

“The oil money must be used in a manner that will be beneficial to the whole country and not the few people who are close to the treasury,” he said.

While the government helps fund primary and secondary school education and health services at hospitals in some state capitals, its contribution to these services is minimal.

In some hospitals, workers’ salaries and medicines are paid for by NGOs, and sometimes the not-for-profit organisations are the sole providers of school textbooks and other stationary supplies in schools here.

“The government needs to adopt new ways of managing the oil revenues so that money goes to development projects that benefit the whole country,” Moro stressed.

“We know that while many parts of the country are food insecure, there are places like Yei (Yei County in Central Equatoria State) and Western Equatoria state that produce plenty of food. You need to build roads to where the food is produced,” he said.

South Sudan has only 110 kilometres of tarmac roads in the capital, Juba, with only one tarmac road linking the city to the Ugandan border. In addition, many areas here are only accessible by air.

Moro said that the government also needed to prioritise education and also provide basic services like healthcare.

“We have many young people who need skills. The government should ensure young people receive skills training to enable them to get jobs.

“In order for our people to work hard and develop the country, they must first be in good health. But for them to be healthy there must be good healthcare services in the country,” said Moro.

The majority of South Sudan’s nearly nine million people have no access to any form of healthcare.

According to the Ministry of Health, South Sudan currently has 120 medical doctors, slightly over 100 registered nurses and less than 150 qualified midwives.

In some rural areas patients have to walk for two or more days to reach the nearest healthcare centre.

South Sudan has some of the worst health indicators globally. According to the United Nations Population Fund, this country’s maternal mortality rate is the worst in the world with 2,054 deaths for every 100,000 live births, largely because about 90 percent of women give birth away from formal medical facilities. Hospitals here lack drugs, equipment and trained workers. In addition, they are overcrowded.

Kenyi Spencer, an environmental economist and World Bank consultant on private sector development, told IPS that given that oil is a non-renewable resource, the money earned from it should be used to develop other sectors, like agricultural production.

“Agriculture will be the real driver of South Sudan’s economy in future, but the government has to take measures to develop it,” Spencer said.

He urged the government to prioritise education, arguing that the country’s high illiteracy rate was hindering development efforts. In 2011 the government announced that South Sudan’s illiteracy rate was 73 percent.

This country became Africa’s newest nation in July 2011. But decades of war with Sudan have meant that only a handful of the population were able to attend school.

“What is needed here is really a technical, rather than a theoretical, education. For this country to develop it needs plumbers, electricians, mechanics, carpenters and so forth. That is where the money should be invested,” Spencer said.

High among expectations is that as oil begins to flow again, the government will end the current austerity measures introduced in February. The measures, which included a cut in civil servants’ salaries, were implemented soon after the shut-down in oil production, which accounted for 98 percent of the country’s total GDP.

Many have not been happy with the forced cutbacks in this landlocked nation. On Sep. 7, in Rumbek Central County in the Lakes state, a group of 30 policemen attacked and shot the county’s Police Inspector Lieutenant Colonel Mangar Kajeny Kamich in the arm. They were reportedly unhappy about pay cuts.

The previous day, wildlife officers in the same state beat up their immediate superior after a reduction in their pay was announced, according to a report by the local Sudan Tribune newspaper.

Moro said that the government needed to increase civil servants’ salaries once the country began producing oil.

Soldiers patrol an oil field in Paloug, in South Sudan’s Upper Nile state. Credit:Jared Ferrie/IPS

“Many civil servants were affected by these measures. In the universities, some of the staff lost almost 75 percent of their income. Once oil begins to flow, it is inevitable that the government will have to do something about salaries,” he said.

South Sudanese President Salva Kiir promised in November that once oil production began, resources would be devoted to service delivery. Currently 40 percent of the country’s budget is spent on defence, and significant amounts have be lost  through corruption.

“Our physical and food security are top on the list of priority services we want to provide to our people. We will use the oil money to improve agriculture by providing farmers with seeds, tools and improved access to markets,” he said.

South Sudan's Petroleum and Mining Minister Stephen Dhieu Dau speaks at a meeting with donors earlier this year. Credit: Charlton Doki/IPS

By Charlton Doki
JUBA, Nov 28 2012 (IPS)

As South Sudan continues negotiations with Sudan regarding the resumption of oil production and transit, the South Sudanese government says that it is developing its own industry and will start producing fuel for domestic consumption within the next eight months in order to avoid continued reliance on its neighbour.

South Sudan’s Petroleum and Mining Minister Stephen Dhieu Dau told IPS that as oil was due to start flowing again, one of the government’s priorities was to establish the nation’s infrastructure in order to process the commodity itself.

“Our aim is to ensure that some of the oil can be processed in the country to meet domestic needs and end the frequent shortages of diesel and petrol in our country,” Dau said.

South Sudan shut down its production of oil in January after a dispute with neighbouring Sudan over oil transit fees. Both countries agreed to resume oil production and trade on Sep. 27 after former South African President Thabo Mbeki led the African Union’s mediation efforts in attempting to defuse a range of disagreements that spiked in January, which almost led to full-blown war in April.

Oil sales contributed 98 percent of South Sudan’s revenue. But despite taking with it 75 percent of Sudan’s oil when it gained independence from the rest of the country in 2011, South Sudan currently relies on Sudanese refineries and pipelines to process and transport its oil to the international market.

South Sudan’s President Salva Kiir said on Monday Nov. 26 at a meeting of state governors that oil production had not resumed this month as originally expected because of demands by Sudan that the country disarm the rebel Sudan People’s Liberation Movement North.

He did add that the issue would be resolved soon as he had spoken with Sudan’s President Omar al Bashir on Sunday Nov. 25 and they agreed that officials from the two countries would soon meet to discuss the issue.

But in a bid to reduce reliance on Sudan, on Nov. 20 Kiir launched the construction of an oil refinery in Melut, an oil-producing area in South Sudan’s Upper Nile state. A second refinery is being built in Tharjath, another oil-producing area located in the country’s Unity state. Both refineries are expected to have the capacity to refine 10,000 barrels per day.

Dau said the oil refineries were expected to be operational by July 2013, when the government expects to start producing fuel for domestic consumption.

“These refineries will create employment opportunities for our youth, which is one of the things we want so that people benefit from our natural resources,” Dau added.

Edmond Yakani of the local NGO Community Empowerment for Progress Organisation said that in addition to refineries, the landlocked country needed to build its own pipeline to the Kenyan Port of Lamu.

“I don’t think relations between the two countries will get any better and therefore South Sudan should endeavour to build its own pipeline,” Yakani told IPS.

Oil storage facilities at Bentiu, Unity State, South Sudan. Credit: Charlton Doki/IPS

Finance Minister Kosti Manibe Ngai said three months ago that work on the pipeline would start in June next year at an estimated cost of three billion dollars.

“The government also needs to build reservoirs so that if there are any problems with Sudan we can still have fuel to keep the country going,” Yakani added.

Despite having four billion barrels of proven oil reserves, the largest in East Africa, South Sudan still has to surmount daunting capacity issues.

The acting director general in the Energy and Mining Ministry Simon Chol Martin told IPS that the government was concerned about the small number of South Sudanese being employed by oil operating companies.

The Chinese-Malaysian consortium Dar Petroleum is currently South Sudan’s largest oil operator and Chinese and Malaysian nationals usually occupy technical and senior positions in the oil industry here. Prior to independence Sudanese nationals filled these positions, but many left the country after independence.

Paul Adong, chief executive of South Sudan’s national oil company, Nile Petroleum Corporation (NilePet), told IPS that the government’s priority was to ensure South Sudanese were recruited into the sector and that the necessary capacity building was done “to ensure that we increase the number of South Sudanese who can take charge of the sector in the long run.”

In order to improve the capacity of local staff, the government is working to reach an agreement with Norway’s Petrad to provide training, he said.

“There is only one way of building an exploration and production company and that’s through hands-on experience. It’s a knowledge-intensive process and you need not only the right degrees but practical experience in engineering,” Adong said. He added that once Juba resumed oil production, NilePet would build South Sudanese expertise in the industry.

Adong said with continuous capacity building he hoped NilePet would be successful in five years time. “I hope by then we will have the technical know-how. We would say we are successful if NilePet can operate a field entirely on its own,” he said.

Meanwhile, local communities and activists are urging oil companies to protect the environment in oil-producing areas and have called for reports of pollution to be investigated.

John Lam Obur, a Juba University student who hails from Melut, in Upper Nile state, said that the activities of oil companies had led to environmental pollution in his home area.

“Cattle are dying when they drink rain water near the oil fields, people are suffering from diseases never seen before, and the whole air smells bad because of the waste material from the oil fields,” he told IPS.

But Adong said oil companies were aware of the concerns and were working to address them, adding that they did not want to repeat the mistakes made by other oil companies in parts of Africa such as in the Niger Delta in Nigeria.

“We would rather give up the dollars and keep our community safe and our environment safe,” he said.