“We knew it would not be easy but we had hoped it would not be so difficult for us. The regime in Khartoum is the main cause for these hard times now, they first blocked our trade and what we used to buy from Khartoum and ship up the Nile and then they started hostilities in the areas due for their own referendum or consultations. They have driven tens of thousands off their land and these poor people had to run to Southern Sudan for their safety and ever here Khartoum bombed them in UN camps. And then they started stealing our oil, blackmailing us for a big cut for using the pipeline to Port Sudan, so then in the end our government just had to stop pumping oil until we can export through Kenya or otherwise Khartoum can be reasonable,” was the emailed comment from a regular high-ranking source in Juba when discussing the economic woes of his newly independent country with him. The world “Crossroads” comes to mind as the forced austerity directives from Juba’s government are set to bite deep and hard, cutting back to the proverbial bone and then some more, to make ends meet.
In 2010, well before independence finally came knocking, the Southern government relied to between 97 and 98 percent on oil related revenues and last year, according to figures which could not be independently verified, the country’s revenue was just under US$2 billion US.
The decree, stopping all the oil companies from pumping and shipping via the Khartoum controlled pipeline, has taken approximately 400,000 barrels of oil out of the market, probably slightly more as an ongoing audit into the pre-closure production appears to have unearthed a racket whereby more crude was pumped and shipped compared to the figures provided by the companies to government, as in particular “additional non documented wells” were found to exist. That oil was probably the first to be “stolen” as it bypassed the records in the South but was still sold by the North as their own, while at a later stage then the regime in Khartoum ruthlessly and quite openly diverted the pumped oil as their own, prompting first and outcry, then sharp protests and eventually the complete shutdown of oil production in the South, which previously accounted under a united Sudan for as much as 80 percent of the production.
The government is now racing against the clock to a seek alternate sources of tax and fees revenues, but building a pipeline some 2,000 kilometres long over at times geographically and climatically challenging terrain will take years to accomplish and cost billions of US dollars. Early suggestions, soon after the CPA was signed in January of 2005, were to look at animal ranching, agriculture and agro-processing but those ventures have not taken off in a commercially significant way due to the absence of larger scale foreign investments – those having trouble to make sense of the often muddled land ownerships and laws governing the ownership of land, of a lack of incentives vis-a-vis investments, repatriation of funds, payment for foreign source loans and as and when payment of dividends, as a strict foreign exchange control system is now in place to deal with the lack of hard currency.
Tourism too was mooted for some time as a saviour, to attract investments, create jobs, earn foreign exchange but the Khartoum regime fueled internal strife in the South through proxy militias and disguised bandits, making even the most hardened adventure tourists think twice about ending up in a dicey situation. Equally are laws and regulations for the sector still largely absent, making investments a gamble which may pay off for anything tented and mobile but not for bricks and mortar construction.
The assault by such means from Khartoum however does not end here as they are now sending back hundreds of thousands of more “Southerners” who lived in the North, as they are no longer considered citizens of the North Sudan and many of whom have been denied residents rights and permits to work. That stream of willfully displaced people too will add more headaches and concerns to the Southern leadership in the state governments and the central government, as they will require jobs, housing and social services, which are already overstretched as it is. Inflation has depleted the purchasing power of households, running for some time in the 50+ percent region, causing the government to send out delegations in search of budget support, loans and grants – the question being what the long term cost of it will be for the young nation.
East Africa is now challenged by Southern Sudan’s worsening economic and security situation to contemplate how best to assist them, as they have already filed for membership to the East African Community and would be most keen to see their East African neighbours stand by them shoulder to shoulder, should Khartoum finally “go hot” on them as has been speculated over, since the Bashir regime has to either create a foreign adventure or else be pushed aside from more radical elements within. The signing of the LAPSSET memorandum of understanding and the joint laying of the foundation stones for the new port, from which a highway, railway and pipeline is to connect the Kenyan coast to Southern Sudan – and Ethiopia for that matter – was an opportunity for the heads of state and government present, Kenya’s Mwai Kibaki, Southern Sudan’s Salva Kiir and Ethiopia’s Menes Zenawi, to strategize over their reaction, possible joint measures and seeking international support for defending Southern Sudan’s rights, but it was not even officially acknowledged that this issue was on the meeting agenda when the three met in private.
“Now we only have hope left but the enthusiasm over independence has vanished, most of it anyway, because life has become so hard that people almost wish the slave masters in Khartoum would continue to feel us crumbs, this being better than not having anything else to feed on. We count on our friends to get the message out how desperate the situation has become and how we now need immediate help with food, medicines and to build infrastructure, schools, hospitals, roads, bridges and have NGO’s come here to assist.”
In closing, instead of having a stable and prosperous Southern Sudan bordering Uganda and Kenya, the scenario of a failed state is now being openly discussed on line and in the media, not a prospect either neighbour would in the least fancy, while Khartoum, living also on borrowed time, is raring to take the spoils and “repatriate” the oil wells and oil wealth, given the slightest chance. Hot stuff in more than one way and with significant ramifications for the entire region down to the Horn of Africa.