without oil money, state coffers are empty and elections are threatened

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At a street hairdresser, in Juba, in February 2023. SIMON MAINA / AFP

Hiding his sobs, a man walks away, pulling a small suitcase on wheels to which he has attached a blanket. Gai Lel Ngungdeng, a diplomat stationed at the South Sudanese embassy in Rome, was thrown onto the streets. Monday May 6, he was evicted from his apartment “for non-payment of rent for more than six months” and finds himself “Homeless, sleeping with refugees in the streets” from the Italian capital, explains a message that has gone viral on WhatsApp messaging.

Read also: Juba, former enemy capital, became refuge for thousands of Sudanese fleeing the war

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While the scene sparked mixed reactions in his native country – with some internet users accusing him of having “cried in public to arouse pity » –, she underlines how serious the economic crisis that South Sudan is going through is. So serious that the State owes its civil servants – diplomats included – six months of salary arrears. The situation is all the more alarming as inflation is soaring. The prices of bread and fuel have more than doubled. An increase accelerated by the fall of the South Sudanese pound, whose black market value has been divided by three against the dollar since January.

Weighed down by decades of conflict and underdevelopment, the South Sudanese economy suffered from the civil war which tore the young state between 2013 and 2018. But it was another crisis, imported from neighboring Sudan, which plunged the country’s finances into the abyss. The war waged by generals Abdel Fattah Al-Bourhane and Mohammed Hamdan Daglo since April 2023 is paralyzing one of the pipelines through which South Sudanese crude passes. However, oil, transported by pipeline from the southern oil fields to Port Sudan on the Red Sea, represents 90% of Juba’s revenues.

Opacity

For the government, the closure of the pipeline represents a daily shortfall of 4 million dollars (3.7 million euros). And for the South Sudanese, whose consumer goods or almost all are imported, it translates into an explosion in the cost of living.

“Most families have resolved to eat only one meal a day”testifies Edmund Yakani, director of Community Empowerment for Progress Organization (CEPO), a civil society organization: “Children are taken out of school for lack of money. And we observe an increase in mortality due to the lack of money to access medical services. » According to CEPO estimates, “between five and ten young South Sudanese graduates leave South Sudan every month to try to reach West Africa by land in order to go to Europe, avoiding Libya “.

Read also: In South Sudan, the influx of populations driven out by the fighting in Khartoum raises fears of further destabilization

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The central bank is trying, without real success, to stabilize the currency, while the government is busy obtaining loans to compensate for the loss of oil revenues. A loan negotiated on the sidelines of COP28 by the previous Minister of Finance, Bak Barnaba Chol, in the amount of $12.9 billion from Hamad Bin Khalifa Department of Projects (HBK DOP), a company based in Dubai, late December, was revealed at the end of April by the Bloomberg news site. According to a document dated December 28, 2023 which leaked on social networks, the loan would be backed in particular by deliveries of South Sudanese oil to the emirate until 2043. An agreement which provoked the fury of Internet users.

The criticisms are all the more harsh as the management of public finances by the authorities is considered opaque. “Most of the oil money has been allocated to road construction in recent years, totaling some $6 billion. However, these contracts were not awarded competitively and there is no transparency on how the money was spent. notes a diplomatic Source.

Faced with this loss of confidence, the big donor countries which helped the country see the light of day – the United States in the lead, the United Kingdom and Norway – have no intention of coming to the rescue of the South Sudanese government. Especially since their budgets for humanitarian assistance are falling – the United Kingdom has cut more than 50% of its aid to South Sudan between 2020 and 2022, reducing it from 156 to 76 million pounds. And as the humanitarian crisis worsens, with 7.1 of the 12 million people experiencing severe food insecurity according to the UN, only 10.7% of the needs for 2024, amounting to 1.79 billion of dollars, are covered.

Doubts

While Juba’s coffers are gradually emptying and repairs to the pipeline could take until the end of August, doubts are growing regarding the capacity of the national unity and transitional government, formed under the 2018 peace agreement, to organize elections. Scheduled for the end of 2024, the election would be the first in the country’s history; the current president, Salva Kiir, was elected in 2010, before South Sudan’s independence.

Read also: In South Sudan, a “peace industry” with still fragile results

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If, during April, the government managed to disburse 15 million dollars for the national electoral commission (out of the 250 million it needs), for “pre-electoral” activities, such as the installation of its offices, the lack of resources allocated to the peace process, and delays in the implementation of key activities such as the unification of the armed forces of the opposition and the government, or the creation of a permanent Constitution to replace the provisional Constitution, dating of independence in 2011… portend a further postponement.

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A “inter-party dialogue” is underway, notably between the camp of Riek Machar, the first vice-president, leader of the largest opposition group, and that of the president, Salva Kiir, to decide whether to maintain or postpone the elections. But, for Daniel Akech, conflict analyst for the International Crisis Group (ICG), the financial crisis poses a threat to the peace agreement, because it is actually based on the flow of oil.” “What holds the elites together and keeps them from going to war is oil money. But when this resource is reduced, the system is not sustainable. How are they going to keep this going? »asks the researcher.

Florence Miettaux (Juba, correspondence)

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