Economy of South Sudan
Encyclopedia
The economy
of South Sudan
is one of the world's weakest and most underdeveloped with South Sudan having little existing infrastructure and the highest maternal mortality and female illiteracy rates in the world as of 2011. Until 1992, the Sudanese Pound
has replaced the dinar as Sudan
's currency. Until a referendum
, South Sudan will become to first to use the new currency and will be nicknamed 'the Sudani'. Inaugural Finance Minister David Deng Athorbie
announced the creation of the South Sudanese pound
to go into effect a week after independence. South Sudan is one of the poorest countries in the world: most villages in the country have no electricity or running water, and the country's overall infrastructure is lacking with few paved roads anywhere in the country.
. In Central Equatoria, some teak plantations are at Kegulu; the other, oldest planted forest reserves are Kawale, Lijo, Loka West, and Nuni. Western Equatoria timber resources include mvuba trees at Zamoi.
One of the major natural features of South Sudan is the River Nile
whose many tributaries have sources in the country. The region also contains many natural resources such as petroleum
, iron ore, copper
, chromium
ore, zinc
, tungsten
, mica
, silver
, gold
, and hydropower
. The country's economy, as in many other developing countries, is heavily dependent on agriculture. Some of the agricultural produce include cotton
, groundnuts (peanut
s), sorghum
, millet
, wheat
, gum arabic
, sugarcane
, cassava
(tapioca), mango
s, papaya
, banana
s, sweet potatoes, and sesame
.
ese oil output. The oil revenues according to the Comprehensive Peace Agreement
(CPA), were to be split equally for the duration of the agreement period. Since South Sudan relies on pipelines, refineries
, and port facilities in Red Sea
state in North Sudan, the agreement stated that the government in Khartoum
would receive 50% share of all oil revenues. Oil revenues constitute more than 98% of the government of South Sudan's budget according to the southern government's Ministry of Finance and Economic Planning and this has amounted to more than $8 billion in revenue since the signing of the peace agreement.
In recent years, a significant amount of foreign-based oil drilling has begun in South Sudan, raising the land's geopolitical profile. Oil and other mineral resources can be found throughout South Sudan, but the area around Bentiu
is commonly known as being especially rich in oil, while Jonglei
, Warrap, and Lakes
have potential reserves. During the autonomy years from 2005 to 2011, Khartoum partitioned much of Sudan into blocks, with about 85% of the oil coming from the South. Blocks 1, 2, and 4 are controlled by the largest overseas consortium, the Greater Nile Petroleum Operating Company
(GNPOC). GNPOC is composed of the following players: China National Petroleum Corporation
(CNPC, People's Republic of China
), with a 40% stake; Petronas
(Malaysia), with 30%; Oil and Natural Gas Corporation
(India
), with 25%; and Sudapet
of the central Sudan government with 5%. Due to Sudan's presence on the United States
' list of state sponsors of terrorism and Khartoum's insistence upon receiving a share of the profit from any oil deal South Sudan conducts internationally, US oil companies cannot do business with landlocked South Sudan. As such, US companies have virtually no presence in the South Sudanese oil sector.
The other producing blocks in the South are blocks 3 and 7 in eastern Upper Nile state. These blocks are controlled by Petrodar
which is 41% owned by CNPC, 40% by Petronas, 8% by Sudapet, 6% by Sinopec Corp
and 5% by Al Thani.
Another major block in the South, formerly called Block B by the North Sudanese government, is claimed by several players. Total
of France
was awarded the concession for the 90,000 square kilometre block in the 1980s but has since done limited work invoking "force majeure
". Various elements of the SPLM handed out the block or parts thereof to other parties of South Sudan. Several of these pre-Naivasha deals were rejected when the SPLM/A leader Dr. John Garang de Mabior lost power.
The wealth-sharing section of the CPA states that all agreements signed prior to the CPA would hold; they would not be subject to review by the National Petroleum Commission (NPC), a commission set up by the CPA and composed of both Khartoum and Southerners and co-chaired by both President al-Bashir of Khartoum and President Kiir of South Sudan. However, the CPA does not specify who could sign those pre-CPA agreements.
According to some reports, the People's Republic of China
has offered to extend a line of credit to South Sudan for several years while an alternative pipeline to the Kenya
n coast is laid and an export deal is worked out with the Kenyan government, but this scenario is regarded as less likely than continued South Sudanese dependence on Sudanese infrastructure. If such a deal were struck, though, and South Sudan began exporting oil from Kenyan ports, the US would become a potential trade partner and South Sudanese oil importer. In the meantime, the South Sudanese government intends to lobby the US to ease restrictions on American companies doing business with Sudan.
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
of South Sudan
South Sudan
South Sudan , officially the Republic of South Sudan, is a landlocked country located in the Sahel region of northeastern Africa. It is also part of the North Africa UN sub-region. Its current capital is Juba, which is also its largest city; the capital city is planned to be moved to the more...
is one of the world's weakest and most underdeveloped with South Sudan having little existing infrastructure and the highest maternal mortality and female illiteracy rates in the world as of 2011. Until 1992, the Sudanese Pound
Sudanese pound
The Sudanese pound is the currency of Sudan and also used in South Sudan until finalization of the introduction of the South Sudanese pound. Both Arabic and English names for the denominations appear on the country's banknotes and coins. On 24 July 2011, Sudan launched a new currency...
has replaced the dinar as Sudan
Sudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
's currency. Until a referendum
Southern Sudanese independence referendum, 2011
A referendum took place in Southern Sudan from 9 to 15 January 2011, on whether the region should remain a part of Sudan or become independent. The referendum was one of the consequences of the 2005 Naivasha Agreement between the Khartoum central government and the Sudan People's Liberation...
, South Sudan will become to first to use the new currency and will be nicknamed 'the Sudani'. Inaugural Finance Minister David Deng Athorbie
David Deng Athorbie
David Deng Athorbie is the inaugural and current interim Finance Minister of South Sudan. One of his first tasks is to introduce the South Sudanese pound as the new currency of South Sudan....
announced the creation of the South Sudanese pound
South Sudanese pound
The South Sudanese pound is the official currency of the Republic of South Sudan. It is subdivided into 100 piastres. It was approved by the Southern Sudan Legislative Assembly prior to secession on 9 July 2011 from Sudan...
to go into effect a week after independence. South Sudan is one of the poorest countries in the world: most villages in the country have no electricity or running water, and the country's overall infrastructure is lacking with few paved roads anywhere in the country.
Natural resources
South Sudan exports timber to the international market. Some of the states with the best known teaks and natural trees for timber are Western Equatoria and Central EquatoriaCentral Equatoria
-Government:Executive*Governor - Maj. Gen. Clement Wani Konga*Deputy Governor and Minister of Education, Science and Technology - Mr. Manase Lomole Waya *Minister of Education - Lokulenge Lole Lokule...
. In Central Equatoria, some teak plantations are at Kegulu; the other, oldest planted forest reserves are Kawale, Lijo, Loka West, and Nuni. Western Equatoria timber resources include mvuba trees at Zamoi.
One of the major natural features of South Sudan is the River Nile
Nile
The Nile is a major north-flowing river in North Africa, generally regarded as the longest river in the world. It is long. It runs through the ten countries of Sudan, South Sudan, Burundi, Rwanda, Democratic Republic of the Congo, Tanzania, Kenya, Ethiopia, Uganda and Egypt.The Nile has two major...
whose many tributaries have sources in the country. The region also contains many natural resources such as petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
, iron ore, copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
, chromium
Chromium
Chromium is a chemical element which has the symbol Cr and atomic number 24. It is the first element in Group 6. It is a steely-gray, lustrous, hard metal that takes a high polish and has a high melting point. It is also odorless, tasteless, and malleable...
ore, zinc
Zinc
Zinc , or spelter , is a metallic chemical element; it has the symbol Zn and atomic number 30. It is the first element in group 12 of the periodic table. Zinc is, in some respects, chemically similar to magnesium, because its ion is of similar size and its only common oxidation state is +2...
, tungsten
Tungsten
Tungsten , also known as wolfram , is a chemical element with the chemical symbol W and atomic number 74.A hard, rare metal under standard conditions when uncombined, tungsten is found naturally on Earth only in chemical compounds. It was identified as a new element in 1781, and first isolated as...
, mica
Mica
The mica group of sheet silicate minerals includes several closely related materials having highly perfect basal cleavage. All are monoclinic, with a tendency towards pseudohexagonal crystals, and are similar in chemical composition...
, silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
, gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
, and hydropower
Hydropower
Hydropower, hydraulic power, hydrokinetic power or water power is power that is derived from the force or energy of falling water, which may be harnessed for useful purposes. Since ancient times, hydropower has been used for irrigation and the operation of various mechanical devices, such as...
. The country's economy, as in many other developing countries, is heavily dependent on agriculture. Some of the agricultural produce include cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
, groundnuts (peanut
Peanut
The peanut, or groundnut , is a species in the legume or "bean" family , so it is not a nut. The peanut was probably first cultivated in the valleys of Peru. It is an annual herbaceous plant growing tall...
s), sorghum
Sorghum
Sorghum is a genus of numerous species of grasses, one of which is raised for grain and many of which are used as fodder plants either cultivated or as part of pasture. The plants are cultivated in warmer climates worldwide. Species are native to tropical and subtropical regions of all continents...
, millet
Millet
The millets are a group of small-seeded species of cereal crops or grains, widely grown around the world for food and fodder. They do not form a taxonomic group, but rather a functional or agronomic one. Their essential similarities are that they are small-seeded grasses grown in difficult...
, wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
, gum arabic
Gum arabic
220px|thumb|right|Acacia gumGum arabic, also known as acacia gum, chaar gund, char goond, or meska, is a natural gum made of hardened sap taken from two species of the acacia tree; Acacia senegal and Acacia seyal...
, sugarcane
Sugarcane
Sugarcane refers to any of six to 37 species of tall perennial grasses of the genus Saccharum . Native to the warm temperate to tropical regions of South Asia, they have stout, jointed, fibrous stalks that are rich in sugar, and measure two to six metres tall...
, cassava
Cassava
Cassava , also called yuca or manioc, a woody shrub of the Euphorbiaceae native to South America, is extensively cultivated as an annual crop in tropical and subtropical regions for its edible starchy tuberous root, a major source of carbohydrates...
(tapioca), mango
Mango
The mango is a fleshy stone fruit belonging to the genus Mangifera, consisting of numerous tropical fruiting trees in the flowering plant family Anacardiaceae. The mango is native to India from where it spread all over the world. It is also the most cultivated fruit of the tropical world. While...
s, papaya
Papaya
The papaya , papaw, or pawpaw is the fruit of the plant Carica papaya, the sole species in the genus Carica of the plant family Caricaceae...
, banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s, sweet potatoes, and sesame
Sesame
Sesame is a flowering plant in the genus Sesamum. Numerous wild relatives occur in Africa and a smaller number in India. It is widely naturalized in tropical regions around the world and is cultivated for its edible seeds, which grow in pods....
.
Oil
Prior to independence, South Sudan produced 85% of SudanSudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
ese oil output. The oil revenues according to the Comprehensive Peace Agreement
Comprehensive Peace Agreement
The Comprehensive Peace Agreement , also known as the Naivasha Agreement, was a set of agreements culminating in January 2005 that were signed between the Sudan People's Liberation Movement and the Government of Sudan...
(CPA), were to be split equally for the duration of the agreement period. Since South Sudan relies on pipelines, refineries
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
, and port facilities in Red Sea
Red Sea (state)
Red Sea is one of the 15 wilayat or states of Sudan . It has an area of 212,800 km² and an estimated population of 1,396,000 . Port Sudan is the capital of the state. Sudan claims, but does not control the Hala'ib Triangle, a region disputed between Sudan and Egypt...
state in North Sudan, the agreement stated that the government in Khartoum
Khartoum
Khartoum is the capital and largest city of Sudan and of Khartoum State. It is located at the confluence of the White Nile flowing north from Lake Victoria, and the Blue Nile flowing west from Ethiopia. The location where the two Niles meet is known as "al-Mogran"...
would receive 50% share of all oil revenues. Oil revenues constitute more than 98% of the government of South Sudan's budget according to the southern government's Ministry of Finance and Economic Planning and this has amounted to more than $8 billion in revenue since the signing of the peace agreement.
In recent years, a significant amount of foreign-based oil drilling has begun in South Sudan, raising the land's geopolitical profile. Oil and other mineral resources can be found throughout South Sudan, but the area around Bentiu
Bentiu
-Location:Bentiu is located in Rubkona County, Unity State, in northern South Sudan, near the International border with the Republic of Sudan. This location lies approximately , by road, northwest of Juba, the capital and largest city in the country. Bentiu sits on the southern banks of the Bahr...
is commonly known as being especially rich in oil, while Jonglei
Jonglei
Jonglei is one of the 10 states of South Sudan. Jonglei is the largest state in the Republic of South Sudan, with approximately 122,479 km2, as well as the most populous according to the controversial 2008 census conducted during present-day South Sudan's second period of autonomy. Bor is the...
, Warrap, and Lakes
Lakes (state)
Lakes is one of the 10 states of South Sudan. It has an area of 40,235 km². Rumbek is the capital of the state. Lakes is in the Bahr el Ghazal region of South Sudan, in addition to Northern Bahr el Ghazal, Western Bahr el Ghazal, and Warrap states. Bahr el Ghazal itself was a former province...
have potential reserves. During the autonomy years from 2005 to 2011, Khartoum partitioned much of Sudan into blocks, with about 85% of the oil coming from the South. Blocks 1, 2, and 4 are controlled by the largest overseas consortium, the Greater Nile Petroleum Operating Company
Greater Nile Petroleum Operating Company
The Greater Nile Petroleum Operating Company is a petroleum exploration and production company operating in Sudan. It was incorporated on 18 June 1997 and undertook construction of the Greater Nile Oil Pipeline which links Sudan's inland oil fields with refineries at Khartoum and Port Sudan.The...
(GNPOC). GNPOC is composed of the following players: China National Petroleum Corporation
China National Petroleum Corporation
China National Petroleum Corporation is a state-owned fuel-producing corporation and the largest integrated oil and gas company in the People's Republic of China...
(CNPC, People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
), with a 40% stake; Petronas
Petronas
PETRONAS, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company that was founded on August 17, 1974. Wholly owned by the Government of Malaysia, the corporation is vested with the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and...
(Malaysia), with 30%; Oil and Natural Gas Corporation
Oil and Natural Gas Corporation
The Oil and Natural Gas Corporation Limited is an Indian state-owned oil and gas company headquartered in New Delhi, India. It is one of the largest Asia-based oil and gas exploration and production companies, and produces around 77% of India's total crude oil production and around 81% of...
(India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
), with 25%; and Sudapet
Sudapet
The Sudan National Petroleum Corporation, also known as Sudapet, is a state-owned oil company based in Sudan. It was founded in 1997 and is 100% owned by the Ministry for Energy and Mining....
of the central Sudan government with 5%. Due to Sudan's presence on the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
' list of state sponsors of terrorism and Khartoum's insistence upon receiving a share of the profit from any oil deal South Sudan conducts internationally, US oil companies cannot do business with landlocked South Sudan. As such, US companies have virtually no presence in the South Sudanese oil sector.
The other producing blocks in the South are blocks 3 and 7 in eastern Upper Nile state. These blocks are controlled by Petrodar
PetroDar
The PetroDar Operating Company Ltd is a consortium of oil exploration and production companies operating in Sudan with its headquarters in Khartoum. The consortium was incorporated in the Virgin Islands on 31 October 2001...
which is 41% owned by CNPC, 40% by Petronas, 8% by Sudapet, 6% by Sinopec Corp
Sinopec
China Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....
and 5% by Al Thani.
Another major block in the South, formerly called Block B by the North Sudanese government, is claimed by several players. Total
Total S.A.
Total S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
of France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
was awarded the concession for the 90,000 square kilometre block in the 1980s but has since done limited work invoking "force majeure
Force majeure
Force majeure or vis major "superior force", also known as cas fortuit or casus fortuitus "chance occurrence, unavoidable accident", is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of...
". Various elements of the SPLM handed out the block or parts thereof to other parties of South Sudan. Several of these pre-Naivasha deals were rejected when the SPLM/A leader Dr. John Garang de Mabior lost power.
The wealth-sharing section of the CPA states that all agreements signed prior to the CPA would hold; they would not be subject to review by the National Petroleum Commission (NPC), a commission set up by the CPA and composed of both Khartoum and Southerners and co-chaired by both President al-Bashir of Khartoum and President Kiir of South Sudan. However, the CPA does not specify who could sign those pre-CPA agreements.
According to some reports, the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
has offered to extend a line of credit to South Sudan for several years while an alternative pipeline to the Kenya
Kenya
Kenya , officially known as the Republic of Kenya, is a country in East Africa that lies on the equator, with the Indian Ocean to its south-east...
n coast is laid and an export deal is worked out with the Kenyan government, but this scenario is regarded as less likely than continued South Sudanese dependence on Sudanese infrastructure. If such a deal were struck, though, and South Sudan began exporting oil from Kenyan ports, the US would become a potential trade partner and South Sudanese oil importer. In the meantime, the South Sudanese government intends to lobby the US to ease restrictions on American companies doing business with Sudan.