Gov­er­nance

‘Hand­shake’ gives South Su­dan na­tion­hood sec­ond chance

Business Daily (Kenya) - - FRONT PAGE - GE­ORGE WACHIRA Pe­tro­leum Fo­cus Con­sul­tants, wachira@ petroleum­fo­cus.com

South Su­dan had a good story go­ing un­til De­cem­ber 2013 when a civil war broke out and dashed hopes of many in­clud­ing its re­gional neigh­bours. South Su­dan was al­ready walk­ing a path to­wards be­com­ing a notable African oil pro­ducer. In 2011, when South Su­dan ac­quired its state­hood, oil pro­duc­tion was about 350,000 bar­rels per day (bpd). To­day this has plum­meted to about 120,000 bpd due to well shut­downs prompted by civil wars. For com­par­i­son, Kenya ex­pects to pro­duce about 80,000 bpd, while Uganda plans a 120,000 bpd pro­duc­tion. What is sig­nif­i­cant is that oil con­trib­utes over 90 per cent of rev­enues to South Su­dan bud­gets. This makes the peace and oil sto­ries crit­i­cally and mu­tu­ally ur­gent. Year 2018 has seen sev­eral game-chang­ing “hand­shakes” here in Africa. We had our Kenyan “bridge-build­ing” hand­shake ear­lier this year while Eritrea and Ethiopia had their trans­for­ma­tional hand­shake re­cently. The hand­shake last month be­tween the South Su­dan Pres­i­dent Salva Kiir and Riek Machar gave South Su­dan a sec­ond chance to prove its ca­pac­ity to sus­tain na­tion­hood... The fact that the peace deal is “guar­an­teed” by Pres­i­dent Bashir of Su­dan gives it a strong chance for per­ma­nence. Khar­toum has a gen­uine vested in­ter­est in a north-south eco­nomic co-op­er­a­tion. In re­spect of oil, the two na­tions share oil basins and oil ex­port in­fra­struc­ture via Port Su­dan on the Red Sea with Su­dan col­lect­ing $25 for ev­ery bar­rel of oil ex­ported by South Su­dan. As Kenya moth­ered the Com­pre­hen­sive Peace Agree­ment which her­alded the sep­a­ra­tion of the north and the south, we har­boured a far-fetched brief that the two na­tions could never work to­gether af­ter sep­a­ra­tion, and that Juba would re­quire an alternative oil ex­port route. This was

Kenya har­boured a far-fetched brief that the two na­tions could never work to­gether af­ter sep­a­ra­tion

the ge­n­e­sis of the LAPSSET (Lamu Port South Su­dan & Ethiopia Trans­port) cor­ri­dor con­cept. It as­sumed that South Su­dan would ex­port their crude oil via a new pipe­line to a new port at Lamu with part of the oil feed­ing a 120,000 bpd re­fin­ery at Lamu. By the time the LAPSSET study was en­dorsed by Pres­i­dent Kibaki in 2011, South Su­dan was more or less de­cided to con­tinue ex­port­ing oil via Port Su­dan. In 2012 a geo-tech­ni­cal co­in­ci­dence gave Kenya its oil at Lo­kichar, which is lo­cated on the orig­i­nal LAPSSET pipe­line route. This helped to sus­tain the LAPSSET cor­ri­dor con­cept, based this time not on tran­sit oil from South Su­dan but Kenyan oil... The three huge “high-prospect” oil blocks (B1, B2, B3) in the south of South Su­dan are yet to be ex­plored. Any oil dis­cov­ered in th­ese south­ern blocks can po­ten­tially be piped via Ugan­dan or Kenyan oil ex­port pipe­lines. In­ci­den­tally To­tal and Tul­low who hold oil in­ter­ests in Uganda and Kenya have just failed to agree terms for Block B1 andb2 con­ces­sions with Juba. Block B3 is held by Oranto, a Nige­rian com­pany with in­ter­ests in Ugan­dan oil basins. For those who have been to South Su­dan, they will con­firm that the coun­try holds tremen­dous po­ten­tial and re­sources in vir­tu­ally all the key sec­tors — agri­cul­ture, live­stock, forestry

Frame­works for last­ing peace and eco­nomic growth can only be de­ter­mined by South Su­danese them­selves.”

and min­er­als. As South Su­dan em­barks on their path to po­lit­i­cal and eco­nomic re­cov­ery, the emphasis should be how to use oil rev­enues to grow ca­pac­ity in the other sec­tors so as to sig­nif­i­cantly di­ver­sify the econ­omy away from oil to gain­fully em­ploy as many cit­i­zens. The coun­try should also max­imise eco­nomic value from its mem­ber­ship of the East Africa Com­mu­nity espe­cially in the on­go­ing re­gional in­fra­struc­ture link­ages (roads, SGR and pipe­lines). Si­mul­ta­ne­ously, the coun­try should strengthen the ex­ist­ing trade links with Su­dan. Frame­works for last­ing peace and eco­nomic growth can only be de­ter­mined by South Su­danese them­selves. The ul­ti­mate proof of suc­cess and sus­tain­abil­ity of the peace deal is when the South Su­dan Di­as­pora feels con­fi­dent to re­turn and par­tic­i­pate in so­cio-eco­nomic de­vel­op­ment, with for­eign in­vest­ments fol­low­ing in their wake. In­deed the hand­shake gives South Su­dan a sec­ond chance with every­one ex­pect­ing a gen­uine po­lit­i­cal en­deav­our from South Su­dan lead­er­ship. -The in­gre­di­ents of the hand­shake should be nur­tured and pro­tected, with all the lessons learned since 2011 form­ing the ba­sis for a re­newed South Su­dan.

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