This largesse abruptly ended as President Kiir moved to consolidate power after independence, sidelining his rivals and firming up his grip on the oil economy. The result was to fracture the country into warring ethno-political camps that continue to be a source of instability despite the formation of a unity government in 2020.Īs South Sudan struggles to recover from civil war, its broken state finances are receiving renewed attention. The easy money quickly built a vast patronage system that helped unite rival camps but also papered over the country’s deep ethno-political divisions. The landmark 2005 peace deal that paved the way for its secession from Sudan granted Juba 50 per cent of the South’s oil revenues, pumping billions into the new semi-autonomous government as it prepared to stand on its own. Oil has always been central to South Sudan’s political fortunes. But the government is riven by internal power struggles and its reluctance to lift the shroud from upon the oil economy is blocking reforms that could sustain a broader political settlement. Peace talks led by neighbouring leaders resulted in the 2018 agreement and a power-sharing arrangement between President Salva Kiir and his main rival, Riek Machar, though an insurgency continues in the south. Just two years after independence, the country fell into a civil war that raged for years and left up to 400,000 dead, a shocking toll in a country of only some 12 million. The South Sudanese people have suffered terribly from the failure of their leaders to forge a peaceful foundation for the new country. Simultaneously, donors should consider commercial levers to make South Sudan’s finances more transparent and accountable to its people, a critical step in halting the country’s tailspin. Reform-minded South Sudanese and outside partners should narrow their focus to those measures that begin to pry open the lid on the country’s oil wealth, ensuring, for starters, that oil revenues are deposited in a single public account. But, for the most part, the new government has slow-rolled or evaded implementation.
The peace deal signed in 2018 could help, as it includes reforms designed to combat corruption and build more accountable public finances. This slush-fund governance is at the heart of South Sudan’s system of winner-take-all politics and helps explain why so much went so wrong so quickly after independence in 2011. Top officials hold the country’s oil riches close, barring scrutiny of spending and allowing rampant misappropriation of funds. South Sudan’s rotten state finances are derailing the young country from its already fraught path to peace and stability after a brutal civil war. Appendix H: Exploration and Production-sharing Agreements for Joint Venture Companies Producing Oil in South Sudan.Appendix G: Structure of Oil-related Fees Paid by South Sudan to Sudan.Appendix F: Outstanding Oil Compensation Debt to Sudan (in Billions of Dollars), 2012-2019.Appendix E: Purchasers of Government Cargoes of Oil.Appendix D: Barrels, Cargoes and Buyers of Oil.Appendix C: Estimated South Sudanese Oil Revenues (in Billions of Dollars), 2011-2020.Appendix B: Where Does South Sudan’s Oil Money Go?.Appendix A: Map of South Sudan’s Oil Infrastructure.Mounting Frustrations and the Search for a Strategy.The Path of a South Sudanese Petrodollar.
Emptied Coffers: Siphoned Off and Pre-sold.