South Sudan Faces Deepening Crisis After Oil Pipeline Damage

South Sudan Faces Deepening Crisis After Oil Pipeline Damage

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Juba, South Sudan (TAE)-In a significant blow to South Sudan’s economy and stability, experts are warning of a worsening situation following damage to one of its key oil pipelines last month. The pipeline, critical for transporting South Sudan’s oil to international markets, suffered damage in Sudan’s White Nile state amidst ongoing conflicts, leading to a suspension of loadings by the Dar Petroleum Oil Company.

The incident has placed South Sudan, a nation heavily reliant on oil revenues, at the brink of a severe economic and security crisis. According to Alan Boswell, an expert on South Sudan for the International Crisis Group, the damaged pipeline is responsible for a significant portion of the country’s oil revenues. With oil constituting approximately 90% of South Sudan’s revenue, the impact of this disruption cannot be overstated.

The technical team’s inability to repair the pipeline due to the fighting between Sudan’s paramilitary Rapid Support Forces and the Sudanese army compounds the problem. This impasse threatens to collapse South Sudan’s political economy, given the pivotal role of oil revenues in the nation’s budget.

Corruption and mismanagement further exacerbate the issue, with little of the oil proceeds reaching the national budget. A substantial portion of the production is claimed by oil companies or goes towards settling debts with Sudan, leaving the grassroots population largely unaffected by the oil wealth.

Daniel Akech Thiong, a South Sudanese political economist, highlighted the disconnection of the oil wealth from the daily lives of the populace, who have been grappling with soaring inflation and the government’s failure to pay civil servants.

The potential cessation of oil revenue flows poses not only an economic threat but also a risk of increasing violence and lawlessness. With a significant portion of the population already facing extreme levels of hunger, the situation could push more individuals towards armed violence, destabilizing the region further.

In the face of this crisis, South Sudan has historically sought bailouts, notably in 2012 when a halt in oil production led to the country accruing loans under dubious conditions. With current exports affected, there is speculation that President Salva Kiir may seek new loans, possibly from the United Arab Emirates (UAE), to sustain his inner circle. However, such measures are seen as short-term fixes that do not address the underlying issues of corruption, mismanagement, and reliance on oil revenues.

Experts like Edmund Yakani, a South Sudanese peace activist, warn that the lack of oil revenue could lead to political instability, a spike in crimes, and human rights violations, underlining the critical importance of oil to South Sudan’s survival.

The international community watches closely as South Sudan navigates this crisis, with potential implications for regional stability and the broader geopolitical landscape in Africa.

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