ECONOMY OF SOUTH SUDAN


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.


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 Equatoria. 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 (peanuts), sorghum, millet, wheat, gum arabic, sugarcane, cassava (tapioca), mangos, papaya, bananas, sweet potatoes, and sesame.

Oil
Prior to independence, South Sudan produced 85% of Sudanese 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 Kenyan 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.

Wikipedia