By: Daniel Juol Nhomngek, Kampala, Uganda, MAY/16/2017, SSN;
***South Sudan has oil but does not know the terms of the contract with the Chinese Contractors. From this oil contract, South Sudan’s government made $316 million from oil sales in about seven months in 2016, the UN says and in March 2017, South Sudan was declared to be under threat of famine.
***At least half of the country’s budget is being spent on arms even though a famine has been declared.
***South Sudanese workers who are the owners of the oil are working in worse conditions than slaves: they are paid peanuts, work under worse conditions. Government officials are bribed to award Chinese Masters contracts whose terms they do not know.
***The China National Petroleum Company (CNPC), the biggest investor in South Sudan’s oilfields is the master and the controller of oil resources while South Sudanese are slaves on their land.
***South Sudan’s oil is proving to be one of the trickiest puzzles: it has 7 billion barrels in proven reserves, small compared with African oil giants such as Nigeria but enough, if it was all extracted, to meet the oil needs of the United States for a year.
How South Sudan uses its oil, which accounts for almost all of the country’s income is not clear. But war and corruption rules the oil drilling.
We all fought the war. The main reason we fought the war was to control our resources so that we use them for the development of ourselves and our country. This was the hope every South Sudanese had before independence of South Sudan. This in fact is a well founded hope as South Sudan in actual sense is a large country endowed with a lot of resources.
According to African Economic Outlook, Special Thematic Edition of 2013, South Sudan is a large (619 745 square kilometers) country that is very rich in natural resources, many of which remain to be discovered. It also pointed out that the available natural resources are water, hydro-power, fertile agricultural land (about 90% of which is arable land), gold, diamonds, petroleum (with proven reserves of 7 million barrels), hardwoods, limestone, iron ore, copper, chromium ore, zinc, tungsten, mica and silver.
Furthermore, South Sudan has a lot of wildlife of which protected area of Bandingilo National Park that hosts the second-largest wildlife migration in the world is one of them. Besides, South Sudan is rich in agricultural land, which includes the largest populations of pastoralists in the world.
In spite of the many resources as listed in the above paragraph, South Sudan remains one of the poorest countries in the world because it has not utilized other resources except the oil or petroleum. Hence, this article discusses the management of oil contracts in South Sudan; negative impact such mismanagement has on South Sudanese citizens, corruption embedded in and surrounding oil production and business, mysteries about the oil contract, negative impact the oil production has on citizens.
Above all, disenfranchisement of citizens which made them to become slaves in their own land while Chinese citizens exploiting and killing them by supplying guns to both rebels and the government, which end up being used indiscriminately against innocent citizens. Hence, my discussion will be as explained in this paragraph.
What needs to be noted at the onset of this article is our oil contract is controlled by Chinese and Khartoum. This is because the oil contact which establishes the relationship between South Sudan and China was the one signed between Khartoum and China before independence of South Sudan.
However, since independence, South Sudan has not reviewed the said contract and does not have any intention to review it. The reason for this reluctance is not known.
Nevertheless, it appears that the failure of the Government to demand the contract from China and Khartoum is due to two reasons as explained below:—
First, there is lack of seriousness and political will on the side of the government or if not there must be a dominant group of people within the government who are benefiting from the oil and because of that their desire is to leave things as they are. This is the first possible reason.
Second, the failure of the Government of South Sudan to review the oil contract may be due to the fact that China threatens South Sudan if it insists on reviewing the said oil contract. Otherwise, if that is not the case, then under ordinary circumstances, any Sovereign Country would not allow herself to go into a contract that it has not understood.
In fact, the first action the Government of South Sudan would have taken immediately after independence was to recall all contracts signed by Khartoum in regard to South Sudan oil and other resources in order to review them.
However, that was not done by Juba and it is not clear why Juba decided to continue with the contract signed by Khartoum with China though its terms are not up to date disclosed to the government of South Sudan.
In addition, failure to adhere to the principles of transparency and accountability in oil management in South Sudan has left corruption at oil sector flourishing uncontrollably.
To prove this fact one has to go to Juba city and other towns in South Sudan to see what is going there. For instance, if one goes there with the purpose of proving this point, the first thing he or she notices on the streets of Juba, the capital of South Sudan and other towns is a lot of white Toyota Land Cruisers, V8, Hammers and other expensive cars.
All these cars except for the UN and foreign missions, are bought with oil money and since oil constitutes 98% of country’s income, no much money is left to develop and provide services to the people.
Thus, all services are not available because of corruption which has very much affected oil sector, which is the only source of money in the country. Even this sector generates more than enough money but all is stolen.
What even worries me or complicates or worsens the matters is the lack of knowledge about the debts South Sudan owes to other countries and the World Bank. This is because debt management is poor since there is no transparency and accountability in borrowing and terms of repayment. In other words, debts owed to other countries by South Sudan are not known.
However, the recent International Monetary Fund report for 2016 on the Republic of South Sudan staff under article iv consultation concerning the debt sustainability analysis, economic crisis and continued political instability, it has been found out:
“That the total external debt remained at about US$1 billion through 2016; that by June 2016, debt to the World Bank amounted to US$34 million on IDA terms, while US$100 million had been borrowed from China Exim Bank to reconstruct Juba international airport. That the balance of outstanding oil advances from international oil companies and traders is estimated at US$219 million. Finally, the Bank of South Sudan (BSS) has an outstanding liability to the Qatar National Bank amounting to about US$610 million, originating from short-term credit facilities (guaranteed by the Government of South Sudan) that fell into arrears in 2015”.
In addition, on April 16, 2015 the Eye Radio reported Dr. Lam Akol to have said that the government had accumulated more than ten billion US dollars in foreign debt, which he said is not a secret, although he did not disclose the source of the information (visit: www.eyeradio.org/south-sudan-accumulates-10m-debt-3-years)
It should be noted that since 2008, China and South Sudan have concluded agreements worth about 10 billion USD and the latter through official channels has expressed willingness to have Beijing’s support for projects worth 8 billion USD (visit: africanarguments.org › Home › Politics).
All the money mentioned above are not granted for free but they are debts that must be repaid by the Government of South Sudan with interests. What is even bad is that there is nothing to be shown as a project on which the above money was spent on.
This is because the lenders do not monitor how the money borrowed from them is spent by the government. Hence, all money borrowed end in individuals’ pockets.
It should be observed that it is oil under the ground which is being sold by the present government and by the time it has gone, South Sudan would be left without oil but unpaid debts that will make us slaves to creditors, the ownership of our resources will be taken away by Chinese Masters and others business organizations.
Oil companies have corrupted the system in South Sudan by circumventing rules of procurement through bribes. This enables them to find their way straight to top officials with plans, hence bypassing the law or other arrangements and are awarded contract though they have not qualified under the strict procurement rules. Lack of accountability and transparency hides this serious corruption.
To make the matters worse, some of the South Sudanese technocrats that had returned from Sudan or other countries with knowledge to work in South Sudan’s oil industry have conspired with the Chinese Oil contractors; hence, declining to publish figures like oil output and revenue, which they consider too important to reveal.
We cannot blame China much but our government of South Sudan since it is the one duty-bound to fight for the interest of citizens of South Sudan.
Sadly enough, our government is acting like an imperialist government which only works for private interests. Currently, our government has allowed control over oil to be exercised by Sudan and China, which still have absolute control over oil resources in the country.
As a result, Chinese treat citizens of South Sudan working at oil sector like slaves: they are paid less than wages or salaries given to the Chinese workers or employees though South Sudanese workers or employees may be more qualified than their Chinese counterparts.
In order to remain in control of the oil, China is fueling the war by supplying guns to both rebels and the government, though the supplies to the government is more than to the rebels as the Government is presumed to be in control of the oil.
In order to take control over our oil, the Chinese must be forced to be more transparent.
The country’s rulers are struggling to crush several rebellions using arms from China purposely supplied to keep the war going so that they benefit out of the chaotic domestic politics as the government and oppositions are struggling for power, money, politics and resources and for the government to maintain their dominance over the country resources.
NB// the author is human rights lawyer and can be reached through: firstname.lastname@example.org