News / Africa

South Sudan Businesses Fear Oil Shutdown Fallout

South Sudanese express their support as President Salva Kiir declared a halt on all oil operations in South Sudan, in Juba, January 23, 2012.
South Sudanese express their support as President Salva Kiir declared a halt on all oil operations in South Sudan, in Juba, January 23, 2012.

When South Sudan decided to shut down its oil production to protest against alleged injustices from the north, the country was also cutting off 98 percent of its revenue.  Businessmen in the south are particularly concerned about the economic consequences of the shutdown.

Mustafa Ayoo runs a small hardware store at the Jebel market on the outskirts of the capital. Like many other business owners here, he has been closely following news of the oil shutdown, a two-week process begun late last month which should be nearing completion.

“Well, I'm concerned for sure, because it's like even foreign exchange is going to be a problem," said Ayoo. "Because mostly here the things we sell are coming from another country - mostly from Uganda and Kenya.  Here I'm sure it's going to affect my business.”

Ayoo says he typically buys his materials using U.S. dollars. But the dollar and other foreign currencies that had been brought into the country through the oil trade are getting harder to find since the shutdown.

South Sudan's central bank, trying to conserve dollar reserves, has ordered that wire transfers to Kenya and Uganda be conducted using only the South Sudanese pound.

Michael Toma, originally from Uganda, has been selling household goods at the Jebel market for the past year.

“Yeah, I'm so concerned in that I believe it's already has impact as of now. Though we are worried if the impacts are going to be a long term impact definitely we the common man will have to suffer," said Toma. "But however, I overheard the president say 'it's for the better' and in hearing what he said I have reason to believe that he was right in ordering the shutdown of the oil. It's affecting us, right, but we believe its a better decision for the future.”

North-South Sudan oil pipeline
North-South Sudan oil pipeline

South Sudan depends on northern pipelines to send its oil to international markets. The south cut off its oil trade with the north after accusing Sudan of stealing $815 million worth of oil. Khartoum says it took the oil to compensate for unpaid transit fees.

An African Union panel led by former South African President Thabo Mbeki put forward a proposal to settle the dispute in which South Sudan would pay the north some $5 billion over the next five years to make up for the lost revenue.

South Sudan rejected the proposal. Toma says he supports that decision.

“I believe in that, because given the provisions that were drafted by the AU and trying to peruse through them I have the feeling that South Sudan as a nation was being cheated," said Toma. "Its sovereignty was being tampered with and it was being reduced [from] an independent country to a dependent country.”

South Sudan also faces enormous development challenges. The United Nations estimates that only a quarter of the population is literate and about the same percentage has access to health care.

Some traders, like Dayo King, think the nation may still be too fragile to sacrifice so much of its economy.

“This is still a country that has just begun, in fact was trying to do development just from the start, so if there's no oil maybe when the oil even stops maybe like one week it affects people terribly," King said.

Others like Simon Gatdier Yieh support South Sudan at all costs.  Having witnessed years of war, Yieh says the south, as an independent nation, is in the right to stand up to Khartoum.

“The people of the Arab side like Omar al-Bashir they've not forgotten the war; it's not good," said Yieh. "So we're very happy for our president to shutdown the oil because oil belongs to the south. It does not belong to the north.

The government of South Sudan is preparing to announce austerity measures to reduce spending in order to make up for the economic shortfall.

But with so many people in the country lacking basic services, and many others kept alive through emergency humanitarian interventions, any significant cuts could be painful.

You May Like

Video China Investigates Powerful Former Security Chief

Analysts say move by President Xi is an effort to win more party support, take step toward economic reforms, removing those who would stand in way of change More

South Africa Land Reforms Still Contentious 20 Years Later

Activists argue that the pace of land reform is slow and biased; legal experts question how some proposed reforms would be implemented More

In Vietnam, Religious Freedoms Violated, UN Finds

Beliefs reportedly prompt heavy surveillance, intimidation and travel restrictions More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Gazans in Shelled School Sought Shelteri
X
Scott Bobb
July 30, 2014 8:16 PM
Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video A Summer Camp for All the World

VIDEO: During workshops and social gatherings, the Global Youth Village summer camp encourages young people to cooperate and embrace their differences, while learning to communicate with people from other countries. VOA's Deborah Block has more.
Video

Video From Cantankerous Warlock to Incorruptible Priest, 'Harry Potter' Actor Embraces Diverse Roles

He’s perhaps best known as Mad Eye Moody, the whimsical wizard in the Harry Potter franchise. But character actor Brendan Gleeson's resume includes dozens of films, and he embraces all the characters he inhabits with equal passion. In an interview with VOA’s Penelope Poulou, Gleeson discussed his new drama "Calvary" and his secret to success.

AppleAndroid