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 For West Ukraine City, Conflict Far Away Yet Near

Physically and culturally close to Western Europe, Lviv feels solidarity with compatriots in country’s east but says they need to decide own future More

West African Women Disproportionately Affected by Ebola

Women's roles in families and the community put them at greater risk for contracting the disease, officials say More

Video NASA's MAVEN Spacecraft Arrives at Mars

Mars Atmosphere and Volatile Evolution craft will measure rates at which gases escape Martian atmosphere into space 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.
NASA’s MAVEN Probe Enters Mars Orbiti
X
September 22, 2014 9:20 PM
NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video NASA’s MAVEN Probe Enters Mars Orbit

NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video For West Ukraine City, Conflict Far Away Yet Near

The western Ukrainian city of Lviv prides itself on being both physically and culturally close to Western Europe. The Russian-backed separatists in the eastern part of the country are 1,200 kilometers away, and seemingly even farther away in their world view. Still, as VOA’s Al Pessin reports, the war is having an impact in Lviv.
Video

Video Saving Global Fish Stocks Starts in the Kitchen

With an estimated 90 percent of the world’s larger fish populations having already vanished, a growing number of people in the seafood industry are embracing the concept of sustainable fishing and farming practices. One American marine biologist turned restaurateur in Thailand is spreading the word among fellow chefs and customers. VOA Correspondent Steve Herman reports from Bangkok.
Video

Video Chinese Admiral Key in China’s Promotion of Sea Links

China’s President last week wrapped up landmark visits to India, Sri Lanka and Maldives, part of a broader campaign to promote a new “Maritime Silk Road” in Asia. The Chinese government’s promotion efforts rely heavily on the country’s best-known sailor, a 15th century eunuch named Zheng He. VOA's Bill Ide reports from the sailor’s hometown in Yunnan on the effort to promote China’s future by recalling its past.
Video

Video Experts Fear Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid