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

Myanmar Fighting Poses Dilemma for China

To gain some insight into conflict, VOA’s Steve Herman spoke with Min Zaw Oo, director of ceasefire negotiation and implementation at Myanmar Peace Center More

Australia Concerned Over Islamic State 'Brides'

Canberra believes there are between 30 and 40 Australian women who have taken part in terror attacks or are supporting the Islamic State terror network More

Recreational Marijuana Use Now Legal in Washington, DC

Law allows adults 21 and over to privately possess and smoke 0.05 kilogram of pot, and to grow small amounts of the plant 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.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More