Developing off the back of one natural resource is risky for any country. It makes them reliant on external conditions beyond their control, such as global demand and supply. Since June 2014, global oil prices have fallen by more than 70%. Consumers are happy. Oil producing nations are not.
South Sudan’s accession to the East African Community could prove a major step forward in the economic development of the world’s newest nation.
On March 2, the East African Community Heads of State Summit admitted South Sudan as its newest member. Accession negotiations had commenced in November 2014. The relatively accelerated timeline to its conclusion is a strong indication of the willingness of all sides to admit South Sudan to the community.
Sudan on Sunday threatened to put on hold nine security and economic pacts with South Sudan, including one on vital oil shipments, if its neighbour continues its alleged support for rebel groups.
Sudan’s President Umar al-Bashir over the weekend accused his neighbour of arming the rebel Sudan People’s Liberation Movement-North group in his territory and ordered the closure of pipelines carrying oil from the landlocked South through his country to Port Sudan on the Red Sea – currently the South’s only export route.
Former civil war foes Sudan and South Sudan on Tuesday agreed to restart joint crude oil exports with the next three weeks, reported Reuters, after production had abruptly been shut more than a year ago over a bitter dispute regarding pipeline fees.
The South Sudanese government is looking at two possible routes to export oil, if its existing conflict with neighbours Sudan fail to reach an amicable solution, said its Petroleum Minister Stephen Dhieu Dau on Thursday, according to United Press International.
Sudan will block any attempt made by South Sudan to export oil to Israel via Sudanese territory, said a member of the ruling National Congress Party’s (NCP) on Wednesday, criticising Juba for compromising ongoing peace talks between the two neighbours, by signing independent contracts prematurely.
The presidents of neighbouring Sudan and South Sudan have agreed to set up a demilitarised zone along their disputed border region “without further delay,” reported Reuters on Sunday, in a deal that may open the way for the two countries to resume oil exports since production was shut down last January.
The government of South Sudan has offered to pay $3.2 billion to their Sudanese counterparts in order to resolve an ongoing conflict over oil revenues following their split last year.
On Monday, Reuters reported that South Sudanese authorities willing to assist their neighbours in plugging up their gaping budget deficit, after three-quarters of its oil production was lost following South Sudan’s independence.
China should take a more proactive role to resolve the Sudan-South Sudan crisis, said South Sudan’s chief negotiator Pagan Amum on Tuesday, who criticised the Chinese government for being “too cautious” in balancing its diplomatic relations with both countries.
South Sudan has rejected a proposal by the African Union to pay its neighbours Sudan $6.5 billion for oil transit fees, reported the Financial Times on Tuesday, with the two nations still locked in a stalemate over shared oil revenues since separating on 9 July 2011.
“We could not sign; they (Sudan) were stealing the oil and obstructing the flow of our oil, and this robbery continues up to today,” said South Sudan’s chief negotiator Pagan Amum, while questioning the African Union’s (AU) motives in participating with the cross-border talks.
