South Sudan’s revenue has seen a significant decline due to the disruption of a crucial pipeline essential for the export of crude oil to international markets.
South Sudan’s Finance Minister, Ouw Daniel Chuang, informed journalists in Juba on Thursday that oil flows from several key fields have ceased, passing through the damaged pipeline located at the country’s northern border towards war-torn Sudan.
Chuang stated, “We are aware that the situation has worsened due to the crisis in Sudan. As you all know, South Sudan’s revenue is 90% or more dependent on oil, which is no longer flowing from some of the country’s vitally important fields.”
He added that he had sought financial assistance abroad, without specifying the country visited, explaining, “We have already started working with the Central Bank of Sudan to pay at least one month’s wages.”
South Sudan’s ability to sell its oil has also been pressured by increasing security unrest in the Red Sea, where Houthi militants have attacked ships.
However, the primary cause of the export halt is the damaged pipeline, first noticed after the discovery of its damage on February 10, when the crude oil flow was disrupted.
Jok Madut Jok, the head of the Sudd Institute, a research center based in Juba, commented that this means the fragile state is entirely unable to pay most of its government employees, many of whom have not received their salaries for six months.
The revenue decline not only increases the likelihood of South Sudan’s military intervention in the ongoing civil war in Sudan to repair its damaged infrastructure but also threatens to destabilize President Salva Kiir’s regime if it fails to pay military wages, according to Andrew Smith, a senior Africa analyst at risk consultancy Verisk Maplecroft, in a research note this week.
