/ 11 July 2024

No oil, no food: Damaged pipeline piles misery on South Sudan

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South Sudan was in crisis before the pipeline shutdown sent shockwaves through its economy. (KARUMBA/AFP via Getty Images)

At 75, Galiche Buwa has lived through civil wars, famine and natural disasters, but the South Sudanese widowed mother of four always managed to get by, thanks to her grocery business.

Now that standby is on shaky ground as the oil-dependent nation’s economy reels from revenue losses following the rupture of a key pipeline in its war-torn neighbour, Sudan, in February.

The damaged pipeline was crucial for transporting South Sudan’s crude oil abroad, with petroleum exports usually accounting for about 90% of the impoverished country’s GDP.

The implications have been far-reaching, with inflation soaring as the value of the South Sudanese pound (SDG) relative to the US dollar plunges on the black market, from SDG2  100 in March to SDG3 100 today.

The official rate slipped from about SDG1  100 in February to nearly SDG1  550 this month.

“Since the 1970s up to now I am still here, but these days we are suffering. Things are tough,” Buwa said as she tended to her stall at the Konyo-Konyo market in the capital, Juba.

“We are unable to buy stock, things are expensive … and prices keep rising every day,” she said, compelling her to purchase supplies on credit.

As wholesale costs shoot up, retail prices follow — a mug of maize sold by Buwa was worth SDG800 in March, compared to SDG2  000 today, she said.

Teddy Aweye said she was struggling to put food on the table, forcing her family to eat just one meal a day.

“You go to the market today, you get a price, and tomorrow you go back and you get a different price. I had to return home without buying anything,” Aweye said. “Life is really very difficult.”

It is a common refrain across Juba’s biggest market, where several traders said they were racking up losses every day.

Abdulwahab Okwak said his butchery was in crisis. 

“A customer who used to buy one kilo is now taking half a kilo, and the one taking half a kilo now takes a quarter … and the one who was taking a quarter is not coming anymore,” he said. 

The father of eight often loses money when he is unable to sell meat before it spoils. Many of his fellow butchers have quit, unable to make ends meet.

Harriet Gune said her fashion boutique was losing customers. 

“The more you increase prices for the items in the shop, the more you scare away clients,” she said.

A pair of jeans that cost SDG25  000 in March now sells for SDG35  000, she said, adding that she needed to raise prices “to be able to get enough money to order new stock”.

Even government officials are feeling the pinch. In May, Finance Minister Awow Daniel Chuang told parliament that the government would struggle to pay salaries to MPs, the military, police, civil servants and other officials because of a shortfall in revenue. He said the country was losing about 70% of its oil revenues because of the pipeline rupture, which has affected exports of Nile blend crude and Dar blend crude.

“The production is only from blocks 12, 14, and 58, which means there is only about 30 to 35 percent of the oil that is flowing,” he said.

South Sudan was in crisis before the pipeline shutdown sent shock waves through its economy, with fears that long-anticipated elections, scheduled for December, will be delayed.

In addition to corruption draining its coffers — with the ruling elite routinely accused of plunder — the country is vulnerable to currency shocks, because it imports nearly everything, including agricultural produce.

Fighting in Sudan between the army and the paramilitary Rapid Support Forces since April 2023 has exacerbated the situation.

The conflict has killed tens of thousands of people, forced millions to flee — including more than 700  000 to South Sudan — and pushed Sudan to the brink of famine.

Economist and government adviser Abraham Maliet Mamer said South Sudan, which declared independence from Sudan in 2011, needed to plan ahead to secure its future.

“Our country is suffering. We have less money, we have fewer services, and our security is a problem,” he said, urging the government to build refineries and pipelines through other nations.

“Sudan will never be the same again. Until we develop alternatives we will be having issues,” he warned. — AFP