Page 15 - NILE EXPLORER

COVER STORY

South Sudan:

The pandemic & the oil economy

Cover picture: An oil rig

n March, immediately after the 2020 South Sudan policymakers must start The oil and gas bidding round,
Ipeace deal, South Sudan’s Ministry of to think about the exit strategy from comprising 14 oil blocks in the northern
Petroleum announced the suspension of COVID-19. oil fields, was intended as a means to
the country’s oil and gas licensing round According to World Bank, a sustained accelerate economic recovery, which can
– which was due to take place in March downturn in oil prices would have only be achieved through international
– this is as focus across the globe shifted negative consequences for South Sudan’s oil investments in the country’s oil and
to the containment of the Covid-19 economy. While lower sulfur cap gas sector.
outbreak. regulations for global maritime shipping “Right now, we were in the middle
fuels could push South Sudan oil into
Although South Sudan has not been of preparing for the first oil and gas
heavily affected by the outbreak, premium category, the COVID-19 licensing round. It was actually planned
the containment measures being pandemic is expected to contribute to to be here by March but because of the
undertaken, both internally and globally lower oil demand and prices, which coronavirus we could not even move.
will like anywhere else, have adverse could decline by 14.9 percent during We are going to defer it a bit, but the
effect on the economy, already battered FY20 and 17.8 percent in FY21, resulting plans are still there for us to attract new
by years of conflict. in significantly lower GDP growth rates investors to South Sudan, specially from
in FY20 (4.3 percent) and FY21 (-5.3 the Western world,” Under secretary in
Once the containment and mitigating percent). In addition, South Sudan’s the Ministry of Petroleum, Awow Daniel
measures are lifted, economic policies agricultural sector is at risk of desert Chuang, said.
should be shift towards building future locust infestation which has ravaged
resilience, particularly a pathway and the Horn of Africa, threatening food This would have been historic and a major
vision that sees the country beyond oil security and livelihoods. The only hope milestone for South Sudan, a county that
and gas. The economy will need to be is that the country may be speared the is economically dependent on oil, which
designed to achieve sustainable growth locust invasion, if the effort to deal with is the lifeline of the economy now and
through diversification and inclusion. the insects succeed. over the medium term. It accounts for

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