If one wants to get a sense of the challenges and the opportunities facing South Sudan, the world’s newest country, take a ride down the 190-kilometer (120-mile) Juba- Nimule Road.
The route is one of the country’s most heavily traveled, connecting the capital with a dusty border town that serves as a gateway into and out of Uganda. But it is unpaved and years of civil war had left it strewn with mines that had to be removed by a Swiss company. Today, it takes eight hours to make the journey.
Potential to make money in South Sudan is ‘enormous’
South Sudan becomes the 193rd UN member state
Louis Berger Group, an American company, is now paving the road for the first time ever, thanks to funding from USAID. When the $225 million project is complete in 2012, travel time will be a mere two hours. The new route could cut the cost of delivering goods and encourage new businesses to develop to serve travelers and take advantage of easy transportation.
Less than two weeks old, South Sudan is one of the world’s least
developed countries and still suffering the aftershocks of a long civil
war with Sudan. But as a new country hopeful about its prospects, home
to considerable oil reserves and, for now at least, enjoying the
attention of the world’s aid community, South Sudan also spells an
enormous opportunity for contractors.
“All of South Sudan has about 50 kilometers of paved roads. That shows
the lack of infrastructure. Electricity, water supply, communications,
roads all need to be built. That creates opportunities for companies,”
Petrus de Kock, a researcher at South African Institute of International
Affairs, told The Media Line.
A country the size of France, South Sudan has just 4,000 kilometers of
roads compared with one million for France. Its rail system consists of
250 kilometers of a single narrow-gauge track. Just 15% of the
population has a telephone and almost 40% has to walk a half an hour or
more to get drinking water. Schools would be crowded at 129 pupils per
classroom, but only about a third of its eight million people have ever
Moreover, the war that officially ended in 2005 is still simmering as
the two sides contend for disputed territory and over how to split the
proceeds of the petroleum that is now on the South Sudan side of the new
international border. Fighting in the disputed, oil-rich Southern
Kordofan state has forced more than 73,000 people to flee their homes
since June 5, according to the United Nations.
But South Sudan produces about 375,000 barrels of oil per day, making it
among Africa’s biggest oil patches and generating considerable revenues
for the government as it tries to build the country almost from
scratch. It also means that the country is strategically significant,
enabling it to keep the attentions of resource-hungry China. Sudan was
China’s sixth-largest source of oil imports in 2010.
The infant state’s fertile White Nile valley includes some of the
richest agricultural land in Africa. Large wildlife herds could be
exploited to attract eco-tourists. Furthermore, the White Nile has
sufficient flow to generate large quantities of hydroelectricity.
All that holds out promise for the future, but South Sudan is also attracting foreign aid – which it needs.
Oil brought earned some $1.5 billion in revenue last year for South
Sudan, noted a report issued last week by the Save the Children
non-governmental organization (NGO). The World Bank estimates that
developing a comprehensive road system will cost over $7 billion, and
that electrification of the country will be as much as $13 billion.
“South Sudan’s resource needs are massive and cannot be met by oil revenues alone,” Save the Children said.
The international aid largess is substantial. Fourteen international
donors disbursed $188 million dollars in 2010 and as of July this year
had made available some $440 million out of $548 million promised, about
half going to infrastructure projects such as construction of a liquid
waste treatment plant, 25 new school buildings and 513 kilometers of new
According to the US Central Intelligence Agency, South Sudan has received more than $4 billion in foreign aid since 2005.
With the money from aid and oil flowing in, South Sudan’s capital of
Juba has turned into a boomtown. It population has more than doubled in
the past six years to approximately 375,000, swelled by refugees as well
as by opportunity.
Businesses have come as well, mainly from neighboring African countries
such Uganda, Ethiopia and Sudan itself. China National Overseas
Engineering Corporation is also active. Others are looking to join.
Besides roads and schools, other opportunities for business include
helping foreign oil companies move their facilities from Sudan to South
Sudan and building a new capital.
“The country has to be built from scratch, that's why we must seize
opportunity and find our place in South Sudan's economy as soon as
possible, with far-reaching intentions," Russian President Dmitry
Medvedev's special envoy to Africa, Mikhail Margelov, said last week.
Besides continued violence, the big challenge facing South Sudan will be
managing all the aid money and the private sector organizations that
are now tripping over themselves to fund and manage projects, said de
Kock of South Africa.
For instance in education, there are no uniform rules and
non-governmental organizations (NGOs) teach curricula based on varying
standards. South Sudan doesn’t have laws governing public financial
management procurements or auditing, noted the Save the Children report.
There is a big risk that money will be squandered or stolen.
“There is a bit of chaos right now. A huge complaint in South Sudan is
corruption. There aren’t any set out procedures -- if you want to
provide a service to the government, or bid for contract from
government, this is how you do it,” said de Kock “This has to be