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Preventing Renewed War in South Sudan
Preventing Renewed War in South Sudan
South Sudan’s oil sector needs to become more transparent
South Sudan’s oil sector needs to become more transparent
Troops of the South Sudanese army (SPLA) wait for the arrival of members of the Ceasefire and Transitional Security Arrangements Monitoring Mechanism (CTSAMM) at the Pillbam military base in Juba, 16 April 2016. AFP/Albert Gonzalez Farran
Statement / Africa

Preventing Renewed War in South Sudan

The honeymoon period is now over for the Agreement on the Resolution of the Conflict in South Sudan, which formally ended the civil war in August 2015. Its guarantors need to act urgently in the next days to save it and prevent the country from returning to full-scale combat.

The agreement successfully enabled the return of Riek Machar, leader of the Sudan People’s Liberation Army-In Opposition (SPLA-IO), to Juba and the subsequent formation of the Transitional Government of National Unity in April. However, the formerly warring parties are now flouting it and increasingly preparing for widespread conflict. Implementation is stalled and fighting is already proliferating around the country. Unless something is done, it is a matter of only a little time before there is a return to war, and the agreement collapses.

For the moment, the permanent ceasefire, though increasingly strained, continues to hold in the civil war’s major conflict theatre. From the perspective of many in Salva Kiir’s wartime government, it applies only to the Greater Upper Nile region, therefore the proliferation of conflicts in Greater Equatoria and Bahr el Ghazal, such as the recent deadly clashes in Wau, does not affect their commitment to the peace agreement. However, the increasing number of discrete conflicts in other regions could trigger renewed fighting in Greater Upper Nile or Juba and lead to a far more explosive return to a broad civil conflict. 

While the SPLA-IO in Greater Upper Nile is not as strong as it was in early 2014, when many army divisions split and soldiers defected to the rebels, its presence in Juba and recruitment of forces and allies in Greater Equatoria place the capital under a renewed threat, particularly its civilians, who are at risk of ethnically-targeted violence.

In the nine months that the ceasefire has been observed, forces have simply paused hostilities while remaining in close proximity: there has been no joint security oversight or move toward unification or demobilisation. This would be an untenable status quo even if there were political progress, which there is not.

Renewed conflict would be devastating for South Sudan. It could also quickly lead to the regional contagion experienced in 2014, when the Ugandan military intervened in favour of Juba, and Sudan supported the SPLA-IO – and could reverse the nascent rapprochement between Uganda and Sudan. The risk of regional war motivated the mediation efforts of the Intergovernmental Authority on Development (IGAD). It, as well as other international actors, put enormous pressure on Kiir and Machar to sign the peace agreement and establish the transitional government. The collapse of the agreement could have serious implications for the regional stability that IGAD’s Heads of State worked hard to protect.

At the African Union summit in Kigali within two weeks, IGAD has a chance to prevent a return to full-scale war. The Heads of State should consider the points of dispute and give the parties clear directives to salvage the agreement and prevent war. This should include:

  • using IGAD’s authority, as the agreement’s guarantors, to re-affirm the warring parties’ commitment to the ceasefire and rejection of further violence;
  • asserting that IGAD member states are fully aware of the deterioration of the political situation and prepared to expend resources on mediation and diplomacy with key actors;
  • maintaining that IGAD member states are committed to the peace deal and will act through IGAD to secure regional stability if violence breaks out again; and
  • directing the parties to act on key tenets of the agreement and IGAD resolutions, including IGAD’s directions for a detailed plan on cantonment of forces and clarification of the terms of reference for the committee to resolve outstanding issues related to the government’s expansion of the number of South Sudan states from 10 to 28.

Against the odds, the IGAD Heads of State came together last year and in effect forced an agreement on the parties. Their current lack of focus on peace implementation allows the parties to prevaricate and avoid implementing aspects they do not like. If the Heads of State do not take decisions that reflect the seriousness of the situation and follow up with action, their two years’ peacemaking work could amount to little.

Op-Ed / Africa

South Sudan’s oil sector needs to become more transparent

Originally published in The African Report.

South Sudan’s fortunes have always been tied to its oil. The discovery of oil in the late 1970s deepened tensions between the South Sudanese and the regime in Khartoum and fueled violence after the outbreak of Africa’s longest-running civil war as both sides vied to control the region’s oil fields.

Oil then laid the groundwork for South Sudan’s secession. A landmark 2005 peace deal granted Juba half of the South’s oil revenues, pumping billions into the new semi-autonomous government.

But the sudden wealth gravely compromised the country’s stability. By 2013, only two years after independence, the elite scramble for South Sudan’s oil riches helped trigger a fresh war that may have killed 400,000 people while displacing millions.

Nowadays, despite a 2018 peace agreement and a government of national unity, Juba’s monopoly on oil revenue obstructs a broader political settlement the country desperately needs.

South Sudan’s leaders siphon off the bulk of the petrodollars, leaving much of the population starved of basic services and, in some parts of the country, on the brink of famine.

Pervasive corruption has become a huge source of frustration for donors, including the US, which allocates a billion dollars a year primarily to sustain humanitarian relief. South Sudan produces roughly 150,000 to 170,000 barrels a day. But because of the share owed to oil companies and fees paid to Sudan, it earns income from 45,000 barrels at most, according to the best estimates available. Little of that income reaches the national budget due to off-budget expenditures, undisclosed debt payments, and allocations to its opaque state oil company Nile Petroleum.

Those who still support South Sudan cannot ignore its rotten finances. Since oil underwrites the entire South Sudanese state, addressing the country’s deep troubles is impossible without a focus on its vanishing petrodollars. A first step in this direction is making the oil economy more transparent, not only in South Sudan, but also in Europe, host to many of the country’s commercial financiers.

Oil fuels tensions

Despite staggering poverty and underdevelopment, South Sudan qualified as a middle-income country at its birth thanks to its oil wealth. But instead of serving as a foundation for state-building, oil poisoned South Sudan’s politics. Before independence, rebel commanders enriched themselves through a mix of taxation, aid diversion, artisanal gold mining, deforestation, and outright looting. This culture of illicit self-dealing quickly came to resemble a free-for-all when the 2005 peace agreement unlocked billions of petrodollars.

After independence, oil money papered over the South’s ethno-political divisions until President Salva Kiir moved to consolidate power, tightening his grip on oil funds in the process. Only two years after secession, a leadership struggle between Kiir and internal challengers, led by his main opponent Riek Machar, burst into a civil war that drained state coffers, with oil production decreasing because of the conflict.

To stay afloat, South Sudan turned to a handful of commodity traders to purchase future deliveries of oil, including Swiss-Singaporean Trafigura, which bought South Sudan’s oil through secretive pre-payment arrangements. These high-interest cash advances worked like the petrostate equivalent of a payday loan scheme, piling up debt while hiding South Sudan’s finances ever further from sight.

Back to the books

South Sudan’s future would appear less bleak if the countries that foot the bill to alleviate the country’s humanitarian disaster focused on making sure Juba accounts for its oil revenue.

Donors should make a concerted effort to push Juba to comply with existing laws and provisions in the 2018 peace agreement to ensure that oil proceeds are paid into a single public oil revenue account. One source of leverage is through the IMF, which has given South Sudan $550m in the past year but with few strings attached. The IMF should condition future disbursements on the exclusive use of the public oil account.

Outside pressure on Juba should be supplemented with pressure on South Sudan’s financiers. European governments should urge trading companies with a strong corporate presence in Europe to disclose their payments to South Sudan and demand the funds be deposited into the official oil account.

They should also consider drafting regulations requiring commodity firms under their jurisdiction to certify compliance with South Sudan’s law. This could work. Following engagement by the UN Panel of Experts on South Sudan, Glencore has disclosed purchasing $950m of South Sudanese oil since 2018. Additional leverage could come from widening the regulatory net to the commodity firms’ insurers and bankers, many of which are also in Europe.

Declining output and global decarbonisation mean that South Sudan will not be in the oil business forever, and given the trouble it has caused there, the transition may provide as much opportunity as risk. Still, bringing the oil money back onto the books of the national budget could at least give the South Sudanese a chance to reset their bloody politics now, not when the oil pumps stop.