JUBA – The International Crisis Group (ICG) has said in a report released on Wednesday that the government of South Sudan under President Salva Kiir Mayardit’s tight grip on oil revenues is hampering efforts to effect reforms provided for in the revitalized peace agreement and also blocking external scrutiny.
“South Sudan’s rulers keep a tight grip on its oil wealth, blocking outside scrutiny and obstructing reforms urgently needed to ease both popular hardships and political tensions. Along with International Monetary Fund support, a peace deal has kickstarted new efforts to fix the country’s broken finances,” the ICG said in the ‘Oil or Nothing: Dealing with South Sudan’s Bleeding Finances‘.
The report said President Salva Kiir Mayardit’s rivals will have no incentives to wage rebellions “If President Salva Kiir’s government begins to clean up the country’s budget, as it has pledged to do.”
“This largesse abruptly ended as President Kiir moved to consolidate power after independence, sidelining his rivals and firming up his grip on the oil economy. The result was to fracture the country into warring ethno-political camps that continue to be a source of instability despite the formation of a unity government in 2020,” the report said.
“As South Sudan struggles to recover from civil war, its broken state finances are receiving renewed attention. During the war, Kiir mortgaged future oil exports for advance loans from a small group of commodity traders and commercial banks, piling up debt while hiding the country’s finances ever further from sight. Meanwhile, his loyalists diverted large portions of state revenue from the official budget, which is so leeched that the government routinely fails to pay salaries. The result is a cash-strapped state and a deeply aggrieved population with little confidence in its leaders, amplifying political and ethnic animosities.
“Stabilising the country appears impossible without fixing its economy. South Sudan is a divided and fragile state that requires fairer power sharing in the centre and a devolution of authority outside Juba, but the parties cannot reach such a political settlement until they are adequately accounting for and sharing the oil funds. Frustrations are also boiling over among donors, who increasingly believe that their huge sums of humanitarian aid are sustaining a kleptocratic elite.”