Oil shortfall hits rebuilding in South Sudan

Lower than expected oil exports this year have left the government of South Sudan struggling to find cash for urgently needed infrastructure development following years of conflict, officials said.

More than 95 percent of the semi-autonomous region’s income comes from oil revenues, which finance ministry figures showed fell from $76 million in January to $28.9 million in March. Revenues are now rising, with $125 million expected in July.
“The problem is that the oil revenues we were expecting (this year) have not arrived as expected, based on the budget line,” the south’s Finance Minister Kuol Athian told Reuters.

“There was a drop but now it is rising,” he added.

Sudan’s oil wealth is shared under a January 2005 peace deal that created the southern government and gives the region the right to vote on secession from the north by 2011.

A World Bank-led report obtained by Reuters blamed the sharp fall in exports in part on problems finding a market for Sudan’s new acidic Dar blend crude, which was discounted early in 2007.

Athian told Reuters the south was seeking other income sources to temper its reliance on oil, with the government establishing an account to collect 50 percent of cash generated from customs, immigration and taxes in the south.

Reuters