South Sudan enters resource-curse club
Natural resource revenues have played a key role in the conflicts that have plagued resource-rich African countries over the past three decades. In Angola, Chad, Democratic Republic of Congo (DRC), Liberia, Mozambique and Sierra Leone, the story is all too familiar.
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Discover hidden resource wealth and descend into stellar amounts of robbery from the land and people or into conflict, paradoxically turning resource assets into resource liabilities. Nigeria is no exception.
In 1995, it hanged one of its own illustrious sons, Ken Saro Wiwa, in his quest for equity in the oil-rich Niger Delta. Increased oil thefts through illegal tapping, internal strife and extravagant public spending have been the new ways and means to dissipate vast oil revenues.
Resource curse
Equatorial Guinea is cited by experts as a textbook case of the resource curse. The luxury acquisitions of property by Equatorial Guinea’s first family and the loot of Gabon’s first family are unrivaled. For these countries, rather than use the resource revenues to finance development, build physical infrastructure, invest in skills building and education, reduce maternal and infant mortality and make in-roads into poverty, much of the resource revenues are squandered.
What is not lost through conflict is often squirreled away through massive corruption, wasteful public spending, theft and illicit financial flows into foreign bank accounts. Ghana and Zambia, with their long history of gold and copper mining, have averted war. Yet, bad resource governance has been their lot. Is the youngest African country and an oil-rich one, South Sudan, setting itself up to join the resource-curse club?
Expectations and war
After fighting its northern neighbour, Sudan, for over a decade, South Sudan gained independence in 2011 and, with its oil wealth, held the prospects of a brighter future.
There were enormous expectations to establish institutions, rules and norms for governing. And through lesson learning, South Sudan was expected to beat the risks and avoid the pitfalls of other resource-rich African countries to accelerate reconstruction and service delivery to citizens. But it has not lived up to the expectations. The wheels of hope have come off.
South Sudan is on the precipice of an implosion into full-scale civil war. And just like other resource-rich African countries, the crisis is born out of identity struggles between dominant ethnic groups—the Dinkas led by President Kirr and the Nuers led by Macher (the sacked Vice- President), both men on the precipice of another bloody contest for state power and control of the oil wealth.
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The losers
Like the others and as in Rwanda, conflict means rampant cyclical ethnic massacres. South Sudan’s oil-producing states of Warap, Unity, and Upper Nile may be caught in the conflict with ominous consequences. Outside of the capital, Juba, the oilfields located largely in the Dinka and Shilluk/Anwak ethnic areas are likely to be the theatre of war and there is the risk of the destruction of huge capital investments.
Citizens who have endured years of war and may be dreaming of resettling into some semblance of normality will be displaced and yet again suffer the wrath of war. Massacred, displaced or maimed, they will pay the highest price in their land of oil wealth with misery and tears.
The winners
There are three likely beneficiaries of this conflict. Khartoum has an eye on the disputed Abyei oilfields that straddle both Sudan and South Sudan. Khartoum will most likely intensify its destructive behaviour, unsanctioned by the Africa Union, having bombed South Sudan repeatedly since 2011 in the northern states of Unity and Upper Nile.
Khartoum may capitalise on the internal ethnic conflict and further undermine the already fragile agreement with Juba. The internal warlords will seize the opportunity to capture oilfields and divert oil revenues to finance war. And global arm dealers will happily supply the weapons for destruction in exchange for future sales of oil or future exploitation of rights, not unthinkably in the shadows of the giant oil companies.
It was so in Congo-Brazzaville,
Angola, Chad, Sierra Leone, Liberia and DRC where resource revenues perpetuated wars.
The trouble with oil revenues
Only three years after emerging from the throes of war with Sudan, South Sudan has only confirmed what some have feared: a resource-rich African country (with few exceptions) will sooner or later set itself up on a course of disruptive development through conflict, false democracy and/or bad economic governance. Pumping nearly half a million barrels of oil a day, South Sudan—like Chad, Equatorial Guinea, and Gabon—has devoted a chunk of its oil revenues to sustain its army. As one Ugandan cynically remarked; “I’m not happy that Uganda has discovered oil.” Sadly, citizens of South Sudan may share that skepticism.
Like all resource-rich economies, South Sudan faces the challenges of all the complex and inter-connected issues of natural resource management from licensing to exploration, production and revenue sharing and management. It bears the extra burden of having to do all that and more in a post-conflict environment, caught up in its own internal ethnic tensions and embryonic federalism.
Even without the costly, deliberate obstructionism of Khartoum, which is not likely to end soon, building the appropriate institutions and legal framework to manage its oil wealth within its ethnic federalism is key to its development in peace.
The East African Community must stop this descent into chaos, if only to avert the negative “neighbourhood spillover effects” of war and the negative impact on regional development. The African Union must prevail over the warring factions in a hurry because durable peace is fundamental for sustainable development.
Armed conflicts and political instability prevent such peace. And all those with genuine commitments towards the continent must not sit by idly.
• Dr Joe Amoako-Tuffour is a Senior Advisor at the African Center for Economic Transformation (ACET) and was the guest of the Ministry of Finance of South Sudan in October 2011. The views expressed here are solely Dr Amoako-Tuffour’s and do not represent ACET.