US-based billionaires pledge to rescue South Sudan economy through investment
May 23, 2012 (JUBA) – South Sudan may soon relax its austerity measures if the government reaches a breakthrough with companies owned by a group of US-based multi-billionaires who have expressed their readiness to invest in various sectors in South Sudan.
The visiting group of billionaires headed by Rubar Sandi of TSG-Southex company, on Monday arrived in Juba from the United States of America and met with the Vice-President, Riek Machar, in the presence of seven concerned ministers of the government during which they assured of their readiness to invest in the newly independent country.
The Vice-President’s Press Secretary, James Gatdet Dak, told Sudan Tribune that the billionaires wanted to invest in crude oil, housing, roads and airports construction, agricultural schemes, supply of essential commodities such as food items and fuel, among others.
The ministers who participated in the joint meeting which took place in the office of the Vice-President included Oyai Deng Ajak, Minister for National Security, Garang Diing Akuong, Minister of Commerce, Industry and Investment, Jemma Nunu Kumba, Minister of Housing and Physical Planning, Stephen Dhieu Dau, Minister of Petroleum and Mining, Agnes Poni Lukudu, Minister of Transport, Betty Achan Ogwaro, Minister of Agriculture and Forestry, Simon Mijok Mijak, Deputy Minister of Roads and Bridges.
The billionaires assured the government that unlike some other investors who look for funds elsewhere to finance their investments, the group has its own money ready to invest provided that it reaches an agreement with the government on the terms of investment.
The priorities of the various projects and the details of the agreements will be worked out with the respective relevant ministers for action.
The group also expressed readiness to buy at least five million barrels of crude oil a month from South Sudan, even at well head.
South Sudan last January accused Sudan of stealing its oil and shut down its production. The two countries have failed to reach a deal on oil transportation fee among others in their discussions related to the post-independence issues.
Oil is the main source of revenue for the new nation which took about three quarters of Sudan’s oil production after its independence in July 2011.
South Sudan has adopted the policy of attracting foreign investment to the 10-month old country in order to boost its economy, provide basic services to its populations and put in place non-existent infrastructure such as roads, airports and housing.
The situation has been exacerbated by the recent closure of oil production which was the sole source of the government’s annual budget by 98%. However, government officials assure that the situation will be managed without the oil revenues using other channels.
Juba has recently introduced austerity measures cutting government expenditure. This has seriously affected development projects. The government has, however, maintained the salaries for its civil service, and focused on food provision, as well as keeping schools and clinics open.
The Qatar’s government has also availed hundreds of millions of dollars to the Bank of South Sudan as a credit line for importing essential commodities which require hard currency, helping South Sudan to bring down slowly the rising rate of US dollar against the depreciating South Sudanese pound.
Juba has also introduced providing the Letter of Credit (LC) as the Bank’s guarantee to traders who import such commodities so that the demand for cash hard currency is reduced.
The government has also embarked on improving its weak tax collection system and developing other untapped resources such as gold, timber and Gum Arabic.
(ST)