Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Oil can be a winning lottery ticket for a country,
Speaker 2: transforming economies wherever it's found. But what happens when you
Speaker 2: can't get the oil out?
Speaker 3: A perfect storm is gathering in South Sudan.
Speaker 4: Oil fueled Sudan's bloody two decade long civil war, but
Speaker 4: now for the black goal to keep flowing to China,
Speaker 4: its main buyer, both sides need each other.
Speaker 2: South Sudan, the world's youngest country, depends on oil to
Speaker 2: fund its economy, but a blocked pipeline has left the
Speaker 2: already crisis rocked country rapidly running out of money and
Speaker 2: with the world's attention elsewhere, unable to get enough help.
Speaker 3: Uncertainties in the face of critical political events necessary for
Speaker 3: a peaceful transition a rapidly deteriorating economy, exacerbated by the
Speaker 3: in critical oil infrastructure and oil revenue. Time is running out,
Speaker 3: and the costs of inaction at this juncture are too great.
Speaker 2: On this episode of The Next Africa podcast, we'll look
Speaker 2: at what's gone wrong in South Sudan and how the
Speaker 2: impacts of a failing state are being felt.
Speaker 5: On the streets of the nation's capital.
Speaker 2: I'm Jennifer Zabasajep and this is the Next Africa Podcast,
Speaker 2: bringing you one story each week from the continent, driving
Speaker 2: the future of global growth with the context only Bloomberg
Speaker 2: can provide. Joining us this week is our reporter at large,
Speaker 2: Simon Marx. He's been reporting on this story for Bloomberg
Speaker 2: News and he's with us now. Hi, Simon, how are
Speaker 2: you hi?
Speaker 1: That great?
Speaker 5: Thanks thanks for being on the podcast this week.
Speaker 2: So let's just start with the little history of South Sudan.
Speaker 2: It's known as the world's youngest country. How did it
Speaker 2: manage to gain its independence just a little over a
Speaker 2: decade ago?
Speaker 5: Take us back to that.
Speaker 6: Yeah, so South Sudan, as you say, it does have
Speaker 6: this tagline as the world's youngest country. It got its
Speaker 6: independence in July twenty and eleven after a referendum was
Speaker 6: held in the country, and this happened after long standing
Speaker 6: tensions with Sudan in the north. Obviously Sudan South Sudan
Speaker 6: used to be unified, but because the capital Khartum controlled
Speaker 6: all the finances and took a lot of the money
Speaker 6: from the South, which is oil rich, there's always been
Speaker 6: this standoff between these two countries. Over who gets the
Speaker 6: lion's share of that, and so that led eventually to
Speaker 6: a referendum and the country's independence.
Speaker 2: You talked a bit about this, but the natural resource
Speaker 2: what makes this country really rich in theory is oil, right,
Speaker 2: But how much oil are we we actually talking about here?
Speaker 6: Yeah, In the case of South Sudan, oil revenues really
Speaker 6: account or nearly all government revenues.
Speaker 1: It's over ninety percent of what the government earns.
Speaker 6: Comes from a series of oil fields, mainly in the
Speaker 6: north of the country and in total, before war broke
Speaker 6: out in neighboring Sudan last year, it was producing about
Speaker 6: one hundred and fifty thousand barrels a day of oil
Speaker 6: and that was going through a pipeline all the way
Speaker 6: to the Red Sea coast where it was exported out
Speaker 6: of Port Sudan. Earlier this year, in around February, there
Speaker 6: were rumors that began perculating that the oil pipeline just
Speaker 6: inside Sudan, its northern neighbor where there's a civil war underway.
Speaker 1: Had burst and that oil production had stopped.
Speaker 6: And eventually information came out from the government that indeed
Speaker 6: there had been a blockage in the pipeline that was
Speaker 6: caused from a lack of diesel to run generators and
Speaker 6: equipment that thinned the crude because South Sudan's crude oil
Speaker 6: is actually very sick and access to this area was
Speaker 6: obviously very difficult and engineers initially anyway, could not get
Speaker 6: there to fix the problem.
Speaker 2: And this has been several months that this has gone on, Simon.
Speaker 1: Correct, Yeah, so at least since February.
Speaker 6: Confirmation of this rupture came through in February via Sudan's
Speaker 6: Minister of Energy and Petroleum, and ever since there's been
Speaker 6: very little oil getting out and that has resulted in
Speaker 6: pretty pretty disastrous eventualities for the government.
Speaker 2: Yeah, Simon, maybe you can talk us through that, because
Speaker 2: surely it's trickling down to everyday people, South Sudanese people.
Speaker 5: How is this being materialized, I guess on the ground.
Speaker 6: Yeah, So, prior to this happening, South Sudan was already
Speaker 6: in a pretty disastrous situation. You know, it's been through
Speaker 6: years of civil war after its independence. Civil war broke
Speaker 6: out in South Sudan between its president and Vice President
Speaker 6: Rick Macha, and despite there being a peace deal in
Speaker 6: twenty eighteen, there's been a lot of violence in the
Speaker 6: country ever since that date, however, what's happened with the
Speaker 6: oil revenues has just compounded and already terrible humanitarian situation
Speaker 6: in South Sudan. It's a country where millions of people
Speaker 6: were displaced even before this oil problem. But you know,
Speaker 6: we've had access in the capital Juba. We're really seeing
Speaker 6: a complete meltdown of the civil service of public amenities,
Speaker 6: from hospitals to schools, where teachers are no longer going
Speaker 6: to work because they're not getting their salaries. We've spoken
Speaker 6: to teachers who are now just working odd jobs on
Speaker 6: the site, forming their own little restaurant, of their own
Speaker 6: little shop at the side of the road, for example.
Speaker 6: So that's resulted in kids not going to school. Hospitals
Speaker 6: where there used to be power are now very often
Speaker 6: facing outages. That's resulted in some cases loss of life
Speaker 6: inside hospitals due to the lack of power. So yeah,
Speaker 6: it's a really terrible situation.
Speaker 2: And how then, Simon, I mean, if what you're describing
Speaker 2: is the situation on the ground, how is the government
Speaker 2: then functioning? What is the government doing at this point
Speaker 2: about the deteriorating situation in the country.
Speaker 6: So the South Studentese government, in order to try and
Speaker 6: alleviate the problem with its public finances, has reached out
Speaker 6: to foreign players, mainly in the Gulf. We've spoken to
Speaker 6: officials and diplomats who are aware of what South Dudan
Speaker 6: has been up to, who have confirmed that there's been
Speaker 6: senior officials visit Dubai, for example, in the United Arab Emirates.
Speaker 6: It's to date putty unclear if they've managed to get
Speaker 6: any funds out of such countries. It does seem though
Speaker 6: that they're having to cut costs everywhere. There's even in
Speaker 6: ministries where they had air conditioning.
Speaker 1: Uba is a very hot city.
Speaker 6: Everything's turned off and civil servants just don't turn up
Speaker 6: to work and they're unable to pay in many cases
Speaker 6: salaries for your average state worker. So the state pretty
Speaker 6: much is on the verge of bankruptcy.
Speaker 2: Stick with us, Simon. When we come back, we'll look
Speaker 2: more into what daily life is like at the moment
Speaker 2: in South Sudan and whether there's any hope for improvement.
Speaker 5: We'll be right back. Welcome back today.
Speaker 2: On the podcast, we're digging into South Sudan and how
Speaker 2: a broken oil pipeline has left the country desperately short
Speaker 2: of any income. Simon Marx has been following this story
Speaker 2: very closely. Simon, you were taking us through a lot
Speaker 2: of the stories of daily life for people there. I
Speaker 2: wonder if there's any person or story that really stuck
Speaker 2: out to you that you think really describes or encapsulates
Speaker 2: the situation that South Sudan is in right now.
Speaker 6: There are many stories on the ground there of people
Speaker 6: suffering to access basic services that the government ordinarily would provide.
Speaker 6: There was one story when we spoke to a woman,
Speaker 6: her name is Sarah at Teng. She was stood outside
Speaker 6: the Al Sabah Children's Hospital in the capital where she
Speaker 6: was trying to get access to medicine for her one
Speaker 6: year old daughter who had problems respiratory problems, and she
Speaker 6: told us that essentially there was no medication left inside
Speaker 6: the hospital and she'd been going back to the hospital
Speaker 6: continuously since February when the oil pipeline ruptured, to try
Speaker 6: and get some medication for her.
Speaker 1: Daughter and just hadn't been able to do it.
Speaker 6: And I think, you know, her situation really encapsulated some
Speaker 6: of the desperation on the streets of Juba, the capital
Speaker 6: of this country, and in theory, the place where you
Speaker 6: would go to get help if you have a sick child.
Speaker 2: Would you say that there's an awareness from the international
Speaker 2: community of just how bad it is and how pressing
Speaker 2: AID needs to get into South Sudan.
Speaker 6: I think, you know, inside NGOs and UN agencies there
Speaker 6: is a sense of how disastrous the situation is there,
Speaker 6: but unfortunately it's totally overshadowed by what's happening just north
Speaker 6: in Sudan, where there's a full blown civil war that's
Speaker 6: been going on for over a year now, and all
Speaker 6: the focus is there, where a famine has been announced
Speaker 6: and tens of thousands of civilians are dying amid the
Speaker 6: warfare there. So in comparison, unfortunately, South Sudan really is
Speaker 6: somewhat forgotten about that.
Speaker 1: There also seems to be a.
Speaker 6: Fair amount of apathy around trying to make this country
Speaker 6: actually work. There was so much hope in the beginning
Speaker 6: to create this new nation, and two years after its
Speaker 6: independence it fell into civil war. Orn's never really managed
Speaker 6: to hold proper elections and get the ball rolling on
Speaker 6: forming its state. So unfortunately, the people I talk to, though,
Speaker 6: there is quite a lot of simply almost giving up.
Speaker 2: And that's even despite the fact that potentially there is
Speaker 2: an outcome in which the oil pipeline is fixed and
Speaker 2: it's turned back on again. Are there still people that
Speaker 2: are holding out hope for that eventuality?
Speaker 1: Yes, there is some light at the end of the tunnel.
Speaker 6: Very recently, officials from South Sudan's Petroleum Ministry have visited
Speaker 6: Port Sudan to inspect equipment at the port there ahead
Speaker 6: of what they say is an imminent resumption of oil production.
Speaker 6: But you know, we're still waiting. They say it could
Speaker 6: happen any day now. Officials within the consortium the oil
Speaker 6: operators do also confirm that aiming at end of October
Speaker 6: beginning of November.
Speaker 2: So then what's next to look out for, Simon? Is
Speaker 2: it when potentially the taps turn back on. What is
Speaker 2: it that you're closely watching?
Speaker 6: Yeah, I think the next thing to watch it will
Speaker 6: be if the oil can flow again, But also what
Speaker 6: happens to the money that the government earns as a
Speaker 6: result of this, and if they start providing services to
Speaker 6: its people or if they continue to take advantage of
Speaker 6: some of that money for themselves. One aspect of this
Speaker 6: whole thing that we spotted is everyone who's been investing
Speaker 6: in oil working in the oil industry. When that sector
Speaker 6: dried up, they began investing in land in Jubrn and
Speaker 6: this has produced a spike in land praises in some cases.
Speaker 6: And we've reported that to these businessmen involved in the
Speaker 6: oil sector at some points coming into the city with
Speaker 6: bags of cash to speculatively get their hands on land.
Speaker 6: So yeah, you can see the sort of other spillover effects.
Speaker 1: Through this from the lack of oil production.
Speaker 2: Would you say there's a hope amongst the population that
Speaker 2: things could potentially turn around soon for them.
Speaker 6: I think there's a lot of dissatisfaction generally amongst the
Speaker 6: public in the current government.
Speaker 1: Elections were supposed to be held this year.
Speaker 6: The country's partners, including the US, are not endorsing elections
Speaker 6: this year because they feel they won't be free and fair,
Speaker 6: and so the population definitely they want services back, but
Speaker 6: I think they also want more responsible leaders running government
Speaker 6: to go hand in hand with that.
Speaker 2: And you can read Simon's piece for Bloomberg City Labs
Speaker 2: on Bloomberg News platforms right now.
Speaker 5: Here's a few other stories we're following in the region.
Speaker 1: Mosim began.
Speaker 2: Opposition politician Venancio Mundlin has called for a country wide
Speaker 2: strike to protest preliminary results that put him in second
Speaker 2: place in the country's presidential election. He urged supporters to
Speaker 2: paralyze the country, according to a video posted to his
Speaker 2: social media channels, including YouTube, on Wednesday. Mundlin has repeatedly
Speaker 2: said he was winning, and the US has offered intelligence
Speaker 2: sharing to both the DRC and Rwanda in a bid
Speaker 2: to bring about a ceasefire in the conflict that has
Speaker 2: displaced more than two million people. US officials have touted
Speaker 2: the success of their intelligence diplomacy, but it hasn't yet
Speaker 2: led to a stable end to hostilities. You can follow
Speaker 2: these stories across Bloomberg, including the Next African Newsletter. We'll
Speaker 2: put a link to that in the show notes. This
Speaker 2: program was produced by Adrian Bradley. Don't forget to follow
Speaker 2: and review this show wherever you usually get your podcasts.
Speaker 5: I'm Jennifer's Abasaja. Thanks as always for listening.