South Sudan Plans to Boost Oil Output as Revenue DeclinesOkech Francis
South Sudan will boost oil output in Upper Nile state, where it’s producing about 160,000 barrels per day, and resume pumping in neighboring Unity state to increase revenue in the war-torn nation, President Salva Kiir said.
The government also plans to fire state workers to free up cash for investment in non-oil industries, Kiir said in a speech to parliament Wednesday in the capital, Juba. Other ways to bridge a “financial gap” are to improve collection of non-oil revenue and “seek funds through domestic and external borrowing,” Kiir said.
South Sudan’s almost two-year conflict has left thousands of people dead and forced about 2 million to flee their homes. An August peace agreement signed by Kiir and rebel leader Riek Machar seeks to establish a transitional administration to govern for 18 months.
Unity’s crude production was cut shortly after war began in December 2013, reducing output in the nation, which has sub-Saharan Africa’s third-biggest reserves, by about a third. Efforts to restart operations in the northern state have been hampered by sporadic fighting.
Low oil revenue means it will “be hard for the government alone to shoulder” the costs of establishing peace, which include reintegrating fighters and rebuilding destroyed schools, hospitals and infrastructure, Kiir said.
“I therefore appeal to the international community and friends of South Sudan if they are there to continue supporting us in this peace process,” he said.
The government is planning to “realign” the exchange rate for the South Sudanese pound, Kiir said. The currency can currently trade on the black market at more than five times the official rate of about 3 per U.S. dollar.