, NAIROBI, Kenya, May 16 – South Sudan is trudging on with plans to develop its infrastructure amid unresolved oil issues with its northern neighbour; an inflation surge and recently imposed austerity measures to recoup revenue losses.
For roads infrastructure alone, South Sudan would require an estimated $10 billion while funding for eight of its hydropower sites will need $15 billion.
Speaking during the African Trade Insurance Agency (ATI) Annual General Meeting in Nairobi on Wednesday, South Sudanese Vice President Riek Machar said the budding nation’s infrastructure needs present a major opportunity for foreign investors.
The world’s newest nation is negotiating loans from various financial institutions and has already secured a $8 billion loan from China for infrastructure development.
“We are on a campaign to finance our development projects through loans. We are discussing with banks and other financiers to finance basic commodities on short term loans to avail a revolving financial package,” he said.
With crude sales accounting for 98 percent of South Sudan’s revenue, Machar said the country is planning alternate avenues to export its oil, through two pipelines that will take approximately three years to construct through Kenya and Ethiopia.
“We had to take charge of our raw resources. Before we took the decision we couldn’t say we knew what we were producing (but) now we know. Even if we were to reach an agreement with Khartoum it would be acceptable not dictated by one side,” he added.
Machar said the austerity measures the government put in place will keep the economy afloat until it constructs the two pipelines.
“We introduced the austerity budget and cut back on our spending. We had been liberal about collecting our revenue internally from no oil revenue. We have stepped it up and there are very good results,” he explained.
South Sudan gained control of about 75 percent of the previously united country’s 490,000 barrels a day of output during independence.
The country is now looking to boost its trade portfolio and wants to become a member of the ATI, Africa’s multilateral insurer of commercial and political risks.
ATI’s gross expenditure rose to $10 million in 2011, while gross exposure increased by 55 percent to $593 million.
With an estimated $5.3 billion needed to meet Africa’s annual energy deficit, ATI is looking to ease the demand having already insured four key projects in Burundi, Tanzania and Zambia valued at $500 million last year.