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July 2, 2011 (JUBA) — The Vice President of the soon-to-be independent state of
South Sudan, Riek Machar, and the US top diplomat in the region, Ambassador
Barrie Walkley, on Friday discussed the need to attract direct foreign investment in the would be Republic of South Sudan in order to realise the high expectations of the region’s people after independence.
- GoSS VP Riek Machar meeting US Consul General, Barrie Walkley, Juba, 1-7-2011 (ST)
South Sudan is one of the poorest countries in the world but potentially rich with promising resources such as agriculture and oil, among others. Currently its average yearly overall budget is less than 1.5 billion dollars of which 98 percent comes from its share of 50 percent from oil revenues - the other half is shared with the North as per a 2005 peace that granted South Sudan the right to self determination.
Even if the oil revenues would increase by about another 40 percent after independence - a fee will have to be paid to North Sudan to use its pipelines and refinaries after separation - and raise the current budget to about three billion dollars, officials say that it can still take many decades using the government budget to realise standard infrastructure across the region. In many areas of South Sudan this means starting from scratch as the region has remained underdeveloped due to marginalisation and civil war.
Machar said it would be difficult to realise the people’s high expectations in terms of infrastructure development and service delivery after independence without foreign direct investment. This would rapidly “change the whole set up” of the region the Vice President said.
He told the American diplomat that the new nation would decide to privatise building of infrastructure such as standard airports in the ten states and counties, tarmac roads network connecting the region, railways, real estates for decent housing, hospitals electricity, clean water supply, pipelines and refineries, among many others.
He further explained that some of the facilities would then be handed over to the government within an agreed period of time, while the government would play the role of regulating the activities of the investors.
He reiterated his previous projection that South Sudan would mobilise up to 500
billion dollars worth of investment over the next five years to bring the new nation up to international standards in terms of infrastructure.
The Vice President expressed optimism that South Sudan would become the "hub" of
Africa, adding the nation is also geographically the center of the continent.
"70 kilometers away from Juba [South Sudan’s capital] in Tali, Central Equatoria, this is where the center of Africa is. We will build an airport in South Sudan where South Sudan can be the hub of the African countries and the world just like Dubai and Singapore."
"We will raise 500 billion dollars from private investments in the next five years to build this nation to catch up with the rest of the world in infrastructure development. There is no reason why we should not be the best of the best in the region and the world. We have resources and we will utilise the resources to benefit our nation," he stated in a press briefing on Wednesday upon arrival from the US.
Officials suggest that direct foreign investment would also reduce the impact of corruption by government officials who directly handle projects. They also argue that the huge direct foreign investment would create massive employment for the people in the region.
South Sudan is currently availing investment laws in order to make the environment conducive for potential investors.
In the Council of Ministers meeting conducted on Friday, which was chaired by Vice President Machar, the cabinet passed both the Investment Promotion Act Bill 2011 and the Taxation Act Bill 2011, as presented by the minister of Legal Affairs and Constitutional Development, John Luk Jok.
However, ongoing insecurity in the emerging independent state is a major issue that need to be tackled in order to make South Sudan more conducive to large investments.
The US diplomat, Walkley, praised the idea to privatise infrastructure development in South Sudan, saying it was possible to achieve the projected rate of 500 billion dollars in the next five years if foreign direct investments are successfully attracted to the region.
South Sudan will formerly declare its independence in July 9.
(ST)
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