South Sudan invites investment in agriculture, mining, oil

24th April 2019 By: Marleny Arnoldi - Creamer Media Online Writer

Since its official independence from Sudan in 2011, South Sudan has ripened the environment for investment in the country, which was apparent when the country’s Ministers on Wednesday met with South African investors and businesspersons during a roadshow, in Sandton, to discuss investment opportunities.

This was the final leg of the Invest in South Sudan Roadshow, which had previously been held in Washington DC, New York and Dubai.

South Sudan Foreign Affairs and International Cooperation Minister Nhial Deng Nhial said the country was eager to restart the industries that were put on hold by conflict.

At the event, South African Chamber of Commerce and Industry (Sacci) and the South Sudan Investment Authority (SSIA) signed a memorandum of understanding in terms of which Sacci committed to business collaboration with the South Sudanese business community.

Sacci president Mtho Xulu commented that the chamber wanted the partnership institutionalised and accountable. He noted that South Sudan was the “youngest” country in the world and that, with a new country comes new opportunity.

SSIA secretary general Dr Abraham Maliet Mamer said South Sudan had the opportunity to “start at where the world is now, we are not starting at zero.” He assured the audience of South Sudan’s peaceful state, despite the stigma of conflict that Sudan has had historically.

He further stressed that South Sudan and Sudan had their respective political systems and that Sudan was dependent on oil from South Sudan, so the north would not “tamper with its lifeline”.

Meanwhile, the African Export Import Bank had already committed a $500-million financing facility to the South Sudanese government, which would go towards quick-impact projects and funding advisory services in power transmission, infrastructure and agricultural projects.

The biggest resource in South Sudan is oil. The country produces 165 000 bbl/d of oil from about 700 wells, but only 30% of the country’s oil reserves are being explored and less than 30% is being extracted.

National Petroleum and Gas Commission chairperson Caesar Oliha Marko said two-thirds of the country’s land had potential for hydrocarbons (oil and petroleum), but only a quarter of the land had been explored.

Ministry of Petroleum director-general Awow Daniel Chuang confirmed that South Sudan had reserves of around 1.4-billion barrels of oil. Currently production comes from three concession areas (six blocks). Government is aiming to ramp up production to 200 000 bbl/d of oil by the end of the year and to drive investment towards exploration of existing blocks and potential new blocks.

Opportunities in oil include mapping hydrocarbon resources, the construction of refineries and thermal power plants, the construction of fuel depot facilities, capturing flare gas in the oilfield, field service provision and the construction of pipelines and waste treatment and disposal facilities.

Mining Minister Gabriel Thokuj Deng, meanwhile, stated that the mining sector in the country was still in its infancy and that there was a great need for infrastructure.

He assured stakeholders that the mining ministry had 1 000 police officers at its disposal to deploy for mine protection specifically, providing peace of mind to new entrants in the sector.

The Minister pointed out that the country had gold, copper, iron-ore, chrome, zinc, tungsten, mica and silver resources.

The country has a total area of around 150 000 km2 that is designated for exploration and mining.

There are opportunities for foreign companies to invest in mineral exploration, small-scale mining for alluvial gold, geological mapping, airborne geophysics, geochemical surveys, geological and geochemical laboratories.

The Minister remarked that market entrants were welcome to go it alone or partner with government in starting exploration. However, once mines enter into production, government requires that 50% of output be transferred to the national bank, while companies can sell and export the remaining 50%.

Agriculture and Food Security Minister Onyoti Nyikwec told delegates that 95% of South Sudan’s 648 000 km2 was suitable for agriculture, of which 50% was prime agriculture land with soils and climates suitable for production of “cash crops”.

However, only 4.2% of prime land was under cultivation, which is dependent on the country’s average 500 mm to 1 800 mm rainfall a year.

Nyikwec pointed out that the country was rich with surface and ground water resources, and that development for irrigation was essential for further agricultural development.

The country has a 11.7-million-strong cattle herd, with 12.3-million sheep and 12.6-million goats, which posed untapped commercialisation opportunities.

About 32% of the land is covered in timber-rich forests, while the country’s current wild fishery output is 140 000 t/y, with a potential of 200 000 t/y. The Minister said attention was needed in developing the high-potential aquaculture sector.

Opportunities for agriculture include agroprocessing plants for different varieties of crops and fruits, the production of honey, sugarcane, cotton, tea and coffee, as well as Gum Arabic processing and marketing, the construction of agromechanical training workshops and the establishment of research centres for pest control.

Additional opportunities include quality seed production; sorghum, maize, sesame, rice, nut, and sunflower production; as well as tractor assembly plant establishment projects and pesticide production projects.