Southern Sudan locked in dependency syndrome

May 7, 2008 (JUBA) – Mr Kuol Athain,  South Sudan’s Minister of Finance and Economic Planning swivels in a leather chair behind a shiny mahogany desk, in an air-conditioned office that has  taken the government three years to renovate, and answers why the Government of Southern Sudan won’t construct housing estates to solve a housing crisis.

“The private sector will do that,” he says.

What if they don’t come?, I ask.

“They will come,” he says. “We are now working on investment laws to ensure that they come."

But Southern Sudan is not short of investors.

The scent of oil has brought with it murky investors out for a killing, exploiting the absence of systems.

Consider the $25 million (Sh1.5 billion) hospital built in a jungle without people, using prefabs with a two-three year warranty. Or consider the $76 million (Sh4.7 billion) spent on 153 vehicles, mostly Land Cruisers, according to lawmakers.

Despite billions in contracts, the region is not short of misery. Misery is in schools, and it’s in rundown hospitals. It manifests itself in the infrastructure, and it’s right behind Mr Athain’s office.

Here, heavy four-wheel-drive cars strive for parking space next to dingy, makeshift eateries at the edge of a dusty road across a spiralling three-year-old internally displaced people’s camp.

“We are beginning from zero,” Regional Cooperation Minister Barnaba Marial Benjamin says. The health infrastructure is a mess. At Juba Teaching Hospital, the region’s elite health institution, patients wait days on the verandah for treatment. Appalling health indicators include having the world’s highest maternal mortality rate.

Education is bad too. Schools are crumbling, such that even low earners send relatives to study in Uganda and Kenya. Education indicators are the world’s lowest: one per cent girls and two per cent boys complete primary school.

Civil service is pathetic

And, by the Public Service Minister Awut Deng’s own account, the civil service is pathetic.

“You have extremely weak capacity after the war,” says Mr Laurence Clarke, the Southern Sudan World Bank Manager. “Some of killed in the war, some are displaced by war, while others flee.

That’s not something you underestimate.” To Mr Luka Monoja, Southern Sudan’s Cabinet Affairs Minister, the civil service problem dates back to the 1940s in Gondokoro. In East Africa, for instance, the Kaisers of Germany sought treaties with local chiefs in Tanganyika, Rwanda and Burundi, forcing Britain, which had only dealt with the Sultans, to seek similar treaties with the indigenous local chiefs. Likewise, power-sharing in Sudan was limited to the Arabs.

“Even when the indigenous populations were hostile, some form of agreement was reached,” Mr Monoja says of other areas were the colonising authorities sought to transfer skills to the local people.

“In southern Sudan, nobody wanted to deal with them (the local people),” Mr Monoja says.

It’s in view of these challenges that the Finance Minister says he needs $11.55 billion  from the international community.

“We are asking our friends in the international community to help us raise this money,” Mr Athain says. Indeed, for south Sudan, an outpouring of international goodwill exists. South Africa and Kenya have helped train the civil service; Ethiopia has provided 400 scholarships to Southern Sudanese while Uganda is charging southern Sudanese local rates at its universities.

Gabon is offering oil-drilling technical help, and international donors have given $231 million for reconstruction in the past three years, besides funding humanitarian issues such as emergency disease outbreaks and floods.  What would more money do? Mr Athain cites resettlement of people and rebuilding of infrastructure, for instance.

Not everyone agrees.

“In the end, money is just part of the problem,” says Mr Clarke.

In fact, southern Sudan is not short of money. In 2007, oil money nearly reached $2 billion (Sh124 billion). And thanks to rising international oil prices, the oil money remittance to southern Sudan was $237 million (Sh14.6 billion) for January 2008, which is the latest figure available from Khartoum.

Should this trend continue, then the region is on track to earn nearly $2.8 billion in 2008.
Compare that with Liberia’s $183 million 2007 budget.

That Liberian President Johnson Sirleaf last year refused to borrow money until corruption and financial discipline was cultivated shows is a lesson south Sudan’s President Salva Kiir may want to borrow.

South Sudan needs less money, not more. Without a functioning auditing system, any money is a wash down the drain. Corruption is apparently less, but survey by one magazine showed that most people think nine out of every 10 government workers are corrupt. Part of the problem could be the difference between the salaries and allowances of top civil servants earn and those of their juniors, which gives the impression that some people are better off because they are corrupt.  In the past six months alone, three Speakers of regional parliaments have been accused of pocketing MPs’ allowances. They deny the allegations.

With good accountability, the region should save and reinvest oil money in order to make more money.

But for now, the desire to move from oil to other sectors is mostly talk, and little action. The Southern Sudan government claims having the potential to supply the entire Africa with food, but the region still relies on food imports. whose prices are ever rising.

The government also claims that it can produce 2000MW of power from the River Nile, but save for 5 MW power-driven generators powering a two-kilometre stretch, darkness descends on the region every day. The government also claims enough cement deposits for reconstruction and export, but a bag of cement costs $30 (Sh1,860) nearly three times the price in neighbouring countries because it is imported.

The World Bank estimates a classroom block construction in Southern Sudan at $250,000, compared to $80,000 in Angola and $60,000 in Liberia.

“I realise it’s a large difference between the two — we know what is reasonable for post conflict countries,” Mr Clarke says. “The-whole development effort is geared towards  reducing the amount [of $250,000].”

A cement factory

Why doesn’t the government build a cement factory?

“We would end up controlling the prices and squeezing out the private sector,” says Athain.
How about building a housing estate? Mr Athain gives the same private sector story.

But so long as construction material is imported, accommodation prices will remain obscene, as high as $300 (Sh18,600)  a night a tent. Officials as junior as five ranks below a minister spend up to $100,000 annually on hotel tents. And ministers charter planes — because roads don’t exist — for $10,000 each.

Mr Athain might have an impressive grasp of the role of the private sector, but can a region so crippled and thought insecure put all its hopes in foreign investors and donors?

The solution to south Sudan’s problems lies within. Not with donors or investors from outside, and not necessarily with solutions that have worked elsewhere.

While for instance, in Liberia and Angola ex-combatants due for demobilisation numbered between 40,000 and 90,000. In southern Sudan, nearly everyone says they fought at one point. The only place for employment right now is the public service. How do you balance highly educated persons, but who didn’t physically fight, and mostly uneducated fighters on a payroll?

Easily retrenched

The fighters cannot be easily retrenched, however, incompetent.

“Unemployment can be a nightmare and you run the risk of running into a new conflict,” says Mr Clarke.

The alternative, as government technocrats say, is the private sector.

“If there are projects, if there are investors coming here, then everybody would be engaged,” Mr Athain says. “Nobody would be thinking about war.”

The feeling that the region is not yet stable, and won’t be for a while, means that the foreign investors are not going to come any time soon.

Meanwhile, the local population lacks entrepreneur skills required for reconstruction. Indeed, the World Bank requires construction firms to have at least five years’ experience, technically knocking out locals.

Southern Sudan’s problem is how to use the military personnel productively. In Khartoum, for instance, the government runs military hospitals, a telecommunications firm, military car industries, and construction firms.

“We have given them a contract for a road,” says Mr Athain.

That looks like the exception. But Athain is mostly waiting for donors and foreign investors to grow the private sector. Meanwhile, the people grumble