‘Timebomb’ Road Is Economy Lifeline in World’s Newest Nation

SOUTH SUDAN, Capital Markets in Africa: When trucker James Okumu slams his pedal to the floor for the three-hour drive between South Sudan’s capital and the Ugandan border, he feels like he’s sitting on a timebomb.

“You don’t know when it will explode,” said the 37-year-old Ugandan, who regularly plies the 195-kilometer (121-mile) route to transport vegetables and rice to Juba from his home country.

Unidentified gunmen have ambushed buses and fuel-tankers on the winding road this month, killing at least 13 people, according to a tally of local media reports. It’s the latest violence linked to a civil war that began in late 2013 and has claimed tens of thousands of lives while bringing the oil-producing nation to the brink of collapse.

The fall in traffic on the Juba-Nimule road, a key route to the East African region’s biggest port in Kenya, could mean disaster for South Sudan’s economy. Inflation is already almost 730 percent and practically everything, including refined fuel, is imported. Rather than risking the route, many aid groups are flying in humanitarian supplies crucial to a country where almost half the more than 11 million population face severe food shortages.

“It’s basically the lifeline of South Sudan,” Augustino Ting Mayai, an analyst with the Sudd Institute, a Juba-based research organization, said of what’s one of the few tarmacked thoroughfares in the nation that became independent five years ago. “Any hindrance getting resources has adverse effects on the country. This is an emerging issue which the government must act on immediately.”

Roads linking the capital to key towns in the country’s southern Equatoria region, including Torit, Yambio and Kajo Keji, have also been increasingly insecure since fighting flared between armed factions in Juba in July. That violence left at least 270 people dead and forced then-Vice President Riek Machar, who’d only returned in April to join a transitional government seeking to end the war, to flee. The number of South Sudanese refugees seeking shelter in neighboring countries reached 1 million last week.

“When road routes are cut, humanitarian organizations have to increase their air operations to be able to transport supplies, which is far more costly,” Guiomar Pau Sole, a spokesman with the United Nations Office for the Coordination of Humanitarian Affairs in South Sudan, said in an e-mailed response to questions.

Economic Woes
The country’s economic woes have been exacerbated by falls in oil production, which has declined by at least a third to about 130,000 barrels per day since the war began, and the value of the South Sudanese pound. There’s already been an effect on imports coming from Kenya’s Mombasa, the most common shipping route for cargo to the landlocked country. About 33,400 dead-weight tons were bound for South Sudan in July, down from around 67,900 tons in March, according to the Kenya Ports Authority.

Exports from Uganda, the country’s largest trade partner, have declined from about $1.2 billion in 2008, before the territory became fully autonomous, to $414 million in 2013 and $353 million last year, according to the Ugandan government. Products shipped include cereals, sugar, building materials, beverages and second-hand vehicles.

South Sudan’s government said in August that it’s seeking a $1.9 billion loan from China to develop its oilfields and roads. The finance ministry later said it needs $300 million in grants and borrowing to support the 2016-17 budget.

The army has beefed up security on the highway and is providing escorts to convoys, according to military spokesman Lul Ruai Koang. He said he had reports that rebels linked to Machar had claimed responsibility for the attacks. A spokesman for Machar’s former rebels said the assaults were by armed civilians and disgruntled soldiers, caused by the economic crisis and the failure of the government to agree on camps for the ex-insurgents.

Armed Groups
“We don’t have a policy of attacking civilians,” Mabior Garang said by phone from Khartoum, the capital of neighboring Sudan. “The argument for cantonment was we can’t account for bandits. If we do cantonment, we can pursue the bandits.”

The unresolved inclusion of armed groups from the Equatoria region, through which the road passes, in the country’s 2015 peace agreement continues to drive conflict in the area, the Geneva-based Small Arms Survey said in a July report. “No government can sit comfortably in power in Equatoria’s Juba while facing robust, coordinated Equatorian opposition,” it said.

Mohamed Yusuf, a Kenyan who has driven fuel-tankers from Mombasa to Juba since 2012, said he and others are considering suspending travel on the route until security improves.

“You leave Nimule thinking, will I see this place again?” Yusuf said of the border-town in an interview after arriving in Juba. The journey, he said, is a “nightmare.”

Source: Bloomberg Business News