Following oil revenue’s money in South Sudan.

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By Daniel Deng Bol and Leila osman(Juba-South) Sudan is the most oil-dependent country in the world, with oil accounting to 98 percent of the country revenue for almost totality of export,and around 60% of its gross domestic product (GDP). As a new nation, the country has the dual challenge of dealing with the legacy of more than 50 years of conflict and continued instability, along with huge development needs.
Under the comprehensive Peace Agreement (CPA) that ended the twenty years long civil war in Sudan stated that the local communities living in vicinity to oil-extraction areas shall benefit from oil industry. It set a 2% share of oil revenue should go to producing states in proportion to their out put while 3% to the local communities. The local communities benefit from oil-revenue given through local government and from development projects offered bythe oil companies operating in the area.
The Transitional Constitution also says 3% should be allocated to communities, but authorities from Melut and Adar communities of Northern Upper Nile state complain they never received proper compensation or a 3% instead the percent ends up between the ministry of National petroleum and oil companies, an allegation denied both by the Dare petroleum and ministry. Around 80% of country’s oil production come from former Upper Nile state and most of the rest from former Unity state.
Corruption and poor public accounting make record keeping difficult and it unclear whether the government has implemented a new sub-national revenue sharing scheme as part of the petroleum revenue management act.
The act was passed into law 2013 by the National Legislative Assembly to provide a framework for the management of oil revenues in South Sudan.
And it requires that the local communities in Petroleum Producing States receive 3% from the net Petroleum Revenue to finance community development projects approved by the county’s Legislative Council and overseen by the community development committee (CDC) based on transparent equitable and objectives plan
The ratio of the 3% allocation is divided in two; 55% petroleum Producing Counties in the State and 45% to non petroleum producing Counties in the state. On the other hand, the petroleum producing states will receive 2% from the net petroleum Revenues to be allocated to benefit the state development program approved the state Legislative Assembly.
The law requires that a community development committee responsible for the planning and oversight of the community fund shall be established to be presenting its projects and programs to the county Legislative Council for approval.
And the committee shall comprise of persons with proven competence drown from various organizations including representatives from farmers union, women association, Youth Association, faith groups,trade chambers, traditional authority, civil society organization and non-permamnent resource person.
In the light of the above, the dawn Daily Newspaper interviewed Melut county,Hon. Akot Dau Nyok representing two counties of Melut and Adar of Northern Upper Nile state in the Transitional National Legislative Assembly (TNLA) to find out whether what the Act said has been followed or whether the 3% allocation goes to the community living in two counties.
Asked whether the communities are benefiting from the said allocation, he said the three percent was initiated in the parliament and passed into law in 2013 for the communities living in the vicinity of oil fields benefited from oil revenues inform of developmental projects.
However, But he said he had not seen the dividends of the three percent on ground.” There are no signs of development on the ground in Melut county. I did not see schools, hospitals and water facilities installed except only one road which is connecting Melut and Paloch”, said Hon. Nyok.
Hon. Nyok added saying he’s not so sure about the problem causing the delay in implementing the 3% whether its because community has not been receiving the transfers or the community development committee charged to overseen the management of the money has not been formed. If the committee was formed it would have reached the parliament, he said
“Our duty is to make sure that the funds are released, the money is used for the community development including schools, hospitals, community road and water and facilitation facilities .There is only one road connecting Adar and Paloch”, Nyok said.
The experience of using three percent has gone well in most of the African oil producing state. He said in Nigeria for example, the community oil producing communities is given 18%, while in Kuwait the percent given to the community is determined by the numbers of oil wells installed in the area.
However,The former commissioner of Melut County Mr. Dau Guoch Ayuel has concurred with the Hon. Nyok, saying he had not seen the money of the three percent or any development during his time when he was a commissioner.
“There were no schools, hospitals and water facilities that had been build during my time in office and after heI left”, Ayuel recalled.
He said the 3% percent did not go to the communities, but instead its ends up between the national of ministry of Petroleum and Dare Petroleum operating in the area. Any aAttempts made to reach the National mMinister of Petroleum for comment went futile.
The former Commissioner He also revealed the Dare petroleum is also supposed to give community $8 million every year.
According to Mr. Ayuel Akoj Malek, the Community Development Manager of Dare petroleum concurred with the above statement, but said its operation budget was badly affected after the oil prices went down from 8 million US dollar to 3.8 million US dollar given to implement the community projects per year as part of its (Dare Petroleum) corporate social responsibility to implement the four project including education, water, health and health and also facilitate community developmental activities in the areas of education, water, agriculture and health.
Mr Ayuel said the company is in the process of completion of Melut secondary school, which is part of Dare petroleum contribution to the development of the community exclusive of the 3%. He said the 3% is supposed to be implemented by the Government. But He said the 3% allocation to the communities living around oil fields is the government prerogative and its has nothing to do with Dare Petroleum.
Officials from the state also believed that he creation of more states in the former Upper Nile states has affected the implementation of the 3% allocation coupled with the eruption of 2013 crisis.
Former Upper Nile state is divided into five states including Northern Upper Nile, Central Upper Nile, Fashoda, Maiwut and Latjore states..
Michael L.Ross put it in his book, “The Oil Curse” that Countries that which are rich in petroleum have less democracy, less economic stability, and more frequent civil wars than countries without oil. Michael L. Ross looks at how developing nations are shaped by their mineral wealth–and how they can turn oil from a curse into a blessing.
The Oil Curse shows why oil wealth typically creates less economic growth than it should; why it produces jobs for men but not women; and why it creates more problems in poor states than in rich ones. It also warns that the global thirst for petroleum is causing companies to drill in increasingly poor nations, which could further spread the oil curse.
Analyst said the Government’s commitment through the enactment of the enabling legislative framework and efforts by the oil companies provide hope that South Sudan may avert the oil curse and use its oil revenues to bring about development.
And also urge the government,oil companies,and all the stakeholders to support and implement the provisions of the law for the development of South Sudan.