OPINION: A Nation Rich in Oil, Poor in Development: Why Privatization Reform Is South Sudan’s Critical Turning Point

(By Garang Abraham Malak)

In South Sudan, there is a common saying: one must take rumors seriously. Citizens often recount how widely circulated warnings, initially dismissed, eventually materialize into devastating realities. The recent attack in Abiemnhom, which claimed over 200 lives, was reportedly anticipated through warnings weeks before it occurred.

A medical professional who survived alongside senior county officials later reflected that he would never again ignore such signals. These stories speak not only to the insecurity communities face, but also to a deeper crisis: a state that struggles to anticipate threats, respond effectively, or protect its citizens.

Yet this article is not about Abiemnhom. It is about the heartbreaking tragedy of mismanaged oil wealth — South Sudan’s supposed blessing that has too often become a silent curse.

Ongoing arrests have fueled allegations that some politicians and military leaders may have embezzled up to $2 billion in oil revenues. For a nation whose survival has depended heavily on oil, billions of dollars have flowed through the country. Yet ordinary citizens see little benefit.

Roads continue to crumble, hospitals remain under-resourced, and clean water is scarce. Communities in oil-producing areas bear the brunt of environmental degradation. In Unity and the Ruweng Administrative Area, children are reportedly born with deformities linked to pollution from oil operations. Livestock die from contaminated water sources. Meanwhile, billions of dollars are generated each year while these communities remain trapped in despair.

Over the past decade, multiple reports have exposed troubling patterns of financial mismanagement. A 2025 United Nations report alleged that approximately $1.7 billion was paid between 2021 and 2024 to companies linked to senior political figures for road contracts that were never delivered.

Similarly, a 2018 report by The Sentry documented more than $80 million in payments from the Nile Petroleum Corporation (Nilepet) between 2014 and 2015 categorized as “security expenses,” many of which were allegedly connected to actors involved in the civil war.

More recently, a Radio Tamazuj investigation revealed that a private digital payment platform had quietly been granted authority to manage multi-million-dollar oil levies, effectively controlling significant revenue streams without public transparency.

If properly managed, oil could dramatically transform South Sudan’s economy. At an average global price of $80 per barrel and production of approximately 110,000 barrels per day, daily revenue reaches about $8.8 million. This translates to roughly $264 million per month and approximately $3.17 billion annually.

For a country with a population of around 11 million people, such revenue — if transparently managed — could expand healthcare access, modernize agriculture, strengthen infrastructure, and reduce reliance on international assistance.

The opportunity is immense. Yet the failure to manage these resources responsibly has turned South Sudan’s oil wealth into a source of heartbreak rather than hope.

South Sudan’s oil sector itself is a complex web of state and foreign involvement. Nilepet, the fully state-owned enterprise, remains the primary custodian of national oil assets. However, most productive oil blocks are operated through partnerships with foreign firms, including Chinese and Malaysian companies that collectively control about 80 percent of the stakes.

While these partnerships bring technical expertise and investment, they also limit the government’s flexibility and the potential for equitable distribution of wealth. If left unregulated, current arrangements risk perpetuating systemic inequities — billions of dollars flowing out of the country while citizens are left with broken roads, underfunded schools, and polluted rivers.

The consequences of oil mismanagement are visible in neglected communities across the oil-producing regions. Yet hope lies not in abandoning the industry, but in reforming it.

Privatization, when implemented transparently and responsibly, can help transform this curse into a national blessing. In this context, privatization does not mean selling national oil resources. Rather, it means introducing transparent commercial management, competitive contracting, and independent oversight to ensure that the nation’s resources benefit its citizens.

Even with 80 percent of shares held by foreign partners, the government can still introduce meaningful reforms. These include competitive bidding for operational control, independent monitoring mechanisms, mandatory public disclosure of revenues, and legally binding environmental and social obligations for all operators.

International examples provide valuable lessons. Angola restructured its national oil company, Sonangol, by separating regulatory and operational functions and introducing transparent competitive bidding. Malaysia’s Petronas demonstrates how a state-owned enterprise can operate commercially while remaining accountable to parliament and the public. Meanwhile, Norway has built one of the world’s most successful models through Equinor and the Government Pension Fund Global, which channels oil revenues into a sovereign wealth fund that is transparently audited and invested for long-term national prosperity.

Several key principles emerge from these examples. Regulatory and operational roles must be clearly separated. Licensing processes must be competitive and transparent. Oil revenues should be remitted directly to the Central Bank. Production and sales data should be publicly disclosed. Parliamentary oversight should ensure accountability without interfering in day-to-day operations. Finally, a portion of oil revenues should be invested in stabilization or sovereign wealth funds to secure the future of coming generations.

In practical terms, these reforms could be overseen by an independent technical body composed of petroleum economists, environmental experts, legal scholars, and international advisors from experienced oil-producing nations.

Such a body would supervise contracts and operational compliance while safeguarding national ownership. All oil revenues should be wired directly to the Central Bank, publicly reported on a monthly basis, and subjected to quarterly independent audits.

Additionally, the constitutionally mandated three percent allocation to oil-producing communities must be transparently invested in tangible services such as schools, hospitals, clean water systems, and rural roads. These projects must be monitored by a fully independent oversight mechanism to ensure that funds reach the communities they are intended to serve.

South Sudan now stands at a crossroads. Oil can either remain a source of corruption, inequality, and heartbreak, or it can become a foundation for hope, development, and national unity.

The difference will be determined not by the oil itself, but by governance, transparency, and courage — the courage to place people above politics, citizens above contracts, and long-term national prosperity above short-term gain.

Every child born in Unity or Upper Nile, every farmer in Ruweng, and every citizen in Juba deserves more than the fleeting promise of oil wealth. They deserve a nation where natural resources fuel human dignity, opportunity, and sustainable development.

The real question is not whether oil is a blessing or a curse. It is whether South Sudan has the courage to transform it into a true blessing for its people.

Even the most well-crafted policy recommendations will fail if political leaders lack the will to implement them with integrity. Leadership must prioritize national interest over personal gain, transparency over secrecy, and the welfare of citizens over politically motivated deals.

Reform will remain impossible if opaque oil arrangements continue, if powerful figures in the sector are shielded from accountability, or if national wealth is siphoned away through favoritism.

True transformation requires courage, accountability, and a commitment to place South Sudan’s future above short-term profits and political expediency. Only then can the country’s oil move from a source of heartbreak to a foundation for hope, dignity, and sustainable development for all its people.

Garang Abraham Malak is a South Sudanese journalist and communications and public relations professional. His work has appeared in Eye Radio, Nation Media Group, The Continent, and the BBC, among others.