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29.04.2012, 00:49 BBC News.co.uk

South Sudan 'agrees $8bn deal with China'

South Sudan 'agrees $8bn deal with China'

Officials in South Sudan say China has agreed to loan it $8bn (£4.9bn) for major development projects.

A government spokesman said funds would be used to build roads, bridges and telecom networks, and to develop agriculture and hydro-electric power.

However, there was no mention of plans to build a new pipeline to export oil from the newly independent state.

News of the deal emerged after South Sudan's president returned from his first official trip to China.

His visit came amid a flare-up in the dispute between the two Sudans over the oil-rich Heglig border region.

China imports the bulk of oil output from the two countries.

It wants to maintain good relations both with Sudan - a long-time ally - and with the South, which acquired the lion's share of the region's oil production when it seceded in July 2011 after decades of conflict.

Since then, South Sudan's relations with Sudan have been tense - primarily over the division of oil reserves and the full definition of borders.

South Sudan Information Minister Barnaba Mariel Benjamin told the BBC's Focus on Africa programme that the Chinese wanted to help develop the country.

"There are no strings attached to it," he said.

"You know we are beginning from zero but we have enormous resources. At least [if] the resources are developed, I'm sure it will be for the benefit of the people of South Sudan, and the region and internationally."

The Chinese funding would be provided over the coming two years, and projects would be conducted by Chinese firms.

In January, South Sudan shut down oil production, which provides 98% of its revenue, after Khartoum impounded South Sudanese oil shipments amid a dispute over transit fees.

It currently relies on pipelines to seaports in Sudan to export the oil. It is proposing a new pipeline that would take oil to an Indian Ocean port rather than north to Sudan.

Both Sudan and the South are reliant on their oil revenues, which account for 98% of South Sudan's budget. But the two countries cannot agree how to divide the oil wealth of the former united state. Some 75% of the oil lies in the South but all the pipelines run north. It is feared that disputes over oil could lead the two neighbours to return to war.

Although they were united for many years, the two Sudans were always very different. The great divide is visible even from space, as this Nasa satellite image shows. The northern states are a blanket of desert, broken only by the fertile Nile corridor. South Sudan is covered by green swathes of grassland, swamps and tropical forest.

Sudan's arid north is mainly home to Arabic-speaking Muslims. But in South Sudan there is no dominant culture. The Dinkas and the Nuers are the largest of more than 200 ethnic groups, each with its own languages and traditional beliefs, alongside Christianity and Islam.

The health inequalities in Sudan are illustrated by infant mortality rates. In South Sudan, one in 10 children die before their first birthday. Whereas in the more developed northern states, such as Gezira and White Nile, half of those children would be expected to survive.

The gulf in water resources between north and south is stark. In Khartoum, River Nile, and Gezira states, two-thirds of people have access to piped drinking water and pit latrines. In the south, boreholes and unprotected wells are the main drinking sources. More than 80% of southerners have no toilet facilities whatsoever.

Throughout the two Sudans, access to primary school education is strongly linked to household earnings. In the poorest parts of the south, less than 1% of children finish primary school. Whereas in the wealthier north, up to 50% of children complete primary level education.

Conflict and poverty are the main causes of food insecurity in both countries. The residents of war-affected Darfur and South Sudan are still greatly dependent on food aid. Far more than in northern states, which tend to be wealthier, more urbanised and less reliant on agriculture.

Resources: South Sudan 'agrees $8bn deal with China'