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Republic of South Sudan, a new nation (the country was form on 9th July 2011) got a shot in the arm as one of the biggest and most dynamic economy in the world – China agree to provide South Sudan $8 billion (RM24.43 billion) in development loans over the next two years.

This was reveal by South Sudan’s government spokesman, Barnaba Marial Benjamin at a press briefing on 28th April 2012 following the South Sudan’s president Salva Kiir recent visit to China.

China, in October 2011, extended a grant of 200 million Yuan (about 31.5 million US dollars/RM96.21 milion) to South Sudan for development projects in the newly independent state.

The grant is dedicated to support agriculture, education, health and water supply projects.

The loans will be used for road construction, agriculture, hydroelectricity, infrastructure and telecommunications, which would be built by Chinese companies.

China also will consider an offer to finance an alternative oil pipeline to Kenya’s northern coast that would bypass Sudan’s pipelines.

South Sudan acquired three quarters of the formerly united nation’s 490,000 barrels of oil a day output when it declared independence on July 9.

The export pipelines and processing facilities remain in Sudan and the two countries have been unable to agree on fees for use of the infrastructure.

South Sudan lost 98 percent of its revenue when it halted production in January after accusing Sudan of stealing $850 million (RM2.6 billion) worth of its oil.

Through its oil giants, China National Petroleum Corp and Sinopec, the world’s most populated country is already the biggest investor in oilfields in South Sudan.

The South Sudan region has great potential for the generation of hydro electricity from the While Nile, and electricity from the alternative sources – solar, wind and natural gas. There is also opportunity for major projects in the region for generating solar power.

In the area of infrastructure, there are, at present, around 50 km of tarred roads in South Sudan. Most pre-existing roads are not interconnected. Expansion and interconnection of the roadwork and better linkages with the various regions are required.  This will facilitate economic activities in regions which have latent but vital economic potential.

At the end of the civil war and the signing of the Common Peace Agreement, South Sudan had practically no functioning industries or large agricultural initiatives in operation. Those in the public sector that had been functioning earlier had shut down during the conflict. The only industrial activities were brick, block and tile making, other construction, small agriculture, steel fabrication for making window frames and doors and a wide range of services for all day to day needs.

With the onset of peace and relative stability, the private sector has grown considerably. Competitiveness has been steadily increasing.

Outside oil exploration, there have been major activities in construction and infrastructure.

Besides, a number of hotels, restaurants and other services have come up. Now there are beer and mineral water bottling plants, roofing tile manufacturing, stone crushing, extensive brick and block making, poultry, cigarettes and fabrication work for the growing construction industry and infrastructure development.

Source : Bloomberg, Sudan Tribune, South Sudan Development Plan 2011-2013  and An Industrial Development Framework for South Sudan

(this article written for 1BINA.my)