USAID-South Sudan Partnership

Last week, parliaments in Khartoum and Juba ratified a historic border and oil deal recently signed by the governments of Sudan and South Sudan. Following ratification of the agreement, on Thursday, the South Sudanese government instructed oil companies in the country to resume oil production. In January 2012, Juba had halted oil production amid a dispute with Khartoum over oil transit and processing fees. Oil production accounts for 80 percent of South Sudan’s economy. Yet while South Sudan’s impending resumption of oil exports has calmed fears of an economic collapse, the country continues to face serious development challenges. Still reeling from two decades of conflict with the North, South Sudan’s human development indicators are among the worst in the world. Over half of the South Sudanese population live below the poverty line. And even as Juba has maintained a tentative peace with Khartoum since their 2005 Comprehensive Peace Agreement, in parts of South Sudan, interethnic violence has spiked in recent years. The U.S. Agency for International Development has provided bilateral assistance to South Sudan since the 1980s. Over the last decade, USAID has helped facilitate the Sudanese north-south peace process which laid the groundwork for South Sudan’s independence last year. And in December 2011, the United States hosted the International Engagement Conference for South Sudan which mobilized pledges of assistance for the country from donors including the United Kingdom, Norway, Turkey and the European Union. In its 2011-13 Transition Strategy for South Sudan, USAID reaffirms Washington’s continued support for the world’s youngest nation. The document states that the overarching goal of USAID programming in South Sudan during the period following its independence is to foster stability in the country. According to USAID, the agency will also release a country development cooperation strategy for its long-term engagement in South Sudan. Funding levels For fiscal 2013, U.S. President Barack Obama has requested $426.6 million in U.S. foreign assistance to South Sudan, down nine percent from current levels. South Sudan is expected to remain among the ten largest recipients of U.S. foreign aid in sub-Saharan Africa. In 2010, USAID delivered 97 percent of U.S. official development assistance to the then-unified Sudan. Funding priorities (fiscal 2013 request) For fiscal 2013, the democracy, human rights, and governance sector is slated to garner the largest portion (22.4 percent) of U.S. foreign assistance to South Sudan. According to USAID, the agency’s governance programming in South Sudan aims to achieve the following objectives: - Maintaining or enhancing political competition - Strengthening core government institutions - Increasing citizens’ engagement with government institutions - Supporting participatory constitutional development USAID intends to address governance issues at both the national and sub-national level. The Obama administration has called the consolidation of South Sudan’s democratic institutions the “biggest governance challenge” in Africa. Meanwhile, only narrowly behind the democracy, human rights, and governance sector, peace and security programming has been allocated 22.1 percent of the fiscal 2013 U.S. foreign aid budget request for South Sudan. USAID asserts that managing and mitigating drivers of conflict will be critical to achieving an enduring stability in the country. In the short term, flexible, quick-impact conflict mitigation efforts in flashpoint areas will be a priority intervention for USAID in South Sudan. For fiscal 2013, the agriculture sector is slated for only 7.9 percent of U.S. foreign aid spending in South Sudan. South Sudan is not currently a focus country for Feed the Future, the Obama administration’s global hunger and food security initiative, which emphasizes country-led agricultural development. USAID’s transition strategy for South Sudan, however, suggests that U.S. foreign assistance to the agriculture sector may increase in the near future. The strategy calls attention to the potential of agricultural development to diversify the country’s oil-based economy and expand economic opportunities for South Sudanese. USAID officials, including the agency’s administrator Rajiv Shah, have previously pledged to bolster investments to jumpstart agricultural growth in South Sudan. USAID recently designed the first-ever credit guarantee in the country to support local lending to key agricultural aggregators, input suppliers, entrepreneurs, and other small-scale businesses in the agriculture value chain. Devex analysis Underpinned by both humanitarian and strategic considerations, the United States’ development partnership with South Sudan is likely to remain strong for the foreseeable future. Amid pressure from some of the most prominent U.S. anti-poverty groups, lawmakers on both sides of the aisle continue to support the USAID program in the country. In August 2012, Congress also overwhelmingly passed legislation which extended trade benefits to South Sudan. Echoing commitments by the Obama administration, Republican presidential candidate Mitt Romney has pledged to further deepen ties between Washington and Juba. However, allegations of high-level corruption in the South Sudanese government have recently sparked fears that U.S. aid dollars for the country may be misused. In May 2012, South Sudanese President Salva Kiir accused 75 senior government officials of plundering at least $4 billion in state revenues. Sen. Patrick Leahy, D-Vt., chair of the Senate’s influential state and foreign operations subcommittee, has called upon the State Department to probe these allegations. Last year, the United States, among other donors, had expressed concerns to Kiir over the potential mismanagement of foreign assistance to the country.