COUNTRY ANALYSIS Developing Capacities for Trade Integration and Economic Diversification
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REPUBLIC OF SOUTH SUDAN DIAGNOSTIC TRADE INTEGRATION STUDY Developing Capacities for Trade Integration and Economic Diversification October 2014 TABLE OF CONTENTS Acronyms ................................................................................................................................................. v Foreword ................................................................................................................................................ vii Acknowledgements .............................................................................................................................. viii Executive Summary ................................................................................................................................ ix South Sudan - Action Matrix .............................................................................................................. xxxii Introduction ..............................................................................................................................................1 Chapter I - Country context, poverty and macroeconomic issues...........................................................3 1.1 Country Background ........................................................................................................................ 3 1.2 Poverty ............................................................................................................................................. 5 1.3 Macroeconomic environment: recent developments .................................................................... 10 1.4 Outlook and issues arising ............................................................................................................... 13 Chapter II - Trade Policy ....................................................................................................................... 18 2.1 Introduction ..................................................................................................................................... 18 2.2 Structure and value of trade .......................................................................................................... 18 2.3 Trade regime ................................................................................................................................... 22 2.4 Policy issues and options ................................................................................................................. 27 2.5 Conclusions ...................................................................................................................................... 33 2.6 Recommendations........................................................................................................................... 34 Chapter III - Trade Facilitation .............................................................................................................. 36 3.1 Customs and related procedures .................................................................................................... 36 3.2 Infrastructure and linkages ............................................................................................................. 40 3.3 Technical Regulations and product standards ................................................................................ 46 3.4 Recommendations........................................................................................................................... 48 Chapter IV - Institutional Capacity development .................................................................................. 51 4.1 Introduction ..................................................................................................................................... 51 4.2 Medium-Term Capacity Development Strategy .............................................................................. 51 4.3 Ministry of Trade, Industry and Investment (MTII) ......................................................................... 52 4.4 Other ministries with trade-related functions ................................................................................ 60 4.5 States ............................................................................................................................................... 62 4.6 Private sector and tertiary education.............................................................................................. 64 4.7 Donor capacity-building activity ...................................................................................................... 67 4.8 Conclusions and overall assessment ............................................................................................... 68 4.9 Recommendations........................................................................................................................... 69 Chapter V - Business Environment and Cross-cutting Issues ............................................................. 74 ii 5.1 Introduction ..................................................................................................................................... 74 5.2 Governance ..................................................................................................................................... 76 5.3 Business environment ..................................................................................................................... 80 5.4 Cost and quality of factors............................................................................................................... 83 5.5 Taxation ........................................................................................................................................... 87 5.6 Trading across borders .................................................................................................................... 89 5.7 Investment Climate ......................................................................................................................... 89 5.8 Recommendations........................................................................................................................... 96 Chapter VI - Revitalizing Agriculture .................................................................................................. 100 6.1 Agro-ecological environment and agricultural prospects ............................................................. 100 6.2 Agricultural policy and regulatory framework .............................................................................. 110 6.3 Value chain development to increase agricultural productivity ................................................... 111 6.4 Recommended programmes and actions ..................................................................................... 116 Chapter VII - Energy ........................................................................................................................... 121 7.1 The institutional and legal frameworks ......................................................................................... 121 7.2 The upstream oil and gas sector ................................................................................................... 125 7.3 Transportation of hydrocarbons: alternatives to Sudan’s pipeline............................................... 132 7.4 Strengthening the supply of petroleum derivatives ..................................................................... 134 7.5 Monetization of natural gas: Small scale electricity generation, an alternative to gas flaring ..... 138 7.6 Electricity ....................................................................................................................................... 139 Chapter VIII – The mining sector in South Sudan .............................................................................. 145 8.1 Introduction ................................................................................................................................... 145 8.2 Assessment of South Sudan’s mining potential ............................................................................ 147 8.3 Mineral sector baseline ................................................................................................................. 153 8.4 Tax and royalty regime .................................................................................................................. 157 8.5 Mineral titles licensing .................................................................................................................. 159 8.6 Current and planned programmes of support to the mining sector ............................................ 161 8.7 Building the foundations for mineral sector growth ................................................................... 161 Chapter IX – Towards Inclusive tourism ............................................................................................. 166 9.1 Introduction ................................................................................................................................... 166 9.2 Characteristics of tourism in South Sudan .................................................................................... 167 9.3 Resource inventory........................................................................................................................ 169 9.4 Regulatory and enabling environment for tourism .....................................................................