Impact of oil extraction on the livelihoods of local communities and sustainable development in South Sudan : the case of Unity State

Abstract

Oil explorations and activities in South Sudan and elsewhere have failed to improve the welfare of their host communities and have contributed adversely to the impact on traditional livelihood assets of the local community, such as pollution and displacement of the local communities in the rural villages of Unity State. This study examines the impacts of oil exploration and production activities on the livelihood assets of local communities as well as sustainable development in this State. The study employs the Sustainable Livelihood Framework and Sustainable Budget Index (SBI) approaches to analyse the level of community vulnerability as the result of oil production and management of oil revenues and expenditures. Survey data were collected from three counties across the five villages adjacent to the oil fields in an attempt to understand the local population’s perceptions regarding oil exploration in these areas. Approximately 150 households were interviewed by means of a structured questionnaire. Secondary data for oil revenue and expenditure were obtained from Ministry of Finance and Economic Planning as well as from the Nile Petroleum Corporation.

The results of the survey provided the empirical evidence that oil exploration and activities have severely affected the traditional sources of livelihood of the local communities in this State. The findings revealed that local communities in Unity State adjacent to the oil fields are vulnerable at 0.42 in terms of their livelihood assets, due to oil extraction. These vulnerabilities included access to and availability of clean water, pollution of the environment and sanitation services in the villages, access to land for agriculture and livestock grazing. The findings revealed that oil exploration failed to improve rural communities’ access and availability to loans, education, electricity, health services, transport and clean water. Furthermore, the results indicated that 49% of the households were displaced from their original places by oil extraction. The results revealed a high level of poverty in the State. With regard to the issue of sustainable development, the study found that 98% of South Sudan revenues came from oil revenues over the period 2005 to 2012. Of the South Sudan expenditures: 33% of total government expenditures in this time frame went to salaries and wages; approximately 32% were allocated to operations and only 16% of South Sudan expenditures in this period were allotted to states. Similarly, projects and developments were allocated only 1% of the government expenditures. In terms of sectors’ expenditures: the security sector received the lion’s share with approximately 36% of government expenditure being allocated to security during the abovementioned time frame as compared to education, health, infrastructure and natural resources and rural development. It is concluded that oil exploration and production in Unity State posed negative threats to the livelihoods of the local communities and that the management and expenditure of South Sudan oil revenue is unsustainable. This situation calls for urgent action to reduce damage and look to the future. It is recommended that oil companies should compensate affected local population and invest in the local project which can improve the livelihoods of local communities, such as education, health, water road and so forth. On the oil revenue management and spending, the study recommends that South Sudan should invest oil revenue in to productive sectors to achieve sustainable development and to allow both current and future generations to benefit equally from oil revenue.