South Sudan: Inside the Oil Ministry’s Shadow Economy

Summary

As 7.7 million South Sudanese face hunger, billions of dollars in oil revenues are disappearing into a system no longer under government control. At the centre of this opaque network stands Deng Lual Wol, the powerful Undersecretary of the Ministry of Petroleum, now widely viewed as the country’s de facto “oil czar.”

Recent evidence suggests that nearly all oil income—representing 85–90% of South Sudan’s national revenue—is being diverted through off-book trading arrangements, bypassing both the Ministry of Finance and the Central Bank. The system’s complexity shields high-level elites while deepening the country’s humanitarian collapse.

A Ministry Operating Beyond Oversight

What was once a key national institution has turned into a state within a state.

• The Ministry of Finance has been cut off from export data and no longer receives official reports on output, prices, or destinations of crude sales.
• The Central Bank, deprived of incoming foreign currency, reports severe shortages, triggering the collapse of the South Sudanese pound.
• The Ministry of Petroleum has not published an annual report since May 2021, leaving a complete blackout in public financial transparency.

According to a senior government insider, “never in the country’s history has the Petroleum Ministry been so powerful—free of all supervision or accountability.”

An UN Human Rights Commission report (September 2025) exposes the scale of this system:

US $23 billion in oil revenue since 2011, plus US $2.2 billion in oil-backed loans — a total of US $25.2 billion, the use of which “remains almost entirely opaque.”

The Disappearance of Global Traders

Major trading houses such as Glencore, Vitol, and Trafigura have withdrawn from South Sudan’s market, citing unmanageable risk and pervasive corruption. In their place have emerged little-known intermediaries with no proven track record in global oil trading.

One such firm, Euro American Energy, led by Sudanese businessman Idris Taha, has quietly assumed control over a significant share of South Sudan’s crude exports. Unlike reputable global traders, the company does not use pre-payment systems—meaning revenue flows are untraceable and delayed, with no assurance that funds ever reach state accounts.

Online investigations and social media leaks accuse Deng Lual Wol and businessman Benjamin Bol Mel of orchestrating these arrangements, channelling proceeds into off-market deals and foreign private accounts.

The UN report corroborates these concerns, noting that:

“Tender processes, when they occur, are manipulated, and cargoes often end up in the hands of politically connected traders, including entities active in trade with sanctioned jurisdictions.”

Meanwhile, South Sudan owes over US $509 million in unpaid pipeline transit fees to Sudan, further straining relations with Khartoum.

The Fall of the Last Oversight Figure

Until recently, one figure maintained a degree of discipline in the oil sector: General Manasa Machar Bol. Known for his fearsome reputation and control over export logistics, he represented the last institutional check within the Ministry.

Following months of internal friction, Machar Bol was dismissed—reportedly under pressure from Deng Lual Wol’s faction. His removal marks the final collapse of military oversight in a sector once considered untouchable, leaving the petroleum ministry entirely autonomous.

Human and Economic Consequences

While billions vanish, South Sudanese citizens face catastrophic conditions:

• 7.7 million people in acute food insecurity
• 2.3 million malnourished children
• 92% of the population living below the poverty line
• Civil servants unpaid for over a year; soldiers awaiting salaries in barracks

The health sector, legally entitled to 2.5% of the national budget, received only 0.7% in 2023–2024. Education, which should receive 10%, got 1.5%. In contrast, more funds were allocated to the Presidential Medical Unit than to the entire public healthcare system.

The “Oil for Roads” infrastructure program—budgeted at US $2.2 billion since 2020—has delivered less than 5% of the contracted works. The UN calculates that US $1.7 billion remains unaccounted for, likely absorbed into private or “off budget” funds.

Oversight institutions are incapacitated:

• The Anti-Corruption Commission was evicted for non-payment of rent (its budget represents 0.01% of state expenditure).
• The National Audit Chamber operates on 0.09% of the budget.

A State Captured

The UN Commission concludes bluntly:

“South Sudan has been captured by a predatory elite that has institutionalized the systematic looting of national wealth.”

It adds:

“Unless corruption is addressed at its root, the government will remain unable to meet even the most basic needs of its citizens.”

For many citizens, the ultimate symbol of betrayal lies in the faces of those controlling the oil sector. Deng Lual Wol, once a technocrat, now embodies what critics call the “privatization of the state.”

Social media has amplified public outrage. Viral posts echo a single demand:

“South Sudan’s oil should feed the people — not fund private deals.”

ASSESSMENT:

• Governance Risk: The Petroleum Ministry functions autonomously, circumventing fiscal and monetary institutions. No transparency mechanisms remain effective.
• Economic Outlook: With export revenues off-book and debt repayments mounting, currency depreciation and budget paralysis will deepen.
• Political Stability: The military’s exclusion from the petroleum chain removes an internal check but increases the risk of factional defection or coup pressure if salaries remain unpaid.
• Regional Implications: Growing arrears to Sudan may escalate border tensions, while opaque oil sales could expose South Sudan to secondary sanctions.
• Humanitarian Outlook: Continued diversion of oil funds ensures worsening famine, displacement, and health collapse.

Fourteen years after independence, South Sudan remains trapped in the paradox of oil wealth and human misery. The petroleum sector—once seen as the nation’s economic foundation—has become its primary instrument of decay.

As one parliamentarian lamented:

“Every dollar stolen is a child who dies of hunger, a woman who dies in childbirth, a student without a future.”

Reclaiming the state’s most vital resource is no longer an economic question—it is a matter of national survival.