South Sudan has confirmed that Toyota Tsusho, the trading arm of the Japanese carmaker, will construct an oil pipeline from the landlocked nation to the Kenyan Port of Lamu.
According to South Sudan’s Commerce, Trade and Industry Minister, the decision came in the course of a meeting between President Salva Kiir and Toyota’s Chairperson, Junzo Shimizu, during the President’s visit in Japan.
“The President met and held talks with the Chairperson of the Japanese Toyota company and discussed number of issues. One of the things which were discussed was the construction of the alternative oil pipeline. The meeting was successful one. The Chairperson of the Toyota Company had accepted to construct the alternative oil pipeline to the Lamu port”, Garang Diing Akuong told local media.
The Minister did not, however, reveal how much money was required for construction of the new pipeline, estimated by the state-owned television to be around US$ 4 billion.
The proposed oil pipeline is expected to boost South Sudan’s oil export, given that the landlocked country solely relies on transport facilities that pass through a disputed border with neighbouring Sudan.
Last March, heads of states from Kenya, Ethiopia and South Sudan convened at Lamu, a Kenyan town on the Indian Ocean, to launch the construction of a port and oil pipeline thought to be costing up to US$ 16 billion. For South Sudan, the Lamu project is considered by many as the country’s best option for crude oil exports.
Following independence from Sudan, and continued disputes between the two neighbours over oil pipeline tariffs, South Sudan halted its oil production, which accounts for nearly 98% of the country’s annual budget, early last year. This prompted Africa’s youngest country to devise alternative ways of managing its oil resources.
Meanwhile, Akuong highlighted that Kiir also held separate talks with the Japanese Prime Minister, during which the South Sudan leader praised the co-operation between the two countries.
Kiir, the Minister noted, specifically thanked the Japanese government and its business groups for services extended to the new nation in the areas of humanitarian assistance and development.
Unlike China’s state-backed drive to secure resources and influence in Africa, Japan’s activity on the continent has been more fragmented.
Toyota Motor has a production hub in South Africa and Toyota Tsusho’s rivals – trading companies such as Sumitomo and Sojitsu – have mining and oil interests in other corners of the continent, but they have not backed large pipeline infrastructure projects.
Traditionally, Japanese funding for infrastructure has instead come in the form of government aid, which has given the country a very visible presence on the continent.