ANALYSIS | Is South Sudan’s “Gold for Roads” initiative another risky gamble?

JUBA – South Sudan’s decision to finance a $2 billion road construction initiative using gold reserves as collateral has reignited a familiar national debate: can resource-backed infrastructure deals truly deliver development?

Last week, the Council of Ministers, chaired by President Salva Kiir, approved the ambitious road plan and issued a sovereign guarantee to China’s Shamrock Global Group to construct and upgrade more than 1,031 kilometres of highways.

The proposed network will link Juba to Yei, Kaya, Lobonok, Wau, Raja, and other strategic towns, corridors critical to trade, security operations, and humanitarian access.

Government officials have described the initiative as transformative. Information Minister Ateny Wek Ateny said the total cost of the project is $2 billion, with an average of $2.3 million per kilometre.

According to the presidential press unit, the plan—proposed by Mining Minister Lasuba Ludoru Wongo—will leverage South Sudan’s gold as collateral to unlock financing and fast-track infrastructure development.

On paper, the logic is compelling. South Sudan possesses untapped mineral wealth but suffers from some of the weakest road infrastructure in the region. Large parts of the country remain cut off during the rainy season, hampering trade, raising food prices, and undermining state authority.

Roads are widely viewed as the backbone of economic growth and national integration. By pledging gold reserves, the government argues it is utilising dormant natural assets to build urgently needed public goods.

But the critical question remains: at what cost?

The cost of the project has already drawn scrutiny. Boboya James Edimond, CEO and Policy and Political Analyst at the Juba-based Institute of Social Policy and Research (ISPR), has raised concerns over the price per kilometre. At approximately $2.3 million per kilometre, the figure appears significantly higher than comparable projects in neighbouring countries.

For instance, Edimond say, Uganda’s Koboko–Yumbe–Moyo road project, spanning roughly 103–105 kilometres, was estimated at $130.8 million—about $1.25 million per kilometre. While terrain, security conditions, and engineering standards may differ, the comparison has fueled questions about whether the approved cost reflects competitive market rates.

The policy advocate has called for clarity on several key issues: “Was there an open and transparent procurement process? Has a detailed technical and financial feasibility study been made public? Does the agreement comply with South Sudan’s public procurement and value-for-money standards?”

These concerns are not emerging in isolation. South Sudan’s previous “Oil for Roads” initiative, which allocated crude oil shipments to finance infrastructure in partnership with foreign firms, remains a cautionary tale.

A September 2025 UN report alleged that between $1.7 billion and $2.2 billion in oil revenue was paid to companies affiliated with Vice President Benjamin Bol Mel for projects that were either incomplete or of poor quality. The episode weakened public trust and cast doubt on the effectiveness of resource-backed financing models.

The proposed “Gold for Roads” initiative inevitably invites comparison. Like oil before it, gold is being positioned as a shortcut to development. But the mineral sector itself faces structural weaknesses.

South Sudan lacks a comprehensive national geological survey to accurately determine the scale and quality of its gold deposits.

In December 2023, South Sudan signed a seven-year Integrated Systematic Geological Survey agreement with China’s Geological Exploration Technology Institute (GETI) to establish the value of the country’s minerals, starting from Western Bahr El Ghazal State. But according to reliable sources, this deal, valued at $70 million, has been cancelled for undisclosed reasons.

According to the South Sudan Cadastre Portal, which was decommissioned in December 2025, around 90 companies held exploration licenses across the country, yet none had secured a full mining license.

In practical terms, the government is leveraging anticipated future value from a sector that remains underdeveloped and largely informal. The country loses $270 million annually in gold smuggled to the United Arab Emirates, according to a SWISSAID report published in November 2025.

There are also broader governance concerns. Resource-backed loans and sovereign guarantees carry long-term fiscal implications. If gold production underperforms or global prices fluctuate, the burden may shift to public finances, increasing debt pressure on future generations, Edimond noted.

As provided for in the Mining Act, 2012, Mr Edimond argued that gold-producing communities must not be sidelined in any national resource-backed initiatives. Issues of environmental protection, land rights, and benefit-sharing remain sensitive.

Without meaningful consultation and transparent frameworks, the initiative, if it ever works, risks deepening local grievances instead of fostering inclusive growth.

At the same time, dismissing the project outright would ignore the country’s pressing infrastructure deficit. Functional roads could lower transportation costs, boost agricultural markets, enhance security mobility, and strengthen national cohesion. For a country emerging from cycles of conflict, infrastructure development is not merely economic—it is political and symbolic.

The real test, therefore, lies not in the ambition of the project but in its execution. Transparency, public accountability, competitive procurement, and independent oversight will determine whether “Gold for Roads” becomes a milestone of responsible resource governance—or another chapter in a troubled history of resource-backed promises clouded by graft.