The Republic of South Sudan became the world’s newest nation and Africa’s 55th country on July 9, 2011, following a peaceful secession from the Sudan through a referendum in January 2011. As a new nation, South Sudan has the dual challenge of dealing with the legacy of more than 50 years of conflict and continued instability, along with huge development needs. South Sudan also has significant oil wealth, which if effectively used to drive development, could provide the basis for progress in the coming years. When conflict broke out December 2013, core administrative structures and mechanisms of political representation were emerging, and the government was beginning to provide basic services to the population. A peaceful resolution to the conflict has not yet been achieved.
Although South Sudan has vast and largely untapped natural resources, beyond a few oil enclaves it remains relatively undeveloped, characterized by subsistence economy. South Sudan is the most oil-dependent country in the world, with oil accounting for almost the totality of exports, and for around 60% of its gross domestic product (GDP). On current reserve estimates, oil production is expected to reduce steadily in future years and to become negligible by 2035.
The country’s GDP per capita in 2013 was $1081. Outside the oil sector, livelihoods are concentrated in low productive, unpaid agriculture and pastoralists work, accounting for around 15% of GDP. In fact, 85% of the working population is engaged in non-wage work, chiefly in agriculture (78%). Since late 2014, the decline in the oil price has further exacerbated the economic hardship of South Sudan.
It is estimated that the current conflict has cost up to 15% of the potential GDP in 2014. Military expenditure has increased, jeopardizing the availability of resources for service delivery and capital spending on much needed infrastructure. A more prolonged conflict would also impact negatively on the 2015 harvest, further reducing non-oil GDP in 2015. Oil production has fallen by around 20% due to the conflict. The recent decline in oil prices from $110 per barrel to $55 per barrel has further aggravated the losses of oil revenue and has had a negative impact on macro-budgetary indicators, requiring painful fiscal adjustments. The lower oil prices and reduced output creates a fiscal deficit of 4.5 bn SSP (1.5 bn or 10% of GDP) from a budget plan surplus of SSP 443 million. The current account has deteriorated considerably leading to depreciation of the parallel exchange rate and fueling inflation. The low level of foreign reserves can negatively affect food imports with further knock on effects on food intakes, notably during the “lean season,” which runs between April and October. The incidence of poverty has also worsened, from 44.7% in 2011 to more than 57.2% in 2015, with a corresponding increase in the depth of poverty.
South Sudan, with an estimated population of 10.9 million and an area covering 644,329 sq. km, is roughly the size of France, but with just under one-third of the population, giving it a population density that is less than one tenth of neighboring Uganda. The country is very young with two-thirds of the population under the age of 30. Almost 83% of South Sudanese resided in rural areas before the outbreak of the recent conflict, which has displaced nearly 2 million people.
Only 27% of the population aged 15 years and above is literate, with significant gender disparities: the literacy rate for males is 40% compared to 16% for females. The infant mortality rate is 105 (per 1,000 live births), maternal mortality rate is 2,054 (per 100,000 live births), and only 17% of children are fully immunized. Fifty-five percent of the population has access to improved sources of drinking water. Around 38% of the population has to walk for more than 30 minutes one way to collect drinking water. Some 80% of South Sudanese do not have access to any toilet facility.
The government began earnestly working on the development of Southern Sudan (as it was then known) after the signing of the Comprehensive Peace Agreement (CPA) in July 2005, with the support of development partners. However, the task was extremely challenging with large parts of the country remaining isolated for up to six months of the year due to the rainy season and poor road conditions which made access close to impossible. Nevertheless, the country had begun to post improved results, particularly in health and primary education in the years following the 2005 CPA, and the resumption of oil flows in 2013 was expected to boost economic growth significantly. However, the impact of the conflict on the population and the breakdown in services has deep economic and social consequences for a country where human development is already among the worst in the world.
Last Updated: Mar 05, 2015