The Republic of South Sudan became the world’s newest nation and Africa’s 55th country on July 9, 2011. Renewed conflicts in December 2013 and July 2016 have undermined the development gains achieved since independence and worsened the humanitarian situation.
South Sudan remains in a serious humanitarian crisis due to the cumulative effects of years of conflict which has destroyed people’s livelihoods and forced 4.2 million people to flee their homes – nearly two million inside and nearly 2.2 million outside the country. Extreme levels of acute food insecurity persist across the country and number of people who require humanitarian assistance in 2019 remains at seven million (more than half of the population) and women and children continue to be the most affected.
South Sudan is one of the most oil-dependent countries in the world, with oil accounting for almost the totality of exports, and more than 40% of its gross domestic product (GDP). The country’s GDP per capita in 2014 was $1,111 dropping to less than $200 in 2017. Outside the oil sector, livelihoods are concentrated in low productive, unpaid agriculture and pastoralists work. Coupled with economic mismanagement, many years of conflict have eroded the productive capacity of the country.
With consumption, non-oil exports, and investment declining, oil production provides the immediate sources of growth in South Sudan. While the rehabilitation of oil fields and resumption of oil production are underway, oil production is not expected to reach pre-crisis levels in the short term. The economy is estimated to have recovered with a growth rate of 3.2% in FY 2018/19, from a contraction of 3.5% during FY2017/18. Inflation averaged 60.8% during FY2018/19 from 121.4% during FY 2017/18. The gap between the official exchange rate and the parallel market rate remains high and increased from 65% in December 2018 to 85% in June 2019. The external sector current account deficit, excluding grants, rose to 6.5% of GDP during FY2018/19 from 4.5% in FY 2017/18
South Sudan continues to under-invest in sectors that would have the largest knock-on effect on poverty reduction and building resilience, with expenditures skewed toward defense and security. Consequently, poverty levels are expected to remain extremely high on the back of severe food insecurity and limited access to basic services across the country. About 82% of the population in South Sudan is poor according to the most recent estimates, based on the $1.90 2011 purchasing power parity (PPP) poverty line.
The main challenge going forward is to ensure sustainability of peace and security in the country. Whereas parties to the September 2018 peace deal agreed to extend the timeline for the formation of a transitional power-sharing government from May to November 2019, little progress has been achieved on key milestones such as the unification of the army and on the number and boundaries of states the country should be divided into. A recent high-level meeting between the two main parties to the conflict and public commitments to continue the dialogue to find solutions on outstanding issues are a positive step towards the implementation of the peace deal.
Last Updated: Oct 16, 2019
