South Sudan Country Profile – Economy

Last updated: 12 November 2020

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From Cia Factbook (Page last updated on October 09, 2020)

Economy – overview:

Industry and infrastructure in landlocked South Sudan are severely underdeveloped and poverty is widespread, following several decades of civil war with Sudan. Continued fighting within the new nation is disrupting what remains of the economy. The vast majority of the population is dependent on subsistence agriculture and humanitarian assistance. Property rights are insecure and price signals are weak, because markets are not well-organized.

South Sudan has little infrastructure – about 10,000 kilometers of roads, but just 2% of them paved. Electricity is produced mostly by costly diesel generators, and indoor plumbing and potable water are scarce, so less than 2% of the population has access to electricity. About 90% of consumed goods, capital, and services are imported from neighboring countries – mainly Uganda, Kenya and Sudan. Chinese investment plays a growing role in the infrastructure and energy sectors.

Nevertheless, South Sudan does have abundant natural resources. South Sudan holds one of the richest agricultural areas in Africa, with fertile soils and abundant water supplies. Currently the region supports 10-20 million head of cattle. At independence in 2011, South Sudan produced nearly three-fourths of former Sudan’s total oil output of nearly a half million barrels per day. The Government of South Sudan relies on oil for the vast majority of its budget revenues, although oil production has fallen sharply since independence. South Sudan is one of the most oil-dependent countries in the world, with 98% of the government’s annual operating budget and 80% of its gross domestic product (GDP) derived from oil. Oil is exported through a pipeline that runs to refineries and shipping facilities at Port Sudan on the Red Sea. The economy of South Sudan will remain linked to Sudan for some time, given the existing oil infrastructure. The outbreak of conflict in December 2013, combined with falling crude oil production and prices, meant that GDP fell significantly between 2014 and 2017. Since the second half of 2017 oil production has risen, and is currently about 130,000 barrels per day.

Poverty and food insecurity has risen due to displacement of people caused by the conflict. With famine spreading, 66% of the population in South Sudan is living on less than about $2 a day, up from 50.6% in 2009, according to the World Bank. About 80% of the population lives in rural areas, with agriculture, forestry and fishing providing the livelihood for a majority of the households. Much of rural sector activity is focused on low-input, low-output subsistence agriculture.

South Sudan is burdened by considerable debt because of increased military spending and high levels of government corruption. Economic mismanagement is prevalent. Civil servants, including police and the military, are not paid on time, creating incentives to engage in looting and banditry. South Sudan has received more than $11 billion in foreign aid since 2005, largely from the US, the UK, and the EU. Inflation peaked at over 800% per year in October 2016 but dropped to 118% in 2017. The government has funded its expenditures by borrowing from the central bank and foreign sources, using forward sales of oil as collateral. The central bank’s decision to adopt a managed floating exchange rate regime in December 2015 triggered a 97% depreciation of the currency and spawned a growing black market.

Long-term challenges include rooting out public sector corruption, improving agricultural productivity, alleviating poverty and unemployment, improving fiscal transparency – particularly in regard to oil revenues, taming inflation, improving government revenues, and creating a rules-based business environment.

GDP (official exchange rate): $3.06 billion (2017 est.)

GDP – per capita (PPP):

$1,600 (2017 est.)

$1,700 (2016 est.)

$2,100 (2015 est.)

note: data are in 2017 dollars

Population below poverty line: 66% (2015 est.)

Agriculture – products: sorghum, maize, rice, millet, wheat, gum arabic, sugarcane, mangoes, papayas, bananas, sweet potatoes, sunflower seeds, cotton, sesame seeds, cassava (manioc, tapioca), beans, peanuts; cattle, sheep

Industries: NA

https://www.cia.gov/library/publications/the-world-factbook/geos/od.html

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Other sources about South Sudan Economy

from World Bank

Currency: Sudanese pound

General Overview. 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 FY2018/19, 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 the 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 is a positive step towards the implementation of the peace deal.​​​​​​​

The World Bank. (2019). The World Bank in South Sudan. Based on data set released 2019-10-16 and accessed 2020-09-14 at http://elibrary.worldbank.org/action/showDataView?region=AF. Terms of use https://www.worldbank.org/en/about/legal/terms-and-conditions.

Other Economy sources:

https://www.worldbank.org/en/news/press-release/2020/04/02/south-sudan-economic-analysis-shows-growth-promise-amid-fragility

https://www.afdb.org/en/countries/east-africa/south-sudan/south-sudan-economic-outlook

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