South Sudan: Economic Outline

Economic Indicators

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After decades of conflict, South Sudan became an independent state in 2011 but has continued suffering from social unrest and economic crisis: although the peace agreement signed in September 2018 was expected to re-establish long-lasting social peace and economic stability, such expectations were not met. The formation of a unity government (February 2020), the reconstitution of the Transitional National Legislative Assembly (August 2021), and the unification of the army’s command structure (April 2022) represent significant steps towards its implementation, but progress has been slower than expected. The country’s economy was hit hard by the global Covid-19 pandemic, locust invasions, falling oil prices and three consecutive years of extensive floods. After contracting by -6.5% in 2020, GDP growth rebounded to 5.3% in 2021 and 6.5% in 2022 boosted by higher oil prices. According to IMF estimates, economic growth is expected to accelerate to 5.6% in 2023 before easing to 4.6% the following year.

The economy remains excessively reliant on oil, which accounts for nearly all exports and over 90% of government revenue. According to the latest figures from the IMF, public debt decreased from an estimated 64.2% of GDP in FY 2020/21 to 53.8% the following year, thanks to the positive performance of the hydrocarbon sector. Over the forecast horizon, the IMF foresees a gradual debt decrease (to 45.3% by 2024) owing to nominal GDP growth and fiscal consolidation efforts. The government budget balance was in deficit by 6.6% of GDP in FY2021/22, but it is expected to turn positive from FY2022/23 onwards (+3% and +6.8% in the two next fiscal years). The government has continued to refrain from monetary financing of the deficit and non-concessional borrowing. Monetary discipline and the stable exchange rate have also arrested inflation: after averaging 30.2% in 2021, it was contained to 17.6% last year, despite the increase in global food prices. In the medium term, inflation is projected to decline into single digits, provided money growth remains prudent (IMF). In March 2023, the International Monetary Fund's Executive Board gave the green light for the allocation of SDR 86.1 million (roughly equal to USD 114.8 million) to South Sudan through the Rapid Credit Facility's (RCF) Food Shock Window aimed at supporting the country in tackling food insecurity. In addition to preserving macroeconomic stability, the authorities remain committed to strengthening governance and implementing public financial management reforms to tackle a legacy of non-concessional external debt. The peace agreement and the opening of four border crossings with Sudan are vital opportunities for reviving an economy that is not yet well-organised and largely dependent on Sudan. The country still has few asphalts routes and poor access to electricity and drinking water. Key challenges include peace and security concerns (ongoing conflicts in the Blue Nile, Darfur, and South Kordofan states), institutional and human capacity weaknesses, oil dependency, underdeveloped industry and infrastructure, vulnerability to climate change and widespread poverty.

The economic crisis has led to an acute deterioration in humanitarian conditions. About 70% of the population was severely food insecure in 2022 according to the World Food Programme (WFP), nearly 2 million people are displaced within the country, and over 2 million live as refugees abroad. Real disposable income is estimated to have declined by about 70% since independence in 2011, contributing to an increase in the poverty rate from 50% in 2012 to about 82% in 2021 (World Bank). Moreover, South Sudan has one of the lowest adult literacy rates in the world (35%). According to the World Bank, the unemployment rate stood at 13.5% in 2022, down from 13.7% one year earlier but still above the pre-pandemic level (12.2%). In 2023, the country’s GDP per capita was estimated at USD 516 by the IMF, the lowest in the world.

Monetary Indicators	2016	2017	2018	2019	2020
South Sudanese pound (SSP) - Average Annual Exchange Rate For 1 GHS	12.38	26.52	30.83	n/a	28.74

Source: World Bank - Latest available data.

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Latest Update: September 2023