Resources

South Sudan

South Sudan

Login required to download these files.

Key Facts

  • Capital: Juba
  • Region: East Africa
  • Official language: English
  • Independence Day: July 09, 2011
  • Area: 644,329 sq km
  • Population (2018): 11 million
  • REC membership: IGAD
  • WTO membership: Observer
  • GDP (2015): US$ 11.998 billion
  • GNI per capita (2015): US$ 1 130
  • Currency: South Sudanese Pound

Economic overview

Real GDP growth was an estimated 5.8% in 2019, a large increase from 0.5% in 2018. The 2019 rebound was driven mainly by reopening some oil fields, including those in Upper Nile state, and resuming production, and by the peace agreement signed in September 2018. The oil sector remains the key driver of the economy, followed by services and agriculture.

Inflation fell to 24.5% in 2019 from 83.5% in 2018 due to reduced financing of the fiscal deficit. The central bank commitment to reduce monetization of the fiscal deficit is expected to continue, with resulting inflation declining further to 16.9% in 2020 and 9.7% in 2021.

The 2019 state budget was estimated at $1.3 billion, a 155% increase from 2018. Non-oil revenue increased by an estimated 19% in 2019. The top two spending priorities are infrastructure (54%) and organized forces, including the military, police, prison, and fire-fighting services (14%). The fiscal deficit was estimated at 2.5% of GDP in 2019, down from 6.1% in 2018. Reforms will help move the fiscal deficit, projected at 1.3% of GDP in 2020, to a surplus of 0.5% in 2021.

The country is in debt distress, due to high and extra-budgetary spending. Financing the fiscal deficit, primarily through loans, has reduced debt sustainability with total debt at 41.7% of GDP in March 2019. The current account deficit widened to 6.4% of GDP in 2019 from 4.5% in 2018. Oil exports – crude oil accounts for more than 95% of exports – are expected to fund the current account deficit and boost foreign reserves. Private investment in the non-oil sector reached an estimated $22 million in 2019.

The outlook is positive, with real GDP growth projected at 7.4% in 2020 and 6.1% in 2021. Oil exports are expected to reach 180,000 barrels a day, which will boost foreign reserves, currently standing at 0.2 month of imports. Meanwhile, manufacturing will benefit from increased electricity supply. Education, mobile money, and water infrastructure are expected to improve. If peace holds, these improvements could give confidence to private investors. Foreign investment is expected to reach $30 million in 2020.

The government expects to increase non-oil revenue collection through the single treasury block account it has created for the National Revenue Authority. The account has improved transparency, established a baseline for forecasting revenue, and over the first six months collected about $36 million. The government plans several further reforms to increase revenue collection. A proposed increase in personal income tax by 5% and a business profits tax with an average new rate of 22% will also support revenue collection.

Structural challenges to economic transformation and sustainable development in South Sudan include the lack of economic diversification, high public debt, weak institutions, and political uncertainty. Fluctuations in global oil prices are a major risk to South Sudan. Commitment to the peace agreement will remain key for the stability of oil production, private investment, foreign exchange flows, and public investment in the critical sectors of health, education, and agriculture.

Education is expected to receive only 6% of the budget, and health 1%. Social and humanitarian affairs will receive only 2%. This de-emphasis of social spending is likely to erode social indicators and amplify the challenges of achieving the Sustainable Development Goals. The 6.4% average economic growth projected for 2019-21 is unlikely to be inclusive since it will be driven by oil rather than agriculture, where most people work. Youth unemployment (estimated at 19.5% in 2017) is a threat to peace and social stability.

Last updated: April 2020