South Sudan Economy Facts
South Sudan’s economy is entirely based on oil and aid, but for the individual resident, livestock management and cultivation for their own use is usually a prerequisite for survival. The oil can generate large income, but the country is one of the poorest and least developed in the world and the aid needs are enormous. The Civil War 2013–2015 put an end to all social and economic development, and suspicions of war crimes committed by the government side have severely weakened relations with donor countries.
The government in Juba faces the task of building a functioning economy after the end of the war in 2015. In accordance with the 2005 peace agreement (see Modern history) three-quarters of the old Sudanese oil sources attacked the new state of South Sudan, but in order to be able to sell its oil abroad, South Sudan is dependent on transporting it via pipelines through Sudan to the port of Port Sudan on the Red Sea. For this, South Sudan pays fees to the Khartoum government. There is conflict between the countries about how high the fees should be. The government of Juba said in early 2016 that the high fees combined with low oil prices meant that oil production actually cost the state money rather than bring in revenue. This is an extremely serious problem for South Sudan, as 86 percent of the state’s revenue came from oil recovery in the 2014/2015 financial year, as well as 99 percent of the 2013/2014 export value.
- Countryaah.com: Major imports by South Sudan, covering a full list of top products imported by the country and trade value for each product category.
Oil production began to fall already shortly after independence in July 2011. According to the government, oil production in November the same year had decreased by a quarter. The main reason was a lack of skilled labor. Many educated North Sudanese traveled back to their own land when the South broke away.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including SSPS which represents the country of South Sudan. Check findjobdescriptions to learn more about South Sudan.
Hard savings requirements and high inflation
Disputes with the neighboring country also led to interruptions in oil production. Sudan accused South Sudan of not paying its transport fees, while the government in Juba claimed that Khartoum self-seized South Sudanese oil or halted shipping from Port Sudan. The disagreement over transport costs led to South Sudan completely halting oil production between January and October 2012 and thus voluntarily curtailed the inflow to the Treasury. It was not until April 2013 before the oil could in practice start pumping up again. The oil stoppage, among other things, led to rapidly rising inflation, which the country still has not been able to overcome.
As a result of the problems in the oil industry, the government introduced tough savings programs in schools and healthcare, which affected the poor population. At the same time, more money was allocated to the defense and to modernize the rather god-forsaken capital of Juba.
South Sudan is completely dependent on foreign aid and loans. In 2012, South Sudan became a member of the International Monetary Fund (IMF) and received a three-year development loan from the same year. Prior to the outbreak of the war in 2013, countries such as the United States, the United Kingdom, Norway and the Netherlands were also important donors. As the reports of suspected war crimes increased in 2014, these countries declined to provide assistance and loans through the government in Juba. Instead, they channeled the money mainly through the UN and a number of aid organizations. South Sudan’s government has subsequently turned to a number of oil companies, China and Qatar for new money.
Before the outbreak of the civil war, trade was an important industry. Goods were imported from neighboring countries, mainly from Kenya and Uganda. For its imports, South Sudan is dependent on the port of Mombasa, Kenya, and the government has therefore shown great interest in Kenyan plans to build a new, complementary port in Lamu further north. From it, it is intended that a railway should be built through northern Kenya to South Sudan and Ethiopia. Before the war, the government had also allocated money to build a connecting line from Juba to a planned railway between Kenya and Uganda. All of these development plans were shelved by the outbreak of war in 2013 and it is uncertain what will become of them in the future.
South Sudan got its own central bank in 2006 and just over a week after independence a new currency, the South Sudanese Pound was launched. It was given a course that exactly corresponded to the Sudanese pound. At the same time, the President called on all residents with large assets abroad to take home their money and invest them in their home country.
While agriculture and livestock management are central to the livelihood of the vast majority of South Sudanese, the country’s industrial sector is in the immediate wasteland of the war. In addition to the oil industry, there are manufacturing factories for beer and other foods.
The negative effects of the civil war on the South Sudanese economy can hardly be exaggerated. The country’s economy is smashed. The three years of war can be described as lost years in terms of economic and human development. With millions of people fleeing the countryside where fighting has raged, agriculture has almost collapsed. Extensive food shortages have occurred and over half the population today is dependent on some form of help for their survival. Oil production was seriously damaged when rebels occupied oil wells. In March 2015, the UN expressed concern that the central bank was starting to print new banknotes to help the government fill the gaps in the state budget. This measure fueled the already high inflation. The short-term solution seemed to be new loans; In April 2015, the government announced that it had received a $ 500 million loan from Qatar.
FACTS – FINANCE
GDP per person
$ 283 (2016)
US $ 3,071 million (2016)
-11.2 percent (2016)
Agriculture’s share of GDP
11.4 percent (2016)
Manufacturing industry’s share of GDP
4.6 percent (2016)
The service sector’s share of GDP
68.0 percent (2016)
24.5 percent (2019)
Government debt’s share of GDP
42.2 percent (2018)
South Sudanese Pound
US $ 2,179 million (2017)
US $ 1,358 million (2017)
US $ 282 million (2017)
Main export goods
Largest trading partner
Kenya, Uganda, Sudan, China
Hundreds of dead in fighting in the south
SPLM’s military branch SPLA (later transformed into South Sudan’s regular army) clashes with a Khartoum-friendly militia in the southern city of Malakal. The fighting intensifies as the north side army moves in on the militia side. Hundreds of people, including civilians, are killed before fighting subsides.
South Sudan gets its own government
An SPLM-dominated government takes office in South Sudan with Salva Kiir Mayardit as president.
New federal government takes office
In accordance with the CPA Peace Agreement (see January 2005), the South Sudanese Party SPLM takes a seat in the Federal Government of Khartoum.
President Garang dies
South Sudan’s President John Garang, who was also the leader of the SPLM government party, perished in a helicopter crash. He succeeds on all posts by SPLM veteran Salva Kiir Mayardit, who, like Garang, belongs to the Dinka people. The death triggers rioting between North and South Sudanese in Khartoum.
SPLM leader Garang becomes president of South Sudan
The CPA peace agreement (see January 2005) and a transitional constitution enter into force. Southern Sudan thus gets internal self-government. South Sudanese guerrilla SPLM leader John Garang takes over as First Vice President of the Sudan Federation. Sudan’s incumbent President Omar al-Bashir remains in office. Garang also becomes president of southern Sudan, where the SPLM is transformed into a political party and forms government.
Peace agreement between northern and southern Sudan
The historic CPA (the Comprehensive Peace Agreement) is signed by the Sudanese government and the South Sudanese guerrilla SPLM / SPLA in Khartoum. The CPA agreement is the end point of nearly 22 years of civil war between northern and southern Sudan. The agreement is valid for a six-year transitional period from 1 July 2005. During the transitional period, Sudan shall be a federation between the northern and southern parts. The country should have a joint federal government and a joint president. In addition, each country end must have its own government and president. The agreement thus gives South Sudan autonomy and states that the SPLM will take place in a new federal government in Khartoum. Towards the end of the transition period, the inhabitants of the South shall be allowed to decide in a referendum whether they will remain in the federation or form an independent state.