Directions for Reform : A Country Economic Memorandum for Recovery and Resilience in South Sudan
South Sudan is at a crossroads in its recovery, reconstruction, and development. Having gained independence in 2011 after two protracted civil wars, the country twice relapsed into conflict: first in 2013 and again in 2016. While the economy began...
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| Format: | Report |
| Language: | English |
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Washington, DC: World Bank
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099040006102286710/P1691210fecb6b0ce09c300c0d1f63c6c08 http://hdl.handle.net/10986/37532 |
| Summary: | South Sudan is at a crossroads in its
recovery, reconstruction, and development. Having gained
independence in 2011 after two protracted civil wars, the
country twice relapsed into conflict: first in 2013 and
again in 2016. While the economy began to recover following
the 2018 peace deal, progress has stalled amidst a multitude
of crises – including the COVID-19 pandemic, climate shocks,
and dwindling oil production. At the same time, the
broad-based rise in commodity prices due to the war in
Ukraine have on balance affected South Sudan adversely. A
decade after independence, South Sudan remains caught in a
web of fragility and economic stagnation, with weak
institutions, recurring cycles of violence, and ubiquitous
poverty. Overall, the conflict is estimated to have cost
South Sudan an accumulated loss in aggregate GDP of some
US$81 billion during 2012 – 2018, equivalent to $11.6
billion per year on average (80 percent of 2010 GDP).
Consequently, South Sudan’s real GDP per capita in 2018 was
estimated at being one third of the counterfactual estimated
for a non-conflict scenario. With the fragile peace deal
largely holding despite challenges in implementation, the
authorities initiated an ambitious reform program aimed at
macroeconomic stabilization and modernization of the young
country’s public financial management systems. This report
discusses South Sudan’s economic performance since
independence, with a focus on leveraging the country’s
endowments of natural capital – oil and arable land – to
support recovery and resilience. Three messages emerge from
this report. First, there is a peace dividend in South
Sudan. South Sudan’s real GDP per capita in 2018 was
estimated at one third of the counterfactual estimated for a
non-conflict scenario. Thus, maintaining peace can by itself
be a strong driver of growth. Second, with better governance
and accountability, South Sudan’s oil resources can drive
transformation. Third, South Sudan’s chronic food insecurity
could be reversed with targeted investments to improve the
resilience of the agricultural sector. |
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