South Sudan’s economy is projected to decline by 5 percent in 2024, a decrease from last year’s 7.0 percent growth, according to a new report from the African Development Bank (AfDB).
The report, released on July 31, 2024, and based on data collected between March and July 2024, attributes this decline to the disruption of oil flow caused by the ongoing war in Sudan.
Oil is crucial to South Sudan’s annual budget and government expenses.
The conflict in Sudan has severely impacted oil revenue, hindering South Sudan’s efforts to recover from its own internal conflicts and the slow implementation of the 2018 revitalized peace agreement.
Prepared by experts, including South Sudanese at the AfDB and relevant economic institutions, the report examines South Sudan’s macroeconomic performance.
At the launch of the report in Juba on Thursday, David Chan Thiang, a macroeconomist consultant with AfDB, noted that the ongoing civil war in neighboring Sudan has disrupted crude oil exports via Port Sudan.
“The real GDP is projected to contract by 5% in 2023-2024 due to reduced oil production following pipeline vandalization amid the conflict in Sudan,” he said. Thiang added that a 1% recovery is expected in 2024-2025 as oil production and exports stabilize.
Samuel Yanga Mikaya, the First Deputy Governor of the Bank of South Sudan, highlighted the report’s recommendations as a clear roadmap for addressing the economic crisis. “The report’s findings highlight the vast potential of our nation, with plentiful natural resources, a young and dynamic population, and a growing private sector. South Sudan is poised to embark on a transformative journey,” Mikaya said.
He also acknowledged the challenges ahead, including agricultural sector mainstreaming, infrastructure deficits, reforming the international financial architecture, and promoting people-driven economic growth.
The civil war in Sudan has severely disrupted oil exports, depriving South Sudan of crucial petrodollars. The oil pipeline, responsible for exporting 60% of South Sudan’s crude oil to international markets, was ruptured in February 2024 and remains unfixed due to its location in a conflict zone between Sudanese armed forces and paramilitary rapid support forces, restricting the activities of the technical team.
