The humanitarian and economic crises in South Sudan are intensifying due to the ongoing conflict in Sudan, which has inhibited oil production and severely affected the country’s economy. With rising inflation and ongoing food insecurity, the government’s recent election postponement and reliance on monetary financing pose further risks to stability.
The humanitarian crisis in South Sudan has been exacerbated by the ongoing conflict in neighboring Sudan, further worsening the country’s macroeconomic stability. Since February 2024, a crucial pipeline facilitating 70 percent of South Sudan’s oil production has been out of operation due to repairs hampered by access restrictions. This disruption has severely impacted the nation’s economic growth, leading to decreased exports, fiscal revenues, and foreign exchange inflows. In response to these economic shocks, the government has encountered significant challenges, including soaring inflation, depreciation of the parallel exchange rate, and increasing difficulties in budget financing. The lapse in alternative funding options led to the accumulation of salary arrears and reliance on monetary financing. Tragically, prior to the Sudan conflict, nearly two-thirds of South Sudan’s population faced acute food insecurity, a situation worsened by increased flooding and a growing refugee crisis. The national unity government, established in 2018 in line with a peace treaty, has also announced that the elections scheduled for December 22, 2024, have been postponed by an additional two years, highlighting ongoing political instability.
The Republic of South Sudan has been dealing with multifaceted challenges since its independence in 2011. Following years of civil unrest, the region has seen a tumultuous political and economic landscape. The recent conflict in Sudan has drastically impacted South Sudan, as the country heavily relies on oil exports routed through its neighbor. With vital oil production infrastructures incapacitated, the interplay of rising inflation and a depreciating local currency has further strained the economy. Furthermore, humanitarian concerns have escalated, with an alarming number of citizens facing food insecurity and displacement.
In summary, South Sudan’s socio-economic landscape continues to be severely impacted by the war in Sudan, presenting formidable challenges for the government. The disruption in oil production has significantly crippled economic growth and fiscal revenues, forcing the government to adopt emergency measures that may further destabilize the economy. The postponement of elections and the worsening humanitarian crisis call for urgent attention and support from the international community to stabilize and rejuvenate the region.
Original Source: www.imf.org
