The IMF in its growth forecast for Sub-Saharan Africa (SSA) projected that the region will grow by 4.2% in 2025 which is quite modest compared to the projections of war-torn South Sudan which is projected to grow by an impressive 27.2% while making a full recovery from the contraction of 26.4% it experienced in 2024.
South Sudan is a landlocked, poor country in East Africa that has a long history of civil wars and internal strife that have impeded the development of the country. South Sudan is also the youngest sovereign nation, having only become an independent state on the 9th of July 2011. The independence was achieved after several years of conflict with Sudan, which resulted in two civil wars that inhibited the growth of the country.
Just two years after independence from Sudan, South Sudan descended into another civil war, which began in 2013 and lasted until 2020. The conflict started as a power struggle between President Salva Kiir and his former deputy Riek Machar, with Kiir accusing Machar of attempting a coup. Machar denied the allegations, and the rivalry between them escalated into violence. The war was also likely inflamed by the fact that the two leaders belonged to two different ethnic groups that have a history of conflicts between them, particularly over cattle raids and land resources.
Many groups in South Sudan also felt marginalized and excluded from power and resources. This led to widespread discontent and created an environment where conflict could thrive, which was accentuated due to the fact that South Sudan’s economy is heavily reliant on oil, and competition for control over oil resources and revenue contributed to the conflict. The region’s history of violence and instability, including the Second Sudanese Civil War, which ended with South Sudan’s independence in 2011, also created a fragile environment prone to further conflict.
These factors combined to create one of the most devastating conflicts in recent history, resulting in massive displacement, humanitarian crises, and significant loss of life. The war finally ended with a unity deal in 2020, but ongoing tensions and systemic ethnic violence continue to affect the country.
However, the Revitalized Agreement on the Resolution of the Conflict in the Republic of South Sudan (R-ARCSS) signed in 2018 has brought relative stability to the country, enabling economic activity to resume and this has resulted in an increase in oil production and revenues which is expected to drive economic growth given the fact that South Sudan is rich in oil reserves, and the country’s economy is heavily reliant on oil exports.
South Sudan also has significant agricultural potential, with fertile land and a favourable climate. Investments in agriculture could contribute to economic growth and diversification. At the same time, the government has initiated several infrastructure development projects, including roads and energy, which will improve connectivity and facilitate economic activity.
Despite the positive outlook, South Sudan’s economy has faced significant challenges due to recent political crises. In 2023, the country experienced a severe economic downturn due to increased conflict and insecurity, which disrupted oil production and led to a decline in economic activity. The conflict also resulted in a surge in inflation, depreciation of the local currency, a decline in foreign exchange reserves, and also resulted in a humanitarian crisis, with millions of people displaced and in need of assistance.
Notwithstanding these challenges, South Sudan’s economy is expected to recover, driven by the factors mentioned earlier. The government has taken steps to stabilize the economy, including fiscal and monetary policy reforms and investments in infrastructure development that will improve connectivity and facilitate economic activity. The international community has also provided support to South Sudan, including humanitarian assistance and economic aid to support their recovery efforts.
In conclusion, South Sudan’s projected economic growth in 2025 is driven by a combination of factors, including oil production, peace agreements, agricultural potential, and infrastructure development. While the country has faced significant challenges due to recent political crises, the government has implemented measures to stabilize the economy and promote growth. With continued support from the international community and implementation of economic reforms, South Sudan is poised to achieve its growth potential.
Oshobi, a development economist, management consultant, and author, writes from Lagos, Nigeria.