Three in four citizens live in poverty, World Bank report says – The City Review South Sudan

By Pune Media On Mar 14, 2025

World Bank attributes this partly to persistent mismanagement of the country’s abundant natural capital and oil, recurrent community-level conflict and violence that led to nationwide armed conflict in 2016

By Anak Dut

Three in four people are living in poverty as of 2022, according to a report by the World Bank.

The South Sudan economic seventh edition, a search conducted by the World Bank and the government, noted the drastic decline in the living standards of citizens.

“Even prior to the oil shock of early 2024, per capita gross domestic product had dropped by 18 percent, relative to its 2015 level,” the report established.

Speaking at the launch of the report, titled “a pathway to overcome the crisis,” Charles Udeland, World Bank Group Country representative said the dire situation is a result of nascent institutions and weak governance.

He added that the persistent mismanagement of the country’s abundant natural capital and oil, recurrent community-level conflict and violence that led to nationwide armed conflict in 2016.

Mr. Udeland noted that the conflict got localized after the 2018 peace agreement, stressing that overlapping exogenous shocks such as the COVID-19 pandemic and historic flooding have also impeded economic recovery.

Meanwhile, Kamer Karakurum, a Senior Economist at the World Bank South Sudan said the country faces difficulties in achieving policy objectives due to an underdeveloped financial sector and money market.

She said the ability to target the monetary aggregate is further complicated by sustainable cash holdings outside the bank.

However, Karakurum acknowledged the challenges facing the Bank of South Sudan, such as limited capacity for timely high data production, which affects transparency and regulatory capabilities.

She continued that recent oil shocks have impacted the Bank of South Sudan’s ability to calibrate monetary policy and manage exchange rate flexibility.

“The shocks have necessitated resumption in monetary policy financing of the central government deficit and given the central bank’s limited capacity to manage liquidity by sterilizing its interventions. The monetization contributed to higher depreciation and inflation.”

She further said that the lack of facial space and buffers, over dependence on volatile oil revenue to fund the budget, has constrained the government’s capacity to respond effectively to external shocks.

The procyclical fiscal policy despite improvements in the non-oil revenue collection in FY24, resulted in further accumulation of salary arrears, and cuts to expenditure in both social spending.

The capital budget execution has consistently fallen short of budget allocation in recent years.

The FY24/25 budget approved with delays, projects a fiscal deficit of 11.7 percent of GDP.’

Karakurum reiterated that the conflict in neighboring Sudan had disrupted the flow of goods and services, including oil exports, which account for almost all the country’s exports.

She highlighted the conflict had also triggered a massive influx of refugees and returnees.

“As the rupture of the main Dar Blend oil export pipeline in February 2024 affected oil production, leading to a sharp decline in export revenues, with losses estimated at around US$7 million per day,” Karakurum stated.

“Even prior to the oil shock of early 2024, per capita gross domestic product had dropped by 18 percent, relative to its 2015 level,” the World Bank report established.

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