In the world’s youngest country, the opportunity to engineer economic growth from scratch has constantly found severe turbulence. Gaining independence in 2011, South Sudan has faced a tumultuous first decade as a new nation: it has the fourth lowest standard of living in the world according to the IMF, and it’s slowly emerging from a seven-year-long civil war that has killed almost 400,000 soldiers and citizens alike. In spite of the circumstances, however, since the civil war’s stalemate in 2020 real GDP growth in South Sudan has averaged above 5 % annually, while life expectancy has consistently grown despite the war altogether.
Central to South Sudanese attempts at economic development is the utilization of its wealthy oil supply: South Sudan has the 3rd largest crude oil reserves in sub-Saharan Africa, making up 95.9 % of its exports and producing up to 250 % more oil (in barrels per day) than neighboring Sudan. The fledgling country’s returns on oil production, estimated to be about 90 % of the country’s total revenue, have not only provided economic growth but political stability in the aftermath of the war. As Mat Nashed summarizes for Al Jazeera, “the revenue generated from South Sudan’s lucrative oilfields is delicately holding the national unity government together, thanks to regular payouts to loyalists of Kiir and Machar,” South Sudan’s President and the leader of the previously rebelling SPLM-IO respectively.
Both Kiir and Machar struck a deal in 2020 to establish South Sudan’s current transitional government, and have plans to hold the country’s first elections in 2024. Yet just as the sub-Saharan nation seemed to be in the ideal politico-economic trajectory once more, the ongoing civil war in Sudan may serve as another wrench thrown in South Sudan’s plans for economic development, due to its sheer reliance on Sudan for exporting oil in the first place. Under the Transitional Financial Agreement signed in 2011, South Sudan exports its crude through a pipeline running through much of Sudan, including its capital city Khartoum, over to the Red Sea. In exchange, South Sudan has to pay fees and a non-commercial tariff to Sudan.
Yet as civil war between the Sudan Armed Forces and the rebelling Rapid Support Forces not only embroils the northern neighbor but jeopardizes much of the Khartoum area, worries grow that South Sudan’s stability may be another casualty in the fighting. Joshua Craze, an independent researcher on South Sudan, explains to Al Jazeera that, “If [oil pipelines] in Sudan get disrupted, then I don’t think Kiir’s regime lasts a month… He’s in a system of transactional politics that includes regular payoffs to people across the country.”
If Sudanese conflict ends up damaging the pipeline and preventing South Sudan from accessing an international audience for its oil, not only will the source of its economic product run thoroughly dry but so will the source of its political stability. In other words, oil may not only be the cornerstone for South Sudanese development but its entire foundation, upholding the transitional government through Kiir’s payoffs while enabling economic growth. Thus, any spillover from the Sudan Civil War on the pipeline might translate into a reawakened South Sudan Civil War, and a crushing blow to previous signs of economic progress.
In light of these prospects, South Sudan has gone to great lengths to negotiate ceasefires between the two factions, although to little to no avail. Truces between Sudan’s combatants have previously deteriorated very swiftly, yet as warfare continues to engulf the nation, it may be hope that Sudan’s southern neighbor is resorting to to avert economic calamity.
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