As the world’s youngest country, South Sudan faces many obstacles to economic and political stability. Continued conflict, natural disasters and COVID-19 further exacerbate the developing nation’s economic strife in the aftermath of years of civil war. Outside of foreign aid, South Sudan’s economy heavily relies on two main sources: oil production and agriculture. Both these sources experienced the impact of the COVID-19 pandemic, negatively affecting economic growth and livelihoods in the country. The impact of COVID-19 on poverty in South Sudan calls for the support of foreign aid in order for the country to successfully recover.
South Sudan’s Oil Industry
South Sudan is one of the most oil-reliant countries in the world. More than 90% of its revenue and more than 70% of its GDP stems from its abundant oil fields. Since gaining its independence, South Sudan produces nearly three-quarters of former Sudan’s entire oil output, equating to almost 500,000 barrels per day. However, the volatile oil industry is experiencing a lower demand and a decline in prices due to the pandemic. Regarding the global oil demand, “containment measures and economic disruptions related to the COVID-19 outbreak have led to a slowdown in production and mobility worldwide, producing a significant drop in global demand for oil.”
COVID-19’s Effects on Agriculture and Food Security
The agricultural sector accounts for 15% of GDP in South Sudan and employs roughly 80% of South Sudan’s population. With more than 80% of the population residing in rural areas, agriculture, livestock farming and fishing make up the livelihoods of many households.
A devastating combination of flooding, drought, locust swarms and the pandemic created high levels of food insecurity in South Sudan. More than 6 million people are facing crisis-level food insecurity and roughly 1.4 million children under 5 may suffer from acute malnourishment in 2021.
The IMF Assists
In response to the worsening humanitarian crisis, the world continues to reaffirm its commitment to eliminating poverty in South Sudan. The International Monetary Fund (IMF) approved a disbursement of $174.2 million in March 2021 for emergency assistance to South Sudan in the wake of COVID-19. The assistance aims to provide economic relief due to the collective impact of plummeting oil prices, floods and the pandemic in general. According to the IMF, the funding will “finance South Sudan’s urgent balance of payments needs and provide critical fiscal space to maintain poverty-reducing and growth-enhancing spending.”
World Bank Projects in South Sudan
On June 8, 2021, the World Bank announced two new projects equating to $116 million to curb poverty in South Sudan by committing to “strengthen the capacity of farmers, improve agricultural production and restore livelihoods and food security.” The first project, the South Sudan Resilient Agricultural Livelihoods Project (RALP), amounts to $62.5 million and commits to training farmers to better manage their businesses, utilize new agricultural technology and implement climate-smart practices to improve agricultural output. The project will also assist farmers with “tools, machinery and seeds required to improve productivity.”
The second grant of $53.7 million supports the Emergency Locust Response Project (ELRP). The grant will fund South Sudan’s response to desert locusts. The project will provide income opportunities to vulnerable people to assist them in producing more food and improve their economic situation. The project also encourages “the restoration of pasture and farming systems” in the region.
The Road Ahead
The World Bank expects levels of poverty in South Sudan to remain high for the time being due to food insecurity and the lack of access to essential goods and services. The impact of COVID-19 on poverty in South Sudan is harsh. Data as of April 2021 indicates that 82% of the population lives below the poverty line. However, the recent aid to South Sudan gives the country’s oil industry and agricultural production an opportunity to recover to pre-pandemic levels. The government’s priorities lie in addressing the lingering conflict and stabilizing its economy amid an economic, humanitarian and public health crisis. With continued aid and support, South Sudan can successfully recover and achieve stability.
– Gene Kang