In a stark warning of a deepening humanitarian and economic crisis, the World Bank has projected that South Sudan will experience universal poverty in 2025. According to its latest “South Sudan Economic Monitor” report, the combination of a steep decline in oil production, severe external shocks, skyrocketing inflation, and the aftermath of natural disasters is driving the nation toward an all-encompassing poverty scenario. This comprehensive analysis delves into the multifaceted challenges facing South Sudan and examines the urgent measures needed to avert a full-scale socioeconomic collapse.

A Deepening Crisis: Universal Poverty on the Horizon

The World Bank report reveals a grim picture: more than three-quarters (76 percent) of South Sudan’s population lived below the national poverty line in 2022—a 7-percentage-point increase since 2015. Projections indicate that if current trends persist, nearly 100 percent of the population will fall under the poverty threshold by 2025. This “universal poverty” condition means that virtually every household will struggle to secure the minimum income needed to afford basic necessities.

Charles Undeland, World Bank Group country manager for South Sudan, highlighted during the report’s launch in Juba that years of economic decline have compounded the challenges facing the nation. “The deterioration in living conditions is not merely a statistical outcome—it reflects the real and harsh experiences of millions of South Sudanese who face the daily erosion of their purchasing power and access to basic services,” he said.

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Economic Decline and the Oil Conundrum

The Legacy of Oil Dependency

South Sudan’s economy has long been tethered to its oil reserves. Following its independence in 2011, the nation experienced a brief period of economic optimism fueled by oil revenues. However, repeated disruptions—from the long-standing conflict with Sudan to internal strife—have severely hampered production. The ongoing war in neighboring Sudan has not only affected cross-border trade but has also disrupted the logistics of oil extraction and exportation. With oil production in decline, the country has lost a critical revenue stream that once helped to stabilize the economy.

External Shocks and Global Disruptions

Beyond domestic conflict, South Sudan has been battered by external shocks. The COVID-19 pandemic disrupted global supply chains and led to significant reductions in demand for oil. Moreover, the indirect repercussions of the war in Ukraine have unsettled global energy markets, further diminishing the economic prospects for a nation already reliant on volatile commodity exports.

Heavy flooding—an increasingly frequent phenomenon attributed to climate change—has also wreaked havoc on South Sudan’s fragile infrastructure and agricultural productivity. These repeated natural disasters have not only displaced communities but have also exacerbated food insecurity, pushing the vulnerable further below the poverty line.

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Skyrocketing Inflation and Its Devastating Effects

One of the most alarming indicators in the report is the surge in inflation, which reached an unprecedented 139 percent in August 2024. This hyperinflationary environment is eroding the purchasing power of every South Sudanese citizen. Basic commodities, once considered affordable, have become luxuries for many. The rapid increase in prices is a direct consequence of supply shortages, depreciating currency value, and the government’s heavy reliance on imports to meet essential needs.

High inflation has a cascading effect on the economy. As prices soar, households are forced to allocate a larger portion of their income to food and fuel, leaving little for other necessities such as healthcare, education, and housing. For a nation on the brink of universal poverty, these rising costs create an environment where even the most basic standards of living are unattainable.

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Extreme Deprivation: A Worsening Reality

The report also examines extreme deprivation—the share of households unable to afford even the most basic food items. In 2022, this figure stood at 70 percent, up by 4 percentage points from previous estimates. Alarmingly, the trend shows a rapid upward trajectory: 84 percent in 2023 and a projected 92 percent in 2024. Such statistics underscore the severity of the crisis, revealing that an overwhelming majority of South Sudanese are struggling to secure food, let alone build a sustainable livelihood.

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Political Instability and the Quest for Peace

The 2018 Revitalized Peace Agreement

Political instability has been a defining feature of South Sudan’s post-independence era. The 2018 revitalized peace agreement was seen as a beacon of hope for a nation battered by years of civil conflict. However, the full implementation of this agreement remains a distant goal. Charles Undeland stressed that South Sudan’s economic prospects hinge on restoring peace and stability. Without a comprehensive peace process, the cycle of conflict and economic decline is likely to persist.

Government Reforms and Economic Diversification

Recognizing the urgent need to address its overdependence on oil revenues, the South Sudanese government has initiated several reforms. Minister of Finance and Planning Marial Dongrin Ater noted that efforts are underway to broaden the country’s economic base. These reforms focus on expanding support for agriculture, enhancing trade facilitation, and promoting investments in critical infrastructure. The 2024/2025 fiscal year budget reflects these priorities, aiming to foster a more diversified and resilient economic structure.

Yet, while these measures are promising on paper, their implementation faces significant hurdles. Corruption, limited institutional capacity, and persistent insecurity continue to hamper reform efforts. International donors and multilateral organizations are closely monitoring the situation, urging the government to accelerate reforms and prioritize transparency and accountability.

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The Human Face of Economic Collapse

Impact on Daily Life

For the millions of South Sudanese living in poverty, the numbers in the World Bank report translate into a daily struggle for survival. With nearly universal poverty on the horizon, the population is facing a crisis of unprecedented scale. Families are forced to cut back on essential services, children are pulled out of school due to unaffordable fees, and malnutrition rates are rising alarmingly. Rural communities, already isolated by poor infrastructure and recurring natural disasters, are particularly hard hit.

Health and Social Implications

The social fabric of South Sudan is under immense strain. Health services, which are already inadequate, are overwhelmed by the dual burden of rising poverty and the aftermath of repeated natural disasters. The collapse of purchasing power means that even essential medicines and healthcare services are beyond the reach of many. Social unrest, fueled by desperation and a loss of hope, further compounds the crisis. The erosion of human capital—through loss of education, poor health outcomes, and displacement—poses long-term challenges to any future economic recovery.

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International Community’s Response

Aid and Development Assistance

The international community has long recognized the vulnerability of South Sudan. Various humanitarian organizations, including the United Nations and the International Monetary Fund (IMF), have been involved in efforts to mitigate the crisis. Recent appeals for emergency aid have been launched to address the immediate food and healthcare needs of the population. However, with the situation projected to worsen, there is growing concern that current aid levels may prove insufficient.

Multilateral agencies emphasize that short-term relief must be coupled with long-term development strategies. Investments in agricultural technology, education, and infrastructure are critical to building resilience. Additionally, programs aimed at fostering peace and stability are essential to create an environment conducive to sustainable economic growth.

Calls for a Comprehensive Peace Process

The international community continues to stress that a lasting solution to South Sudan’s crisis lies in a comprehensive peace process. Donor conferences and diplomatic initiatives are underway to support the full implementation of the 2018 revitalized peace agreement. Leaders from regional organizations such as the Intergovernmental Authority on Development (IGAD) have called on all parties to commit to genuine reconciliation and the cessation of hostilities. Without such a framework, economic reforms and humanitarian aid efforts are unlikely to achieve their intended impact.

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The Role of External Shocks

Global Conflicts and Their Ripple Effects

External shocks have played a critical role in exacerbating South Sudan’s economic woes. The indirect impact of the war in Ukraine, for example, has disrupted global markets and affected commodity prices. As a result, South Sudan’s limited export earnings have been further constrained, diminishing its ability to generate foreign exchange. Moreover, the fallout from global health crises like COVID-19 has weakened international demand for oil—a resource that once served as the backbone of the South Sudanese economy.

Climate Change and Environmental Challenges

Environmental factors are also contributing significantly to the crisis. Years of heavy flooding, attributed to climate change, have devastated agricultural lands and critical infrastructure. These recurrent natural disasters not only displace communities but also undermine food production and exacerbate poverty. With climate change expected to intensify in the coming years, South Sudan faces an uncertain future where environmental degradation could further erode any gains from economic diversification efforts.

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Policy Recommendations and the Way Forward

Accelerating Economic Diversification

Experts agree that reducing the nation’s overreliance on oil is paramount to achieving long-term stability. The government’s efforts to diversify the economy—particularly by bolstering agriculture and trade—are steps in the right direction. International financial institutions have offered technical assistance and concessional loans to support these initiatives. However, successful diversification will require significant investment in human capital, infrastructure, and technology transfer.

Enhancing Public Financial Management

Strengthening public financial management is another critical priority. Transparent and efficient allocation of resources can help ensure that government funds are used effectively to support development projects. Efforts to combat corruption and build institutional capacity must be intensified. This will not only boost investor confidence but also help in the proper implementation of economic reforms.

Strengthening Social Safety Nets

With poverty projected to become universal, the implementation of robust social safety nets is urgently needed. Programs aimed at providing direct cash transfers, food assistance, and access to healthcare can alleviate some of the immediate suffering. Social protection schemes should be designed to be inclusive, targeting the most vulnerable populations, including women, children, and internally displaced persons.

Fostering a Comprehensive Peace Process

Ultimately, the full restoration of peace and stability remains the cornerstone of any sustainable recovery. The international community, along with regional stakeholders, must intensify diplomatic efforts to bring all parties to the negotiating table. A genuine and inclusive peace process is essential not only to end the cycle of violence but also to create an enabling environment for economic reforms and development assistance.

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Broader Implications for the Region

Lessons for Post-Conflict Economies

South Sudan’s trajectory offers critical lessons for other post-conflict nations in the region. The interplay between natural resource dependency, political instability, and external shocks underscores the fragility of economies that lack diversification. For neighboring countries facing similar challenges, the World Bank report serves as a clarion call to invest in sustainable development and resilience-building measures.

Regional Cooperation and Integration

There is also a growing recognition that regional cooperation can play a vital role in mitigating the effects of economic shocks. Initiatives aimed at integrating regional markets, improving cross-border trade, and sharing best practices in governance and development can help build collective resilience. Organizations such as IGAD and the African Union are increasingly advocating for collaborative approaches to address common challenges, ranging from conflict resolution to climate change adaptation.

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Voices from the Ground: Personal Stories and Community Impact

The Human Toll

While the statistics paint a dire picture, the human stories behind the numbers are even more poignant. In rural communities across South Sudan, families are witnessing a steady decline in their living standards. Parents are forced to make heartbreaking choices between sending their children to school or buying food, and many are grappling with the reality of malnutrition and poor health services.

Local community leaders have reported an increase in migration, as individuals and families leave their homes in search of more stable livelihoods in neighboring countries. These migrations, while a temporary reprieve from poverty, often lead to a host of other challenges, including strained resources in host communities and the loss of valuable human capital.

Grassroots Initiatives

Despite the overwhelming challenges, there are inspiring examples of grassroots resilience. Local non-governmental organizations and community-based groups have mobilized to provide emergency relief, support small-scale agriculture, and advocate for better governance. These initiatives, though small in scale compared to the national crisis, highlight the determination of South Sudanese communities to forge a better future against all odds.

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International Perspectives and the Global Responsibility

The Role of Global Institutions

Global institutions such as the World Bank, the International Monetary Fund, and various United Nations agencies have long been involved in supporting South Sudan. Their role now becomes even more critical as the country faces universal poverty. In addition to financial assistance, these organizations are tasked with providing technical expertise to help rebuild the nation’s economic foundations and promote good governance.

Donor Conferences and International Aid

Recent donor conferences have underscored the urgency of the situation in South Sudan. International donors are being called upon to increase their commitments—not only in terms of immediate humanitarian aid but also through long-term investments in education, infrastructure, and institutional reform. There is a growing consensus that a coordinated international response is needed to prevent the situation from deteriorating further and to lay the groundwork for a sustainable recovery.

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Conclusion: A Critical Juncture for South Sudan

The projection that South Sudan will experience universal poverty by 2025 is a sobering reminder of the complex interplay between conflict, economic mismanagement, external shocks, and environmental degradation. The World Bank’s “South Sudan Economic Monitor” report underscores that without significant and sustained efforts to restore peace, diversify the economy, and implement effective governance reforms, the crisis will only deepen.

For the millions of South Sudanese facing this uncertain future, the stakes could not be higher. The path forward requires not only bold domestic policy reforms but also a concerted effort by the international community to support the nation through this turbulent period. As South Sudan grapples with these enormous challenges, the restoration of peace and the full implementation of the 2018 revitalized peace agreement remain the linchpin for any hope of recovery.

In the coming months, policymakers, international donors, and local communities must work together to address both the immediate humanitarian needs and the long-term structural issues that have brought the country to the brink. The journey ahead is fraught with challenges, but with coordinated action and a commitment to reform, there is still a possibility of charting a new course toward sustainable development and shared prosperity.

Ultimately, the crisis in South Sudan is not just a national tragedy—it is a stark reminder of the vulnerabilities that face post-conflict nations worldwide. As the world watches South Sudan’s struggle, the call for international solidarity and decisive action has never been more urgent.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

14th March, 2025