South Sudan’s economy expected to shrink by 1.1% this year

South Sudan's economy is facing a challenging period as the country's GDP is expected to contract by 1.1% this year due to a decrease in revenues from the oil sector. With oil accounting for 90% of the country's goods exports and over 80% of total government revenue, fluctuations in international oil prices have a significant impact on the country's overall economic stability. This economic downturn is further exacerbated by the lasting effects of political instability and conflict that have plagued the nation since 2013. Parag Maduot, Assistant Professor at the University of Juba, shed light on the challenges facing South Sudan's economy in a recent interview on CNBC Africa. Maduot emphasized the slow progress in implementing the existing peace agreement and the government's struggles to return to pre-conflict oil production levels. The reliance on the oil sector as the primary driver of economic growth has hindered diversification and growth in other sectors, creating a vulnerability to external market fluctuations. In an effort to mitigate the economic crisis and build resilience, the South Sudanese government is taking steps to reform the public financial sector and strengthen relations with international financial institutions such as the IMF, the African Development Bank, and the World Bank. However, the success of these initiatives is contingent upon stabilizing the political environment and ensuring a successful transition to a peaceful and orderly governance structure. One key area of focus for the government is the agricultural sector, which has seen a 6% increase in cultivated area in 2020 compared to previous years. Despite employing nearly 40% of the country's workforce, the sector still lags behind pre-conflict levels due to ongoing security issues and lack of large-scale investment. Addressing these constraints and promoting commercial farming could alleviate the country's reliance on food imports and help boost the economy. While progress has been made with the revitalized peace agreement and the recent swearing-in of new members of the transitional national legislative assembly council, observers note that the pace of implementation remains slow. However, the formation of a functioning legislature presents an opportunity to address key reforms in the financial and security sectors, paving the way for a more stable and prosperous future for South Sudan.