By Taban Henry
The World Bank is urging the government of South Sudan to leverage its natural capital in agriculture and oil sector to support recovery and resilience in the country.
The World Bank Country Manager for South Sudan, Firas Raad was speaking during the launch of the Country Economic Memorandum (CEM) report, titled Direction for reform in country Economic Memorandum for recovery and resilience in South Sudan.
Mr. Raad highlighted that there is need for the country to pull its natural capital to boost agriculture and the oil money should support the recovery and strength of the new nation.
He said that South Sudan should utilize its oil revenues to boost agricultural production to salvage the ailing oil dependent economy.
“Getting South Sudan realize its potential will require steps aimed at consolidating peace and strengthening institutions, as well as targeted reforms tailored harnessing South Sudan’s rich natural capital for development impact as first order prerequisites for inclusive economic recovery,” said Firas Raad.
The latest World Bank economic analysis for South Sudan shows that oil and agriculture dominate the Country’s economy, with oil contributing 90 percent of the revenue and almost all exports, while agriculture remains the primary source of livelihood for more than four in five household.
According to the Word Bank Country Manager, weak institutions and recurring violence in the country remains caught in fragility and economic stagnation a decade after independence adding that the death of economic opportunities and food insecurity are major concerns, they are reinforced by adequate provision of services, infrastructure deficits, displacement including climatic shocks the economic growth.
“The cost of the conflict has been immense, with south Sudan’s real gross domestic product (GDP) per capita in 2018 estimated at being one third of the counterfactual estimate for a non-conflict scenario. However, authorities in 2020 initiated an ambitious reform program aimed at macroeconomic stabilization and modernization of the country’s financial management architecture. With this reform effort, the gap between the official and parallel exchange rates was eliminated and inflation declined. To consolidate and broaden these gains, more will have to be done to strengthen governance system and improve transparency,” he stated.
Meanwhile Joseph Mawejje who is the World Bank Economist for South Sudan revealed that three messages emerge from the report citing peace dividend is South Sudan real GDP per capita in 2018 was estimated at one of the counterfactual estimated for a non-conflict scenario.
“Maintaining peace can by itself be strong driver of growth. Secondly, with better governance and accountability, South Sudan’s oil resources can drive transformation. Third South Sudan’s chronic food insecurity could be reversed with targeted investments to improve the resilience’s of the agriculture sector,” he said.
Mawejje pointed out that addressing the drivers of fragility, ending all forms of conflict and ensuring peace and stability in all parts of the Country are prerequisites for an inclusive economic recovery adding the course on macroeconomic reforms and continue on a stabilization path, building on key millstones already achieved in unifying the exchange rates and taming inflation. “Improve oil sector governances by ensuring that the oil revenues and expenditures are on budget and used effectively to achieve national development goals. Support the resilience of agriculture sector to reverse the food crisis and achieve food security for all households,” he added.