JUBA, South Sudan (BG) – The World Bank has called for immediate and sustained reforms to address South Sudan’s deepening economic crisis, warning that the country’s economy is projected to contract by 30% in the 2024-25 fiscal year due to disruptions in oil production.

According to the latest South Sudan Economic Monitor (SSEM) report, recovery could begin in 2025-26 if oil exports resume.

The report notes that South Sudan’s economy has declined for five consecutive years, with per capita Gross Domestic Product (GDP) expected to fall to almost half its 2020 level.

The contraction is driven by a sharp drop in oil revenues—estimated at $7 million per day—leading to strained public finances, salary arrears, and reduced spending on essential services such as health and education.

Hyperinflation and food insecurity have also worsened, affecting nearly 80% of the population, while poverty has risen to 92%.

Despite these challenges, the report emphasizes urgent reforms to stabilize the economy and promote sustainable growth.

“The situation is very challenging, but the government has committed to undertaking reforms to tackle macroeconomic and fiscal challenges and enhance governance,” said Charles Undeland, World Bank Group country manager for South Sudan.

The report recommends several policy measures, including strengthening macroeconomic policies, increasing exchange rate flexibility, improving oil revenue management, and boosting non-oil revenues.

Addressing salary arrears, investing in agriculture, and improving governance are critical for economic diversification and poverty reduction.

“A fundamental shift in South Sudan’s policy and institutional framework is needed to reduce poverty and enhance economic growth,” said Kamer Karakurum Ozdemir, World Bank senior economist.

The SSEM serves as an annual assessment of South Sudan’s economic landscape, providing insights for policymakers, business leaders, and development partners.