South Sudan has been grappling with a severe economic crisis, particularly highlighted by the surging exchange rate, where the value of the South Sudanese Pound (SSP) has dramatically depreciated to 180 SSP for one US dollar. Since the onset of civil conflict in 2013, the country has remained in a precarious state, marked by fragility, economic stagnation, and instability. The widespread poverty is further aggravated by ongoing conflicts and the displacement of communities. The nation’s economy is entangled in a complex array of challenges that severely hinder economic growth and development.

The economy of South Sudan is heavily reliant on the oil sector, which constitutes 98% of the government’s annual operating budget and accounts for 80% of its Gross Domestic Product (GDP). The oil is transported through a pipeline to refineries and shipping facilities at Port Sudan on the Red Sea. However, the country faces rampant economic inflation, significantly impacting the national currency’s value. The exchange rate, where hundreds of US dollars are exchanged for 180 SSP, exacerbates the situation nationwide.

In response to the escalating prices and economic downturn, President Salva Kiir recently instructed the Minister of Petroleum, Honourable Puot Kang Chol, to increase crude oil production. This move is aimed at mitigating the rising costs within the country. Nonetheless, the conflict in neighboring Sudan is identified as a primary factor contributing to the inflation. Economic experts argue that the war in Sudan has severely disrupted South Sudan’s economy, leading to a shortage of goods and services. This scarcity has triggered price increases as the competition for scarce resources intensifies. Moreover, the war has precipitated a decline in the value of the South Sudanese Pound, further destabilizing the country’s economic framework.