South Sudan: resources for poverty eradication

The Republic of South Sudan became an independent country on 9 July, 2011. In the years since the Comprehensive Peace Agreement (CPA) was signed in 2005, it operated as a semi-autonomous government and has made significant progress in the restoration of peace, and political transition.

Governance structures have been established, which has helped work towards building a more stable state. There have also been improvements in the socio-economic well-being of South Sudan’s population. However, this process has not been without challenges, some of which could negate the progress made.

This report depicts a largely unstable macro-economic environment that does not guarantee fiscal sustainability, steady public revenues or predictable public spending. There is compelling evidence that abundant oil revenues in South Sudan, coupled with aid, could be impinging on effective domestic tax collection.

The period 2006 to 2011 was used as a proxy to analyse the intentions, motivations and character of resource allocation, which revealed the following:

  1. The Government of South Sudan depends acutely on oil revenues for its income. Between 2006 and 2011 oil revenues contributed over 98% of state income;
  2. Since the signing of the CPA in 2005, the country has experienced considerable growth in state revenues and ODA flows;
  3. South Sudan could be struggling with mechanisms for balancing resource demands for state building with the urgent need to address poverty and human development;
  4. There are significant gaps in the alignment of resources with identified expenditure priorities.