By Staff Writer

South Sudan’s economy is on the mend and the World Bank predicts an even more robust growth in the coming months.

In its latest updates on South Sudan economy following the formation of the government of national unity, says the positive indicators are stained by high inflation, which remains at 170 per cent.

“After a four-year contraction, South Sudan’s economy appears to be recovering and reached 3.2 per cent in the 2018/19 financial year. However, the economy is still affected by high inflation which stood at 170 per cent in October last year, the Bank says in its latest updates on its website.

The report forecasts favourable economic outlook, with growth expected to be in the range of 7.9 per cent in the current financial year and projected exports to increase by 23 per cent.

However, the report cautions that a derailment of the peace agreement could push the economy back into recession over the same period.

The report titled Poverty and Vulnerability in a Fragile Environment, says further that growth was mainly driven by positive movement in the oil sector, which recovered strongly during the period under review.

“Dividends from the peace agreement also reduced conflict in certain regions across the country and led to a slight recovery in a few non-oil sectors. Growth in the oil and mining sectors was estimated at 10.7 per cent, services sector is estimated to have grown by 0.4 per cent, while agriculture is estimated to have contracted by 2.5 per cent,” according to the report.

Despite the positive economic achievements, South Sudan remains among the poorest countries in the world and four out of five South Sudanese still live below the international poverty line of SSP551 ($1.90) per day.

Hyperinflation, high debt burden, distortions in the foreign exchange rate market, challenges in budget execution, as well as sub-national conflict further exacerbate the situation.

“South Sudan has registered positive economic growth. However, in order for growth to have more impact on the lives of ordinary citizens, a significant portion must be reinvested in improving food security and basic service delivery,” observes Husam Abudagga, World Bank Country Manager for South Sudan.

According to the report, South Sudan could reach its economic and social ambitions by addressing the underlying causes of conflict and restoring peace and stability;

The report calls on the government to Implement comprehensive macroeconomic reforms that include measures to unify the exchange markets, reduce inflation and diversify the economy.

In addition, the World Bank wants Juba improve budget transparency and take steps to provide timely and accurate information on revenue, spending, arrears, debt, and budget execution.

South Sudan could achieve rapid growth by “increasing allocations and investment for service delivery, particularly in education, health, and rural development, necessary to improve resilience, reduce poverty, and build stock of human capital and avoiding a lost generation.”

The World Bank’s South Sudan Economic Update provides regular, comprehensive analysis of the South Sudanese economy.

The report is intended to encourage constructive dialogue on public policies among the country’s leadership and key stakeholders such as development partners, academia, the private sector and civil society.