JUBA, February 5- At a crucial juncture in its development, South Sudan faces the dual challenge of reviving its economy and addressing the impacts of climate change. Two World Bank Group reports released today bring to light the urgent need for reforms in public finance and climate-smart strategies to halt economic downturn and foster sustainable growth. The Public Finance Review (PFR) and Country Climate and Development Report (CCDR) highlight the perilous cycle of instability and poverty exacerbated by climate disasters and poor fiscal governance.
South Sudan’s economy is under strain due to frequent climate shocks, such as severe floods and rising temperatures, which are affecting livelihoods and increasing social vulnerabilities, especially for women, pastoralists, and communities reliant on natural resources. Despite having significant oil reserves, the nation’s progress is hindered by fragile institutions, non-transparent revenue practices, and misallocated public funds, which exacerbate macroeconomic challenges.
The Country Climate and Development Report (CCDR) estimates that by 2050, South Sudan will need investments exceeding US$13 billion to adapt to climate change. Flooding, which has become a common occurrence, affects nearly 25% of the country in extreme years, disrupting essential services, damaging livelihoods, and worsening food insecurity. Additionally, climate change threatens to reduce labor productivity, livestock income, and crop yields, with sorghum yields expected to decline by 8% under increased temperatures by 2050.
The Public Finance Review (PFR) outlines how reliance on oil, coupled with inadequate investment and disruptions in export infrastructure, have narrowed fiscal space. Public spending, averaging 35% of GDP, primarily supports administration, security, and law enforcement, while vital sectors like health, education, and social protection receive insufficient funding. This has led to unpaid salaries and a reduction in the real value of public wages.
“The PFR provides a timely and actionable roadmap for restoring economic stability in South Sudan. As a government, we are committed to taking immediate steps by accelerating the implementation of Public Financial Management (PFM) reforms and strengthening budget discipline. These reforms are essential to rebuild trust, stabilize our economy, and deliver basic services to our people,” said Honorable Benjamin Ayali Koyongwa, Undersecretary of Planning in the Ministry of Finance, Republic of South Sudan.
The PFR recommends several measures for economic stabilization, including stabilizing inflation, enhancing exchange rate policies, and rebuilding trust with international partners. Key priorities include transferring all oil revenues to the National Revenue Fund and publishing oil data quarterly to improve resource management transparency; ensuring regular salary payments to maintain public services; publishing budget execution and financial reports to enhance accountability; avoiding new non-concessional or oil-backed loans that could risk future revenues; and adhering to procurement rules for crude oil sales with parliamentary oversight on prepayment arrangements.
“South Sudan stands at a pivotal moment – climate change is no longer a distant threat, it is a daily reality, reshaping the country’s economy and communities. However, by improving public financial management, prioritizing climate-smart policies and investments, strengthening institutions, and protecting essential services, South Sudan can place itself on a more resilient and sustainable development path,” said Charles Undeland, World Bank Group Country Manager for South Sudan. “The World Bank Group stands ready to continue supporting the government in these critical steps,” he added.
The CCDR emphasizes South Sudan’s natural assets like fertile land, water, and renewable energy potential, suggesting that sustainable use of these resources can drive growth. The report outlines five priorities to mitigate climate impacts:
- Enhancing flood management systems, early warning initiatives, and infrastructure rehabilitation through community involvement.
- Investing in climate-resilient agricultural and livestock practices, such as improved seeds and sustainable grazing management.
- Expanding off-grid renewable energy solutions to support resilience, healthcare, education, and economic diversification.
- Accelerating governance reforms to allocate more resources to climate-smart investments.
- Promoting responsible use of natural resources such as forests, fisheries, and wildlife to bolster rural livelihoods and economic opportunities.
The World Bank Group’s Country Climate and Development Reports (CCDRs) serve as integral tools for aligning climate action with development goals. By providing data, research, and priority recommendations, these reports guide governments and stakeholders in managing emissions and adaptation strategies to support a transition to a low-carbon, resilient future.
Contacts
Addis Ababa: Gelila Woodeneh, (+251) 911 50 1196, gwoodeneh@worldbank.org
Juba: Lomoro A. John Sindani, (+211) 925 472 380, lsindani@worldbankgroup.org
Original Story at www.worldbank.org