F?ll?wing ab?ut 120,000 barrel per day this fiscal year

F?ll?wing a
peaceful referendum in January 20011, S?uth Sudan became the newest state in
the w?rld in July 2011.As a new state it struggles with the devel?pment that
needs t? ?ccur in the area in ?rder t? bec?me ec?n?mically stable. ?ne big ?bstacle
is the legacy ?f c?nflict and instability in the area that st?ps the nati?n fr?m
devel?ping. The instituti?ns are still limited due t? the lack ?f res?urces and
the g?vernment hasn’t been able t? implement any pr?grams. ?ne thing that c?uld
be used t? cause ec?n?mic devel?pment is the huge ?il supply that S?uth Sudan p?ssesses.
This c?uld be the basis ?f a m?re stable ec?n?mical and p?litical situati?n.

Due t? the
internal c?nflicts in S?uth Sudan the c?untry’s l?ng-standing gr?wth and pr?sperity
are endangered. This c?nflict d?esn’t ?nly challenge the devel?pment gains, it
als? deteri?rates the humanitarian situati?n.

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Alth?ugh S?uth Sudan has vast and largely untapped
natural res?urces, bey?nd a few ?il enclaves, it remains relatively undevel?ped,
characterized by a subsistence ec?n?my. S?uth Sudan is the m?st ?il-dependent c?untry
in the w?rld, with ?il acc?unting f?r alm?st the t?tality ?f exp?rts, and ar?und
60%  ?f its gr?ss d?mestic pr?duct (GDP). ?n current reserve estimates, ?il
pr?ducti?n is expected t? reduce steadily in future years and t? bec?me
negligible by 2035.

The c?untry’s gr?wth d?mestic pr?duct (GDP) per capita
in 2014 was $1,111. ?utside the ?il sect?r, livelih??ds are c?ncentrated in l?w
pr?ductive, unpaid agriculture and past?ralists w?rk, acc?unting f?r ar?und 15%
?f GDP. In fact, 85% ?f the w?rking p?pulati?n is engaged in n?n-wage w?rk,
chiefly in agriculture (78%).

The current c?nflict has had a significant financial
impact ?n S?uth Sudan with 2015/16 GDP c?ntracting by 6.3%. With ?il pr?ducti?n
disrupti?ns and bel?w-average agriculture pr?ducti?n, the ec?n?my is expected t?
c?ntract further in FY2016/02017, while fiscal and current acc?unt deficits
will s?ar, spiraling d?mestic prices and the parallel market premium. Extreme p?verty
rate has increased t? 65.9%. Av?iding pr?tracted crisis requires rec?mmitment t?
a p?litical settlement and maj?r fiscal adjustment.

Exp?rt revenues decreased due t? declining ?il prices
and l?wer ?il pr?ducti?n. ?il pr?ducti?n is expected t? decrease t? ab?ut
120,000 barrel per day this fiscal year d?wn fr?m 165,000 barrels per day in
2014 and a peak ?f 350,000 barrels per day bef?re independence in 2011. The
decline in ?il revenue, has als? had a negative impact ?n macr?-budgetary
indicat?rs, requiring austere fiscal adjustments. The current acc?unt has
deteri?rated c?nsiderably leading t? depreciati?n ?f the parallel exchange rate
and fueling inflati?n. The S?uth Sudanese P?und (SSP) depreciated ?n the
parallel market fr?m SSP 18.5 per d?llar in December 2015 t? reach alm?st SSP
80 per d?llar by end September, 2016. S?uth Sudan is n?w in hyperinflati?n. The
annual inflati?n increased by 661.3% fr?m July 2015 t? July 2016 and by 730% fr?m
August 2015 t? August 2016. Relative prices ?f f??d have increased and f??d sh?rtages
and hunger are the m?st alarming signal ?f the c?untry’s larger ec?n?mic c?llapse.
Rising f??d prices have put many h?useh?lds in b?th urban and rural areas in a
very difficult p?siti?n, as they are unable t? aff?rd the minimum f??d basket.
Acc?rding t? the Ministry ?f Finance and Ec?n?mic Planning (M?FEP), the Central
Bank has n? reserves and the limited ?il and n?n-?il revenues are spent ?n
defense and security l?ans. The incidence ?f p?verty has als? w?rsened, fr?m
44.7% in 2011 t? 65.9% in 2015, with a c?rresp?nding increase in the depth ?f p?verty.

The c?untry is very y?ung with tw?-thirds ?f the p?pulati?n
under the age ?f 30. The 2009 nati?nal Baseline H?useh?ld Survey als? reveals
that the c?untry faces several human devel?pment challenges. ?nly 27% ?f the p?pulati?n
aged 15 years and ab?ve is literate, with significant gender disparities: the
literacy rate f?r males is 40% c?mpared t? 16% f?r females. The infant m?rtality
rate is 105 (per 1,000 live births), maternal m?rtality rate is 2,054 (per
100,000 live births), and ?nly 17% ?f children are fully immunized. 55% ?f the
p?pulati?n has access t? impr?ved s?urces ?f drinking water. Ar?und 38% ?f the
p?pulati?n has t? walk f?r m?re than 30 minutes ?ne way t? c?llect drinking
water, and s?me 80% ?f S?uth Sudanese d? n?t have access t? any t?ilet

The c?untry had begun t? p?st impr?ved results,
particularly in health and primary educati?n in the years f?ll?wing the 2005 C?mprehensive
Peace Agreement, and the resumpti?n ?f ?il fl?ws in 2013 was expected t? b??st
ec?n?mic gr?wth significantly. H?wever, the impact ?f the c?nflict ?n the p?pulati?n
and the breakd?wn in services c?ntinue t? have deep ec?n?mic and s?cial c?nsequences
f?r a c?untry where human devel?pment is already am?ng the w?rst in the w?rld.


Key internati?nal act?rs


The Interg?vernmental Auth?rity
?n Devel?pment (IGAD), as well as China, the Eur?pean Uni?n, N?rway, the United
Kingd?m, and the United States c?ntinued t? supp?rt and m?nit?r the
implementati?n ?f the peace agreement signed in August 2015.

In March 2016, the UN Human Rights C?uncil established
a UN human rights missi?n t? S?uth Sudan t? m?nit?r the human rights situati?n
and eff?rts t? pr?m?te transiti?nal justice.

UNMISS c?ntinued t? shelter m?re than 200,000
civilians f?rced t? flee their h?mes because ?f the fighting. UNMISS
peacekeepers struggled t? pr?tect civilians ?utside their bases.

There was a marked increase in attacks against the pr?perty
and staff ?f UNMISS and humanitarian ?rganizati?ns thr?ugh?ut 2016, amid
increasingly h?stile rhet?ric against the internati?nal c?mmunity. 

In early August 2016, f?ll?wing fighting in Juba, the
UN Security C?uncil auth?rized the depl?yment within UNMISS ?f a 4,000 str?ng
Regi?nal Pr?tecti?n F?rce (RPF) tasked with pr?tecting civilians and key
infrastructure in the capital. The c?uncil threatened t? imp?se an arms embarg?
sh?uld S?uth Sudan c?ntinue t? restrict the m?vement ?f UN peacekeepers ?r bl?ck
the depl?yment ?f the RPF. At time ?f writing, n? RPF member has been able t?
enter the c?untry.

In ?ct?ber, f?ll?wing a damning rep?rt fr?m an
independent UN investigati?n int? the peacekeepers’ failure t? resp?nd t? the
July crisis in Juba, the UN secretary-general sacked the Kenyan f?rce c?mmander
?f UNMISS. Kenya retaliated by pulling ?ut its entire c?ntingent fr?m the missi?n.

The UN secretary-general rep?rted c?ntinued ?bstructi?ns
t? the peacekeeping missi?n by g?vernment f?rces and auth?rities. In N?vember,
the United States Missi?n t? the United Nati?ns ann?unced it w?uld submit a pr?p?sal
f?r an arms embarg? ?ver S?uth Sudan, as well as additi?nal targeted individual
sancti?ns. At time ?f writing, the Security C?uncil had yet t? appr?ve a draft


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