Subchapters:
- Basic data
- Public finances and the state budget
- Banking system
- Tax System
Basic data
Obtaining any economic indicators is proving difficult due to low data collection capacity, non-existent data on mutual trade with Sudan, one of the main trading partners, and the dominance of the informal sector. According to IMF estimates, the GDP of the Republic of South Sudan grew by 5.3% in 2021. The outlook remains negative due to the consequences of the global pandemic and civil war, political instability, natural disasters. The threat of the disintegration of the political system will dampen the possibility of foreign direct investment or the growth of business activities in the next period as well. Sudan remains completely dependent on imports of goods for domestic use and, despite favorable conditions for agriculture, must also import a large part of its own food consumption.
South Sudan’s economy is limited to oil extraction and subsistence agriculture, which supports the vast majority of the population. In 2021, revenues to the state budget increased compared to the previous period thanks to higher oil prices on world markets. However, due to high Sudanese transit fees, South Sudan’s oil revenues, which account for up to 97% of export earnings, are lower than before. Daily oil production is still far behind pre-civil war figures (139,000 barrels per day vs. 350,000 barrels per day in 2013). In December 2015, the government of South Sudan introduced a floating exchange rate with some restrictions on imports and currency exchange. Since then, the value of the South Sudanese pound has fallen by up to 4 thousand. %. In 2020, the exchange rate hovered around 164 pounds per USD. However, the currency remained overvalued, with the black market rate rising as high as £730 to the USD.
| Pointer | 2019 | 2020 | 2021 | 2022 | 2023 |
| GDP growth (%) | ON | ON | ON | ON | ON |
| GDP/population (USD/PPP) | ON | ON | ON | ON | ON |
| Inflation (%) | 51.2 | 27.1 | ON | ON | ON |
| Unemployment (%) | 12.2 | 14 | ON | ON | ON |
| Export of goods (billion USD) | ON | ON | ON | ON | ON |
| Import of goods (billion USD) | ON | ON | ON | ON | ON |
| Trade Balance (Billion USD) | ON | ON | ON | ON | ON |
| Industrial production (% change) | ON | ON | ON | ON | ON |
| Population (millions) | 11.1 | 11.1 | ON | ON | ON |
| Competitiveness | ON | ON | ON | ON | ON |
| OECD export risk | 7/7 | 7/7 | 7/7 | ON | ON |
Source: EIU, OECD, IMD
Public finance and state budget
| Public finance | 2021 |
| State budget balance (% of GDP) | ON |
| Public debt (% of GDP) | ON |
| Current account balance (billion USD) | ON |
| Taxes | 2022 |
| AFTER | 10-25% depending on the amount of income |
| F.O | 0-20% depending on the amount of income |
| VAT | 18% |
Some stabilization of South Sudan’s public finances should occur in the next period after the shock in 2020 caused by volatility in global oil markets and increased government spending due to the global pandemic. Despite loans from the IMF and international aid, the lack of income in the state budget will be significant. A possible rise in oil prices and the recovery of world trade should contribute to an increase in state revenues, but the ability to collect taxes and duties remains limited due to the weak capacity of the state apparatus. It is likely that the government will have to apply for additional international loans. In the case of the organization of postponed elections, election preparations will exert additional pressure on the state treasury.
Banking system
The central bank of the Republic of South Sudan is the Bank of South Sudan. Efforts to determine monetary policy are ineffective in the long term. The coverage of the country by commercial banks is still below average. Most commercial banks do not meet the central bank’s minimum capital and reserve requirements.
Commercial banks active in South Sudan include, for example:
Afriland First Bank, BP 640 Juba, 3 Hai Cinema Road, Tel: +211 956 688 405
Commercial Bank of Ethiopia, Haileselasie Avenue, Juba Town, Juba tel.: +211 928 944 809 / 927 639 407
Ivory Bank, Hai Suk, Juba Town, tel: +211 811 820 239 / 977 117 611
Kenya Commercial Bank, Jebel Kujuru, Rockcity Hotel, Juba, Tel.: +211 957 148 468
Tax system
At first glance, the South Sudan tax system is relatively clear and stable, but its problem is low efficiency and arbitrariness in application and enforcement.
For individuals with an income of up to 2,000 SSP, the rate is zero. Furthermore, the system is progressive with a tax burden of 5-20%. The highest rate is applied to incomes above SSP 15,001.
For legal entities, the system is divided into three bands (10%, 20% and 25%) according to the size of the company. Small businesses with profits of up to SSP 1 million pay taxes at 10%. A rate of 20% applies to medium-sized enterprises with profits between SSP 1 million and SSP 30 million, and a rate of 25% is introduced for large enterprises with profits exceeding SSP 30 million.
VAT ranges from 1% to 20% depending on the type of goods and services. The standard rate is 18%.
