Representatives from the African Development Bank, Professor Robert Mayom Deng. Vice Chancellor of the University of Juba, and other senior officials unveil the Country Focus Report 2025 in Juba on Wednesday, June 25, 2025. (Credit: Stephen Omiri/Eye Radio)

JUBA, South Sudan (Eye Radio) – The African Development Bank (AfDB) projects South Sudan’s economy is poised for significant growth, with a 4.0 per cent increase in Gross Domestic Product (GDP) expected in 2025.

This optimistic forecast, unveiled in the Country Focus Report 2025 by Senior National Country Economist Hoth Tot Chany in Juba on Wednesday, June 25, hinges on rising oil exports and subsiding security challenges.

The Ivory Coast-based financial institution unveiled these projections today during the launch of its country report for South Sudan at the University of Juba.

The AfDB’s forecast is even more robust for 2026, anticipating a substantial GDP growth of 12.1 per cent. This higher projection hinges critically on stability in neighbouring Sudan, which provides the vital pipeline for South Sudan’s oil exports.

Furthermore, the report highlights that a de-escalation of internal political tensions and the continued implementation of Public Financial Management (PFM) reforms will be crucial in spurring this growth.

According to Hoth Tot Chany, Senior National Country Economist of the African Development Bank, the revised projections reflect recent positive developments.

“We projected that the output will be positive, after the announcement of resumption of oil in January, we had to revised our focus based on the available information, and as of now, we project that by the end of this fiscal year, the economy will grow by 4 percent,” Chany stated.

“But in the following year, if the production continues without any interruption, we project that the economy will grow by 12.1 per cent because of oil coming and stability in other areas to support agricultural production.”

Recommendations for Sustainable Growth

According to Chany, to realize these projections and ensure sustainable development, the AfDB presented several key recommendations:

• Peace and Dialogue: The bank strongly urged the government to prioritize maintaining peace and promoting political dialogue to address state fragility. This, they noted, is essential for preparing the country for a peaceful political transition through fair, transparent, and credible elections.
• Macroeconomic Policy: Macroeconomic policy must actively support domestic resource mobilization. This includes strategically expanding the tax base and rigorously reducing revenue leakages to bolster national income.
• Foreign Exchange Buffers: The Bank of South Sudan should build robust foreign exchange buffers. This measure is crucial for mitigating exchange rate volatility and external economic pressures, which, in turn, will help reduce inflation.

Economic Snapshot and Challenges:

The report acknowledged that South Sudan’s real GDP notably contracted by 27.6 per cent in 2023/2024, a sharp decline from a 2.5 per cent growth in 2022/2023.

This contraction primarily reflects a difficult economic environment exacerbated by the conflict in Sudan, which led to pipeline damage and a significant shutdown in oil production.

Despite these setbacks, the country witnessed some positive agricultural trends in 2024, with an increase in harvested area by 6.2 per cent and crop yield by 8.3 per cent.

However, these gains were partially offset by the decline in oil production and conflict-related trade disruptions, which collectively slowed overall economic activity.

Inflation, which grew by 65.6 per cent in 2023/2024, is expected to remain moderate at 65.0 per cent in 2024/2025. This persistent inflation is largely attributed to the significant depreciation of the local currency, which saw a 340 per cent depreciation in the parallel market as of December 2024.

Money supply also experienced substantial growth, increasing by approximately 200.5 per cent as of October 2024, up from 71.3 per cent in October 2023, driven by this currency depreciation.

“Making South Sudan’s Capital Work for Development”

The 2025 country focus report, titled “Making South Sudan’s capital work for South Sudan’s development,” thoroughly examines the effectiveness of domestic capital mobilization within the context of the structural change financing gap identified in the previous year’s report.

It also delves into the crucial role of institutions, governance, and the rule of law in harnessing and utilizing South Sudan’s vast natural capital potential.

The AfDB report underscores that South Sudan’s economy is one of the most resource-dependent economies on the continent.

Oil alone represents over 50 per cent of the GDP, accounts for about 80 per cent of exports, and contributes over 90 per cent of government revenues. This heavy reliance on a single commodity has historically undermined efforts to diversify the economy and broaden the tax base.

The bank’s recommendations aim to address these structural challenges for a more resilient and inclusive economic future.