Experts Say Oil Won’t Fix South Sudan’s Debt Crisis

(JUBA) – Economic experts have poured cold water on President Salva Kiir’s recent assurance that restarting oil production will bring South Sudan back to economic stability, warning that the country’s deep rooted structural and financial challenges remain unresolved.

South Sudan, a landlocked country, depends heavily on Port Sudan for exporting its crude oil to the international market. While the resumption of oil operations is expected to bring in foreign revenue, analysts say this will not automatically translate into economic recovery.

James Boboya, a social policy analyst, said that South Sudan’s ability to repay international loans is severely in question, so much so that foreign lenders have taken legal action against the government.

According to Boboya, oil revenues are being collected, but they are not enough to fund the national budget. He added that the country’s tax system is weak, with only a small percentage of the population contributing, most of whom operate informal businesses and live in poverty.

“Oil is only one component of production and even that sector is not functioning efficiently. Only about 8% of the population contributes to the tax base, and most of them are poor. That can’t sustain a national budget,” Boboya explained.

He further pointed out that poverty levels have soared dramatically since the country’s independence in 2011.

“Poverty has risen from 45% in 2011 to 92% this year. That’s not economic recovery—it’s economic collapse. We keep borrowing, but we can’t repay. Investors are now pulling out, and some have taken us to international courts,” he said.

Godfrey Victor Bullen, a legal and economic advocate, agreed with Boboya’s assessment. He emphasised that genuine economic recovery requires time, strong public institutions, peace, and extensive policy reforms.

Bullen also criticised the current state of financial governance, particularly the apparent mismatch between reported oil revenue and the liquidity situation at the Central Bank.

“We hear that money is entering the country through oil sales, yet the Central Bank has no cash. The Ministry of Finance continues to issue cheques to civil servants, but there’s no actual money to back them. That shows a totally broken financial system,” he noted.

He added that foreign investors are unlikely to consider South Sudan as a viable destination until the justice system is reformed, corruption is addressed, and peace is restored.

“No investor will risk capital in a country without legal protections, where corruption is rampant and insecurity is widespread. We must silence the guns, promote transparency, and build trust if we want investment,” Bullen added.

Both analysts concluded that while oil revenues offer potential, they must be accompanied by broader reforms for sustainable development. They recommended urgent fiscal discipline, institutional rebuilding, and more investment in local food production to reduce dependency on costly imports.