(JUBA) – A new policy paper from the Institute of Social Policy and Research (ISPR) critically examines South Sudan’s proposed 2025–2026 national budget, focusing specifically on the country’s overdependence on oil revenue and how this continues to undermine effective fiscal planning, citizen participation and sustainable development.
Authored by Boboya James Edimond, an expert in international development and governance, the paper calls for urgent economic diversification, transparency in oil revenue management and a national budget that prioritises citizens’ needs.
Released on 16 July 2025, the ISPR report aims to stimulate informed dialogue between the Ministry of Finance and Planning, the Reconstituted Transitional National Legislative Assembly, civil society organisations, and development partners. It argues that the dominance of oil in the national economy limits South Sudan’s ability to develop a resilient, people focused budget.
With over 90% of government revenue sourced from oil exports, the paper warns that price fluctuations, pipeline disruptions,and conflict-related production setbacks pose serious threats to fiscal stability.
The report highlights how the oil dominated revenue structure weakens the country’s fiscal discipline and limits funding for basic services. With only 40% of the national budget reportedly funded in the last fiscal year, critical sectors like education, health and infrastructure remain underfunded. Moreover, the reliance on oil revenues undermines accountability, as opaque oil contracts and prepayment borrowing models shield government decisions from public scrutiny.
South Sudan’s Public Financial Management and Accountability Act (2011) outlines a budget making process meant to ensure transparency, accountability and citizen participation. However, the paper notes that in practice, oil revenue centralisation bypasses these governance principles. It emphasises that citizens remain excluded from budget consultations, and expenditure decisions are often made without sufficient oversight or transparency, particularly in the oil sector.
Economic data presented in the paper underscores the risks. The country’s GDP contracted by 30% in the 2024–2025 fiscal year due to disruptions in oil production linked to conflict in Sudan and internal insecurity. With oil accounting for the bulk of export earnings, the fiscal impact of production halts is immediate and severe.
Inflation has soared, and over 92% of the population now lives below the poverty line of $2.15 (SSP 9,890) per day. Debt servicing for loans tied to future oil revenue continues to consume a large portion of the national budget, outpacing allocations to social services such as education.
The table below illustrates South Sudan’s debt-to-GDP ratio from 2020 to 2025, showing its fiscal trajectory and mounting pressure from oil revenue backed borrowing:
| Year | Debt-to-GDP Ratio (%) |
|---|---|
| 2020 | 22.5 |
| 2021 | 29.3 |
| 2022 | 36.7 |
| 2023 | 44.1 |
| 2024 | 54.3 |
| 2025 | 52.0 (projected) |
The paper also details the failure of oil revenues to translate into improved living standards. Public servants remain unpaid for months, health facilities face drug shortages and infrastructure development has stalled. Despite oil earnings, South Sudan ranks 177th out of 180 in the global Corruption Perception Index and 191st out of 193 in the Human Development Index.
The ISPR calls for immediate reforms in oil revenue governance. It recommends publishing oil revenue data, renegotiating unfavourable oil pre-sale contracts, and strengthening the capacity of oversight bodies such as the National Audit Chamber and Anti-Corruption Commission. It also urges the government to redirect a significant portion of oil income towards economic diversification projects, including agriculture, renewable energy and small scale manufacturing.
The report concludes by asserting that without a strategic shift away from oil dependency, South Sudan’s economy will remain fragile, its budget process dysfunctional and its development goals unfulfilled.
