South Sudan: Economics of a failed state

27 Jun 2015, Aljazeera English

We analyse why South Sudan, despite its vast oil wealth, is still suffering economically four years after independence.

South Sudan is only four years old, but the world’s youngest nation tops the rank of failed states worldwide. After decades of conflict with its neighbour Sudan, long-sought autonomy in 2011 was meant to be a dream come true, but the country has been wracked by violence ever since. Thousands of people have been killed, and over a million displaced, as President Salva Kiir battles his rival, rebel leader and former vice president, Riek Machar.

Amid the chaos, rising inflation and poverty has left 3.8 million people without enough food – raising the spectre of famine. Despite its vast oil reserves, the country is producing at only one-third of its oil capacity, compared with levels from 2011, and the government is earning only $10 per barrel compared to the international price of $60.

Catherine Soi reports from Juba on the local businesses that are suffering due to the lost revenue.