SOUTH SUDAN

RISK RATING
Severe
Default High Risk Score 8.00
Normal Average 6.87
Weighted Average 6.80
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

South Sudan received its first financial relief from the IMF in 2020 since it joined the institution in 2012 amid a major economic crisis that has emerged because of COVID-19 and oil price volatility. South Sudan is one of the most oil-dependent countries in the world with oil accounting for almost the totality of exports, around 60 percent of its GDP, and over 90 percent of government revenues. The political and security outlook has also faced significant strain. On the one hand, the gradual implementation of the September 2018 peace agreement along with the formation of the unity government in February 2020 laid the groundwork for greater stability. On the other hand, the functioning of the new government remains slow. The feeling of a failing peace is beginning to set in, and key indicators suggest that the country is sliding back towards instability, exacerbated by the economic crisis.

  • International patience over the peace deal is wearing thin, although relations with Sudan have improved. In September 2018, the South Sudanese government of President Salva Kiir, the SPLM-IO rebel movement of Riek Machar, and several other armed groups which emerged amid the 2013-18 civil war, signed the Revitalized Agreement on the Resolution of the Conflict in South Sudan. However, the implementation process of the agreement remains a key sticking point and could yet derail the peace process. Relations between Sudan and South Sudan have warmed since 2019. Both countries desperately need revenues generated by oil from South Sudan flowing through a pipeline and port owned by Sudan.
  • The peace agreement has seen some initial successes in collaboration between the two parties. The government army loyal to President Kiir (now known as the South Sudan People‚Äôs Defence Force ‚Äď SSPDF) has made common cause with Riek Machar‚Äôs SPLA-In Opposition (SPLA-IO). However, the peace plan excludes key stakeholders in South Sudan‚Äôs highly fractured political climate. With a third of the population displaced at home or abroad, and over half requiring food aid, the country remains extremely fragile, and again on the verge of famine. There have increasing reports of communal and ethnic violence, while cantonment and reunification of rival military forces stipulated in the peace agreements are suspended. Cattle-raiding and ethnic violence continue across large parts of a country, while major rebel groups still hold out against the peace deal.
  • Hopes of financing reconstruction through increased petroleum production have been dashed by the collapse of world oil prices. South Sudan‚Äôs reliance on oil naturally contributes to this volatility and the outlook for oil over the medium to long term continues to threaten economic stability. However, pre-export financing deals are proving a potential threat to economic stability. Since independence in 2011, South Sudan has preferred to pre-sell crude oil exports through financing agreements with commodity traders and commercial banks. Proceeds of pre-sold crude cargoes have financed the government‚Äôs war effort in recent years, while building up an estimated USD 200 million in arrears with outstanding creditors. A currency crisis has also emerged.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
6.2
Expropriation, Nationalisation, Confiscation & Deprivation
7.5
Contract Frustration & Breach
7.5
Taxation
7.5
Bribery & Corruption
8.0
Regulatory Burden
8.0
Strikes, Riots & Civil Commotion
6.0
Security
6.0
Sovereign Default
6.0
Economic Volatiliy
6.0

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