The world’s youngest country is facing one of the world’s worst economic crises.
The East African country, which broke off from Sudan in 2011 after decades of civil war, is battling severe floods, a collapsing currency and a catastrophic falloff in revenue from oil, its main export.
While many countries are in fiscal trouble, South Sudan’s woes are at a whole other level. Civil servants haven’t been paid in a year. Authorities have canceled a presidential election, saying they don’t have enough cash to register voters. Unpaid soldiers are abandoning outposts in the countryside and flocking to towns in search of food. Police have walked off the job, allowing criminals to run rampant. Public-school teachers and health workers have been on strike for months.
Desperate for revenue, the government has imposed a $300 levy on every international aid truck as it enters the landlocked country, and again as it leaves. Aid agencies say the truck tax adds $339,000 a month to the cost of keeping impoverished South Sudanese alive.
The government is also now taxing vehicles and supplies belonging to the 14,000-strong United Nations peacekeeping force stationed in the country. Peacekeepers, short of money to buy gas, have halted daily security patrols around dozens of camps that host nearly 200,000 people from war-torn Sudan.
“Our economy is under pressure,” said Finance Minister Marial Dongrin Ater in a televised speech recently. “The president wants us to increase non-oil revenue mobilization. I am determined to implement his directive.”
The decision to tax the hand that feeds it has put South Sudan at odds with its biggest donors. The U.S., which has contributed over $508 million in aid to South Sudan this year, has restricted entry visas for officials responsible for the decision.
“As South Sudan’s leaders vie for power and fail to organize credible and peaceful elections, the people of South Sudan suffer the consequences,” the U.S., U.K. and Norway said in a joint statement last month. “Millions face acute food insecurity year after year,” the statement said. The three countries accused South Sudan’s leaders of using the fiscal crunch to cover for a lack of political will to hold elections.
South Sudan was scheduled to hold elections in December to pick leaders to succeed the current transitional government, headed by President Salva Kiir and First Vice President Riek Machar. Kiir and Machar’s armed allies fought a five-year civil war against each other, and the 2018 peace accord that brought an end to the fighting set a schedule for elections.
The first electoral delay came in 2022, and last month the government again pushed elections back, this time until 2026.
Oil exports, which usually account for more than 90% of government revenue, were halted in February following damage to a key pipeline that carries about two-thirds of South Sudan’s 150,000 barrels-a-day of oil exports through Sudan, its war-torn neighbor, to an export terminal on the Red Sea. The damaged section which lies in Sudan, which is battling a civil war, is in an active combat zone and would require months of complex repairs, according to analysts and government officials.
Regional analysts worry that disrupted oil exports could reignite the civil war, which began with factions fighting over reduced oil revenues and ended up killing 400,000 people.
“This is a very difficult moment in South Sudan’s nation-building history,” said Daniel Akech, South Sudan analyst at the International Crisis Group, a Brussels-based think tank. “Without the oil exports, it will be difficult to fund the transitional government. The only way to get out of this crisis is to resume oil exports.”
South Sudan tops the list of countries worst hit by food-price spikes, according to the World Bank. After food inflation soared past 164% in July, sending prices of staples such as sorghum and beans to levels unseen since independence, authorities deployed police to markets to discourage price gouging, according to officials and residents.
Unpaid for almost a year, hundreds of troops and police have since abandoned their duties.
“The situation was unbearable,” said a 38-year-old former South Sudanese soldier, now working as a truck driver in neighboring Uganda. “I had to get out of there to find means of looking after my family. In my entire career, I had never waited this long for my salary.”
With security officers walking off the job, robberies and banditry have spiked. The U.N. has recorded more than 230 attacks on aid agencies during the first half of 2024, including holdups of aid convoys and pillaging of food stores.
Doctors Without Borders says medical-delivery trucks are frequently targeted. Last week, the charity halted operations in one southern region after two of its vehicles were hijacked and looted. It was the third attack in the region in as many months.
Spiraling food prices and historic flooding triggered by the El Niño weather effect, bringing heavy rains to South Sudan and drought conditions farther south, have left 75% of South Sudan’s 12 million people dependent on humanitarian aid, according to the U.N.
For generations, people living on South Sudan’s fertile plains have relied on fishing during flood seasons and sorghum cultivation when waters receded. But in recent years, they haven’t been able to count on either source of income, as record water levels in Lake Victoria, which straddles Uganda, Kenya and Tanzania to the south, flow downstream, forcing millions out of homes and inundating farmlands.
This year’s floods, which have engulfed 38 of South Sudan’s 70 counties, have already forced nearly a million people to flee to crowded shelters on higher ground, with no basic supplies. Oxfam, an international aid group, has documented more than 40 deaths from starvation in one county alone in the past three months.
“The heavy rains have made things worse, dealing a final blow to thousands of people already starving,” said Manenji Mangundu, Oxfam’s country director in South Sudan. “The situation is particularly worse in shelters where people are crammed with no proper food, water or sanitation.”
The South Sudanese government has yet to deliver the $76 million it promised to dispatch in July to assist flood victims, according to U.N. officials. The U.N.’s World Food Program says it has less than half of the more than $680 million it requires to assist millions facing food shortages.
Supply shortages have spiraled into deadly clashes. National authorities are investigating an incident in August in which rival clans fought over fishing rights on the flood plains of Jonglei State, leaving four dead and dozens injured.
The economy contracted by 5% between last year and this year, according to the finance ministry. The central bank has run out of reserves to support the local currency, which has lost more than 80% of its value against the dollar since January. Inflation has soared past 90%.
The economic emergency underscores the increasingly precarious situation for the 73-year-old President Kiir, who is under international pressure to steady the country amid allegations that he has steered valuable government contracts to loyalists and his own children.
Kiir has previously denied the accusations. His spokesman couldn’t be reached for comment.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com