Exiting the cycle of conflict in South Sudan: diversifying trade for sustained and inclusive prosperity

Working and discussion papers
April 2015
Yurendra Basnett and James Alic Garang

The violence in South Sudan in 2013 punctured the euphoria surrounding the ending of 21 years of conflict (1983–2005) and the emergence of South Sudan as an independent nation in 2011. The economic factors contributing to the political instability have been apparent since independence, yet they have not been addressed with any urgency. On the one hand, the traditional sources of livelihoods such as farming and cattle-rearing remain devastated. On the other, the flooding of the economy with revenue from oil exports has skewed incentives towards capturing rents. Falling oil reserves, as well as price volatility, are adversely affecting South Sudan’s economy. Arresting the deteriorating situation will require investing oil revenues and aid resources in building capacity to diversify production and trade.