Economic challenges await South Sudan’s new government

South Sudan, a nation rife with economic struggles, is facing a new chapter as a fresh parliament assumes power under President Salva Kiir's latest peace agreement. The challenges awaiting the new legislature are immense, with record high unemployment rates and economic hurdles looming large on the horizon. Economic Affairs Analyst, Akol Dok, shed light on the pressing issues during a recent interview with CNBC Africa. One of the primary challenges facing the new legislature is the passage of a budget. With the parliament recently reconstituted, the urgent need to approve a budget in accordance with the transitional constitution of South Sudan presents a formidable task. Additionally, the government faces the dual challenge of funding both developmental and humanitarian initiatives in a post-conflict nation. The need to mobilize resources to support the peace agreement while funding new projects remains a critical concern for policymakers. South Sudan's heavy reliance on oil revenue further compounds the economic woes. With over 90 percent of government revenue derived from oil, the nation is recognized as the most oil-dependent country globally. In an effort to reduce this dependency, plans to diversify revenue sources and bolster economic sectors are underway. Initiatives to enhance non-oil revenue collection and promote economic diversification through investments in agriculture, mining, and tourism are being pursued. Collaborations with international partners and organizations are aiding in these endeavors to create a more sustainable and diversified economy. The fiscal outlook for South Sudan indicates a significant increase in spending compared to previous years. The forthcoming fiscal year is anticipated to witness heightened expenditure to support the expanded government structure outlined in the peace agreement. Special focus will be placed on funding critical projects such as infrastructure development, security arrangements, and efforts to assist displaced individuals affected by conflicts. Furthermore, the government aims to stimulate job creation, attract foreign direct investment, and advance economic diversification through targeted spending. External funding sources, including loans from international institutions, are expected to play a pivotal role in supporting South Sudan's economic agenda. However, recent announcements of aid cuts by major foreign donors like the UK pose a challenge to the nation's budgetary plans. The shortfall in aid contributions will necessitate alternative measures, potentially leading to deficit spending or increased reliance on loans to bridge the gap. Despite these obstacles, the South Sudanese government remains determined to navigate through turbulent economic waters and steer the nation towards a more stable and prosperous future.