JUBA, February 5- Two new World Bank Group reports released today underscore that South Sudan stands at a critical crossroads, where restoring public finances and taking urgent, climate-smart action are essential to reversing economic decline and placing the country on a sustainable development path. The new Public Finance Review (PFR) and Country Climate and Development Report (CCDR) warn that intensifying climate shocks, combined with weak fiscal management, is driving a dangerous cycle of fragility, conflict, displacement, and deepening poverty.
The reports find that devastating floods, rising temperatures, and increasingly frequent climate shocks are already reshaping livelihoods, weakening the economy, and heightening social vulnerability-particularly for women, pastoralists, and resource-dependent communities. These pressures are compounding long-standing structural constraints: despite vast oil resources, South Sudan's development has stalled due to fragile institutions, opaque revenue management, misallocation of public spending, and elevated macroeconomic vulnerabilities.
The Country Climate and Development Report (CCDR) projects that South Sudan will require over US$13 billion in climate adaptation investments by 2050. Extreme flooding, now considered the 'new normal' covers up to one-quarter of the country in severe years, cutting communities off from essential services, damaging livelihoods, and contributing to widespread food insecurity. Climate change is also projected to cause substantial declines in labor productivity, livestock revenues, and crop yields, including an 8% reduction in sorghum yields by 2050 under hotter climate conditions.
The Public Finance Review (PFR) documents how volatility and eroded fiscal space have been driven by extreme oil dependence, combined with underinvestment, disruptions to Sudan's export infrastructure, and governance gaps. According to the report, public spending averages 35% of GDP but is skewed toward administration, security, and rule of law, while health, education, and social protection remain severely underfunded. Salary arrears are widespread, and average public wages have collapsed in real terms.
"The PFR provides a timely and actionable roadmap for restoring economic stability in South Sudan. As a government, we are committed to taking immediate steps by accelerating the implementation of Public Financial Management (PFM) reforms and strengthening budget discipline. These reforms are essential to rebuild trust, stabilize our economy, and deliver basic services to our people," said Honorable Benjamin Ayali Koyongwa, Undersecretary of Planning in the Ministry of Finance, Republic of South Sudan.
The PFR recommends the government take action to help stabilize inflation, strengthen the exchange rate, rebuild trust with partners, and open the door for deeper reforms, including: Committing to transferring all oil revenues into the National Revenue Fund and publishing quarterly oil data to rebuild confidence in resource management; Prioritizing monthly salary payments to stabilize public administration and frontline service delivery; Publishing budget execution reports, annual financial statements, and the full list of capital projects to strengthen transparency and accountability; Refraining from entering any new non-concessional or ‑oil-backed‑ borrowing agreements that jeopardize future revenues; Following procurement rules for crude oil sales and ensure Parliamentary oversight for all prepayment arrangements.
"South Sudan stands at a pivotal moment - climate change is no longer a distant threat, it is a daily reality, reshaping the country's economy and communities. However, by improving public financial management, prioritizing climate-smart policies and investments, strengthening institutions, and protecting essential services, South Sudan can place itself on a more resilient and sustainable development path," said Charles Undeland, World Bank Group Country Manager for South Sudan. "The World Bank Group stands ready to continue supporting the government in these critical steps," he added.
The CCDR underscores that South Sudan's natural wealth is in its fertile land, water systems, and renewable energy potential which can be engines of growth. The report highlights inclusive, climate-informed growth as a key pathway to greater resilience for South Sudan. It identifies five priorities to address the climate impact in South Sudan:
- Strengthen flood management, including early warning systems, community‑led preparedness, and rehabilitation of critical infrastructure.
- Invest in climate‑resilient agriculture and livestock systems, including improved seeds, sustainable grazing systems, and better access to water.
- Scale up off‑grid renewable energy solutions, essential for resilience, health services, education, and economic diversification.
- Accelerate governance and public financial management reforms to direct more resources toward climate‑smart investments.
- Enable responsible, sustainable use of natural capital especially forests, fisheries, and wildlife to support rural livelihoods and expand economic opportunities.
The World Bank Group Country Climate and Development Reports (CCDRs) are a core tool for integrating climate and development. CCDRs assist countries in identifying and prioritizing actions that address greenhouse gas emissions and adaptation needs in ways that align with broader development objectives. These reports provide data, research, cost assessments, and suggest priority actions to facilitate a low-carbon, resilient transition. They are intended to guide governments, the public, private sector, and partners by feeding into the World Bank's diagnostics and operations to enhance funding for effective climate action.
