Narrow Path to Recovery: Climate Action and Fiscal Reform at the Heart of South Sudan’s Economic Survival

South Sudan is approaching a defining moment. Two new reports from the World Bank Group warn that without urgent climate-smart action and deep public finance reform, the country risks sliding further into economic collapse, fragility and prolonged humanitarian distress.

The Public Finance Review and the Country Climate and Development Report, released today, present a stark assessment. Climate shocks are no longer episodic. They are systemic, and they are colliding with weak fiscal governance to intensify conflict, displacement and poverty across the country.

Flooding, rising temperatures and increasingly unpredictable weather patterns are already reshaping livelihoods in South Sudan. Women, pastoralists and communities dependent on natural resources are bearing the brunt. These pressures compound long-standing structural failures in public finance management, despite the country’s vast oil wealth.

The climate report projects that South Sudan will need more than US$13 billion in climate adaptation investment by 2050. Extreme flooding, now described as the new normal, can submerge up to a quarter of the country in severe years. Entire communities are cut off from markets, health care and education. Food insecurity deepens as livelihoods are destroyed and supply chains break down.

Climate change is also projected to undermine economic productivity. Under hotter climate conditions, sorghum yields are expected to fall by eight percent by mid-century. Livestock revenues and labour productivity are set to decline, further eroding household incomes in a country where survival already depends heavily on climate-sensitive sectors.

Alongside climate risks, the Public Finance Review highlights severe macroeconomic fragility driven by extreme dependence on oil, governance gaps and repeated disruptions to export infrastructure through Sudan. Public spending averages 35 percent of GDP, but the allocation is heavily skewed towards administration, security and rule of law. Health, education and social protection remain chronically underfunded.

The report documents widespread salary arrears and a collapse in real public sector wages, weakening state capacity and frontline service delivery. Opaque revenue management and weak budget discipline have further eroded trust with citizens and development partners.

The government has acknowledged the scale of the challenge. Benjamin Ayali Koyongwa, Undersecretary of Planning in the Ministry of Finance, said the review offers a practical roadmap for restoring stability. He stressed the government’s commitment to accelerating public financial management reforms, strengthening budget discipline and rebuilding confidence in state institutions.

The Public Finance Review calls for decisive action to stabilise inflation, support the exchange rate and restore credibility. Central to this is transparent oil revenue management, regular payment of public sector salaries, publication of budget execution and financial reports, and avoiding non-concessional or oil-backed borrowing that undermines future revenues. Parliamentary oversight of oil sales and prepayment arrangements is also identified as critical.

The climate report points to a different kind of wealth. South Sudan’s fertile land, water systems and renewable energy potential are described as engines of inclusive growth if managed responsibly. Climate-informed development, the report argues, is not optional. It is the only viable pathway to resilience.

Priority areas include strengthening flood management and early warning systems, investing in climate-resilient agriculture and livestock systems, expanding off-grid renewable energy, accelerating governance reforms to redirect spending towards climate-smart investments, and ensuring sustainable use of forests, fisheries and wildlife to support rural livelihoods.

According to Charles Undeland, South Sudan has reached a pivotal moment. Climate change is no longer a distant threat but a daily economic reality. He said improved public financial management, stronger institutions and protection of essential services could still place the country on a more resilient and sustainable development path, with continued support from the World Bank Group.

For Africa, South Sudan’s predicament is a reminder of how young states inherit deep structural vulnerabilities while facing a rapidly changing climate. Recovery will not be quick, nor easy. But with transparent governance, climate-smart investment and a clear commitment to people-centred development, even the narrowest path can still lead forward. For a continent where resilience is often forged under pressure, South Sudan’s choices today will shape not only its future, but the lessons Africa carries into an increasingly climate-defined world.