South Sudan's Economy Is Forecast to Grow 19% in 2026 as Oil Output Recovers, but Poverty Remains Widespread

The African Development Bank expects South Sudan's economy to expand by 19% in 2026, compared with 4% in 2025, as crude oil production and exports recover from disruptions caused by Sudan's civil war. The country is producing approximately 170,000 to 175,000 barrels daily and seeking investment to increase output towards 230,000 barrels. Yet its dependence on pipelines crossing Sudan, widespread food insecurity, unpaid public salaries and weak management of petroleum revenue raise questions about how much of the recovery will reach households. South Sudan's economy is projected to grow by 19% in 2026, one of the strongest growth rates anticipated anywhere in Africa, as recovering crude oil production reverses part of the economic damage caused by disruptions to its export infrastructure through neighbouring Sudan. The African Development Bank's Africa's Macroeconomic Performance and Outlook, released on November 13, forecasts that South Sudan's economic expansion will accelerate sharply from an estimated 4% in 2025, with petroleum production accounting for much of the improvement. The projection comes as the government seeks additional investment to increase output from approximately 170,000 barrels daily towards 230,000 barrels, despite continuing insecurity along the export routes connecting its oilfields to the Red Sea. The forecast places South Sudan among the countries experiencing the strongest expected economic recovery in 2026, but the underlying circumstances are unusual. Its economy contracted by an estimated 27.6% during the 2023/24 financial year after the war in Sudan disrupted crude transportation, cutting access to the country's principal source of export earnings and government revenue. Production subsequently recovered as some transportation infrastructure returned to service, allowing economic output to expand from a substantially reduced base. The latest forecast therefore reflects a recovery in petroleum activity following an exceptionally severe contraction, rather than evidence that South Sudan's economy has developed a diversified industrial or commercial base. The distinction matters because South Sudan remains overwhelmingly dependent on petroleum. According to the AfDB's July 2026 South Sudan Country Focus Report, oil accounts for more than 80% of measured GDP, approximately 95% of exports and between 70% and 80% of government budget revenue. A disruption to petroleum production consequently affects national output, foreign exchange receipts and the government's ability to finance public expenditure simultaneously. Conversely, restoring production can produce an unusually large increase in GDP even when agriculture, manufacturing, trade and household living conditions remain under considerable pressure. The African Development Bank's November forecast also differs from some earlier assessments because of reporting periods and updated assumptions about production. Its July country report projected growth of approximately 20% in the 2025/26 financial year, while the bank's country outlook used projections of 22% for 2025/26 and 6.8% for 2026/27. These financial year projections should not be treated as directly equivalent to the November report's calendar year growth estimate of 19% for 2026. The underlying expectation is nevertheless consistent: restoration of petroleum output is expected to drive a substantial economic rebound, provided the export system continues operating. South Sudan's situation illustrates how an economy dependent on a single commodity can generate spectacular growth figures while remaining exposed to severe financial and humanitarian problems. The country has substantial petroleum resources and opportunities for additional production, but it relies on infrastructure extending through territory affected by another country's civil war. Its government also faces constraints involving public financial management, currency instability, limited domestic revenue outside petroleum and the cost of providing services to a population affected by prolonged conflict. Oil Production Has Recovered, but South Sudan Wants Another 60,000 Barrels Daily The recovery in crude production provides the strongest explanation for the revised growth outlook. The African Development Bank estimates that petroleum output increased from approximately 61,000 barrels daily during the period of severe disruption to 156,000 barrels daily as exports resumed. More recent industry reporting places production between 170,000 and 175,000 barrels daily, reflecting further improvement in operations across the country's principal producing areas. In November 2026, the government began seeking new investment to expand production and modernise petroleum infrastructure. Industry publication World Oil reported on November 9 that South Sudan was targeting an increase from approximately 174,000 barrels daily to 230,000 barrels, while offering 14 exploration blocks to potential investors. The programme includes rehabilitation of mature producing fields, additional exploration, improvements to oilfield equipment and investment in associated transport and processing facilities. SOUTH SUDAN'S OIL RECOVERY IN NUMBERS 19% AfDB projected GDP growth in 2026 174,000 Approximate current barrels per day reported in November 230,000 Near term daily oil production target 14 Exploration blocks being offered to investors Sources: African Development Bank, November 13, 2026; World Oil, November 9, 2026. Current production and future targets are separate measures. The increase from 174,000 to 230,000 barrels daily would represent approximately 32% additional production capacity if achieved and sustained. At a purely illustrative oil price of $70 per barrel, the additional 56,000 barrels would have a gross sales value of approximately $3.92 million daily, equivalent to $1.43 billion annually at continuous production. These figures represent potential gross crude sales, not government revenue, company profits or additional GDP. Actual earnings would depend on realised prices, production volumes, transportation charges, operating costs and the division of crude between the government and its production partners. South Sudan's producing oilfields are operated through several joint ventures, including Dar Petroleum Operating Company, Greater Pioneer Operating Company and Sudd Petroleum Operating Company. Their operations involve international petroleum companies and the state owned Nile Petroleum Corporation, commonly known as Nilepet. Production is concentrated in areas including Upper Nile, Unity State and the Ruweng Administrative Area, where petroleum infrastructure is linked to export pipelines extending northwards through Sudan. The expansion programme also includes proposals for a 350 kilometre pipeline linking the Tharjiath fields in Block 5A with the Paloch fields in Blocks 3 and 7. Such infrastructure could improve connectivity between producing areas, although its commercial viability will depend on additional financing, projected production and the availability of an uninterrupted export route. South Sudan's oil industry is preparing to present these investment opportunities at the South Sudan Oil & Power conference in Juba on November 24 and 25. The event will bring together government institutions, existing operators, financiers and potential investors to discuss production expansion and petroleum infrastructure. The timing is relevant because investment in mature oilfields is required to maintain or increase production as existing wells experience natural decline and equipment requires replacement. However, investment in additional production capacity will generate limited economic benefits if the country cannot reliably export the resulting crude. That constraint has become particularly serious since Sudan's civil war began in April 2023. Sudan's Civil War Has Turned South Sudan's Oil Export Route Into an Economic Liability South Sudan is landlocked, and its commercially produced crude must travel through pipelines crossing Sudan before reaching marine export facilities on the Red Sea. The system was established before South Sudan gained independence in July 2011, leaving the two countries economically connected through petroleum production, transportation and processing arrangements. South Sudan controls substantial upstream resources, while Sudan possesses infrastructure required to move much of that crude to international markets. This arrangement creates financial obligations even during periods of relatively stable relations. South Sudan pays transportation, processing and transit charges under agreements governing the use of Sudanese infrastructure. According to the United Nations Panel of Experts' 2026 reporting, the applicable fees for crude transported from South Sudan's Upper Nile fields include $6.50 per barrel for transportation, $1.60 for processing and $1 for transit, producing a combined charge of $9.10 per barrel. Different tariff arrangements apply to crude originating from Unity State. These payments reduce the value retained by producers and the South Sudanese government from each barrel exported. The war in Sudan has added physical and political risks to these established commercial costs. Fighting has damaged infrastructure, prevented engineers from accessing facilities and disrupted operations along pipeline corridors. In June 2026, petroleum market intelligence company Argus reported that approximately 100,000 barrels daily of South Sudan's Dar Blend crude remained unable to reach the Bashayer export terminal because of problems along the Petrodar pipeline and insecurity around the Khartoum refinery. South Sudanese Petroleum Ministry Undersecretary William Anyak Deng said that major pipeline repairs had been undertaken, but continuing fighting prevented the remaining work required to restore exports at that time. The situation subsequently changed, with additional production and exports reported during the second half of 2026. However, the restoration of some flows has not removed the underlying exposure. Petroleum transportation infrastructure passes through areas controlled or contested by different armed forces, giving developments in Sudan direct consequences for South Sudan's export earnings and public finances. In September, Sudan Tribune reported that the Rapid Support Forces were collecting approximately $4 per barrel on crude transported through areas under their control, citing unnamed oil industry sources. The report described arrangements under which part of the transit revenue that had previously gone to Sudanese authorities was being redirected. These claims have not been independently established through publicly available audited payment records, but they indicate the financial risks associated with transporting an economically essential commodity through territory affected by competing armed groups. The scale of South Sudan's exposure becomes clearer when production and export figures are compared. November industry reporting placed domestic crude production at approximately 170,000 barrels daily, while tanker tracking recorded eight cargoes carrying a combined 4.8 million barrels from Sudanese Red Sea terminals during October. The latter figure includes crude associated with Sudan as well as South Sudan and therefore cannot be used to calculate South Sudan's exports directly. Differences between wellhead production and marine shipments can also arise from storage movements, pipeline operations and timing. The lack of a consistently reconciled public record connecting production, transportation and export shipments creates difficulties for assessing petroleum revenue. Production may recover at oilfields while transportation is disrupted, and exported cargoes may generate payments at different times depending on contractual arrangements. Government revenue can also be affected by cost recovery, prepayments and other financial obligations. For South Sudan, this means the economic value of additional petroleum production depends heavily on factors outside its immediate control. Increasing output from 174,000 to 230,000 barrels daily would provide additional potential export revenue, but only if pipeline operations, processing facilities and Red Sea shipments remain available at sufficient capacity. Alternative export routes have been discussed for years, including potential pipelines towards Kenya or Djibouti. Such projects could reduce dependence on Sudan but would require substantial capital expenditure, reliable long term production volumes and commercial agreements with transit countries. The World Bank has previously identified the high estimated costs and production requirements associated with alternative pipeline proposals, making diversification a difficult proposition for a country already facing severe financing constraints. Oil Accounts for Most Export Revenue, but Public Salaries Remain Unpaid South Sudan's extreme petroleum dependence makes the relationship between oil earnings and government expenditure central to its economic prospects. Oil accounts for approximately 95% of exports and between 70% and 80% of budget revenue under the AfDB's 2026 estimates. This means interruptions to exports can rapidly affect the availability of foreign currency, the government's ability to finance public services and the stability of the domestic economy. The consequences became particularly severe after the 2023 and 2024 pipeline disruptions. In March 2025, the World Bank estimated that reduced oil exports had resulted in approximately $7 million in lost export earnings daily during the disruption, contributing to a sharp contraction in economic output and placing pressure on public salaries and essential services. The bank reported that public finances had weakened considerably, while inflation and poverty had intensified. The recovery of petroleum production during 2026 has not automatically resolved these problems. In August, the Famine Early Warning Systems Network reported that government employees continued facing unpaid salaries despite rising petroleum production, while currency depreciation, limited financial liquidity and higher living costs were weakening household purchasing power. Its assessment also identified significant cash shortages within the banking system and continuing difficulties financing ordinary commercial transactions. The World Bank's February 2026 Public Finance Review provides an institutional explanation for some of these difficulties. The review identified weak management of oil revenue, limited fiscal transparency, expenditure imbalances and the diversion of public resources away from essential services. It reported that government spending averaged approximately 35% of GDP, with substantial allocations to administration, security and related functions while healthcare, education and social protection remained severely underfunded. The institution also documented widespread salary arrears and declining real wages among public employees. The findings demonstrate why additional oil production does not automatically produce improvements in government services. Petroleum revenue must first be collected, accounted for and transferred through public financial systems before it can support expenditure. Existing obligations to creditors, production partners and other counterparties can also reduce the funds available to the Treasury. The World Bank has recommended that South Sudan transfer all petroleum receipts into the National Revenue Fund, publish quarterly oil revenue data, report government expenditure more consistently and subject oil prepayment arrangements to parliamentary oversight. These measures are intended to improve the relationship between petroleum exports and publicly accountable spending. The use of oil backed financing presents additional challenges. South Sudan has entered arrangements under which international commodity traders provide advance payments in exchange for future deliveries of crude. Such financing can provide immediate foreign currency, but it also commits part of future production or export receipts to settling obligations already incurred. In July 2026, Reuters reported that international oil trader BB Energy had reached a settlement involving three cargoes of South Sudanese crude following litigation over previous advance payment arrangements. The agreement allowed South Sudan to receive prepayments for other cargoes subject to the settlement conditions, illustrating how disputes over promised deliveries can affect the government's access to petroleum financing. These financial arrangements complicate the relationship between gross petroleum sales and government revenue. A rise in production can increase the value of crude exported, but some receipts may already be committed to production costs, transport tariffs, creditor payments or earlier financing arrangements. Measuring the economic gains from petroleum therefore requires information about net government receipts and expenditure, rather than crude volumes alone. A 19% GDP Rebound Does Not Reverse South Sudan's Poverty Crisis South Sudan's projected growth rate is especially difficult to interpret without considering its recent economic contraction. The AfDB estimates that real GDP declined by 27.6% during the 2023/24 financial year before recovering by approximately 4% in 2024/25. The latest 19% forecast reflects further recovery in petroleum production from that reduced base. An economy that contracts severely can subsequently record a very high growth rate while remaining smaller than it was before the original decline. For example, an economy that falls from an index value of 100 to 72.4 after a 27.6% contraction would reach only about 89.6 after subsequent increases of 4% and 19%. This illustration uses simplified consecutive growth periods and is not a reconstruction of South Sudan's official national accounts, but it demonstrates why recovery rates must be interpreted in relation to earlier losses. The distinction is particularly relevant to household welfare. According to the AfDB's country outlook, approximately 92% of South Sudan's population was living below the national poverty line in 2025. The country also continues facing severe food insecurity, unemployment and limited access to basic services. Although petroleum output contributes heavily to measured GDP, the industry is capital intensive and does not directly employ a workforce comparable with agriculture or many labour intensive service industries. The Food and Agriculture Organization's September 2026 country assessment estimated that approximately 7.8 million people, equivalent to 55% of the population, faced crisis or worse levels of acute food insecurity during the April to July lean season. Around 73,000 people were estimated to be experiencing catastrophic levels of food insecurity, with famine risks identified in selected counties of Upper Nile and Jonglei states under plausible adverse conditions. The assessment attributed the deterioration to conflict, displacement, high food and fuel prices, disrupted trade and repeated climate shocks. These conditions explain why petroleum output can recover while many households continue facing worsening economic circumstances. Oil production generates substantial value at a relatively small number of industrial facilities, while household incomes depend on agriculture, livestock, informal trade, wages and access to functioning markets. When violence prevents farmers from cultivating land or traders from moving food, an increase in crude exports may have little immediate effect on food availability in affected communities. Currency instability can also weaken the purchasing power of any income generated. When the South Sudanese pound depreciates, imported food, fuel, medicines and other products become more expensive in domestic currency. Government employees whose salaries remain unpaid or fail to keep pace with inflation may experience substantial financial hardship even as national output increases. The available evidence therefore supports a distinction between petroleum recovery and economic improvement across the population. Higher output can strengthen national income and foreign exchange availability, but the benefits depend on functioning public institutions, reliable supply networks, agricultural production and the extent to which revenue finances services and productive investment. South Sudan's economic challenge is consequently larger than restoring crude production to previous levels. The country must also improve domestic food supply, rebuild essential infrastructure, strengthen financial institutions and create opportunities for businesses operating outside petroleum. South Sudan Seeks New Investment While Its Export Risk Remains Unresolved The government's current petroleum investment programme reflects both the economic opportunities available in South Sudan and the constraints affecting their development. With approximately 3.5 billion barrels of proven oil reserves reported in industry assessments, the country possesses substantial resources that could support production over an extended period. However, existing fields require maintenance and additional investment, while new exploration involves geological, commercial and security risks. The government is seeking partners for 14 exploration blocks, improvements to existing fields, refinery development, petroleum storage and distribution infrastructure. The proposed increase to 230,000 barrels daily represents a commercial target rather than production capacity already secured through completed investment agreements. The financing environment has also begun changing. The African Petroleum Producers' Organization and Afreximbank formally established the Africa Energy Bank in October 2026, with authorised capital of $5 billion and plans to begin financing activities in 2027. Although the institution could eventually provide an additional source of capital for petroleum infrastructure across Africa, no specific financing commitment to South Sudan had been established in the November reports reviewed. New financing alone will not resolve the physical and security constraints affecting South Sudan's petroleum exports. Investors must consider the reliability of production facilities, the availability of export routes, security conditions and the financial arrangements governing crude transportation. Where a project depends on infrastructure crossing an active conflict zone, commercial risks can remain substantial regardless of the quality of the underlying oil reserves. The government also faces decisions about the allocation of future petroleum revenue. Additional output could finance roads, electricity, agricultural infrastructure, healthcare and education, provided sufficient receipts enter the public budget and are directed towards projects capable of improving living conditions. Alternatively, continuing weaknesses in financial management, expensive prepayment arrangements and interruptions to exports could reduce the resources available for public investment. For neighbouring East African economies, South Sudan's recovery has implications beyond crude oil. Uganda and Kenya are important suppliers of food, consumer goods and transport services to South Sudanese markets. A more stable South Sudanese economy could support additional regional trade, while improvements in the availability of foreign currency and government payments could strengthen commercial demand. However, renewed conflict, inflation or export interruptions can rapidly undermine those opportunities. The African Development Bank's 19% growth forecast consequently captures a substantial recovery in petroleum production following one of the region's most severe economic contractions. It does not establish that South Sudan has resolved the problems affecting its public finances, currency, export infrastructure or household welfare. The country's current production recovery demonstrates how quickly measured economic output can respond when an important export industry resumes operations. Its longer term economic prospects will depend on the reliability of the infrastructure carrying crude through Sudan, the financial terms governing petroleum sales and the government's capacity to convert export receipts into public services and productive investment. With approximately 170,000 to 175,000 barrels being produced daily and plans to reach 230,000, South Sudan has an opportunity to increase petroleum earnings and restore part of the output lost during recent disruptions. The next test is whether that recovery can be sustained while the conflict across its northern border continues, and whether additional national income can strengthen an economy in which millions of people remain exposed to poverty, food insecurity and weak public services.