In July 2011, South Sudan became the world’s newest country, following a long-awaited referendum on independence. With the support of various civil society leaders, national and international non-profits, as well as the United Nations Peacekeeping Mission, South Sudan is building itself and its institutions.
A new African Development Bank study entitled “South Sudan: A Study on Competitiveness and Cross Border Trade With Neighbouring Countries” examines the importance of regional integration for South Sudan, one of the African continent’s land-locked countries. Its current and foreseeable future trading partners in the region include Sudan, Uganda, Ethiopia, Kenya and to an extent the Democratic Republic of Congo (DRC) and the Central African Republic (CAR). With an open economy, a predominantly consumer society and a potential to diversify its goods and services, South Sudan is likely to become a formidable player in external trade in the region.
Within the present context, however, relations with its northern neighbour, Sudan, remain strained. Trade of goods, oil-sharing practices, and general resource-sharing came to a screeching halt when South Sudanese voted for independence from the North.
As the country struggles to get on its newly independent feet, reaching out to other neighbouring countries for trade and movement of goods has become even more crucial than before.
Because integration is very much related to the willingness of the independent sovereign states to share their sovereignty and trust each other, normalization of relations with its neighbours is a factor in South Sudan’s evolution.
Regional integration also depends on the country’s efforts to improve its physical infrastructure, as a means of enhancing competitiveness, address other challenges including insecurity and criminality along major transport corridors, simplify a complex taxation system, strengthen trade-related institutions and regulatory systems and uphold and enforce the rule of law.
Enforcing rule of law through regional cooperation is key to peace and stability, a prerequisite to any type of development. As neither the causes nor the consequences of violent conflict are bound by national borders, there is broad consensus that a regional approach is essential to effectively ensure global security. Only then can regional integration contribute to economic development.
Presently, the Government of South Sudan and its development partners are determined to offset the country’s trade imbalance by diversifying the economy away from oil, which currently accounts for about 90 per cent of all exports and 98 per cent of public revenue. The Government will mainly focus on agriculture, mining and services sectors as the new engines of growth, with a view of making South Sudan one of the most vibrant and diverse exporters in the region.
In order to gauge South Sudan’s export competitiveness, it is necessary to first understand the country’s overall competitiveness, and ascertain its contribution to the growth and performance of the export sector. This AfDB report therefore evaluates the “building blocks” necessary to establish a healthy competitive environment in South Sudan and identifies the factors that will enhance the capacity of the private sector to produce and provide quality goods and services in foreign markets at prices that will ensure long-term economic viability and sustainable development of the country.