South Sudan: The Birth of an Economy

One can learn a lot about the economy of South Sudan just by watching the roads. The first thing one notices on the streets of Juba, the capital, is the abundance of white Toyota Land Cruisers. There are fewer than 100 kilometers of tarmac roads in the entire 240,000-square-mile country; one cannot move around without a four-wheel-drive vehicle. A closer look at the Land Cruisers reveals that most have special license plates: UN for United Nations vehicles, and GOSS for those owned by the government of South Sudan.

Apart from the Land Cruisers, one notices a large number of water and fuel tankers on the roads. Publicly supplied electricity in Juba, a city of one million, is very limited, public water nonexistent. As a result, almost all workplaces and the wealthier private residences rely on generator power and water delivered by truck. The road traffic also reveals how waste is managed in Juba. Whereas some aid agencies and hotels have contracts with garbage collectors, most waste is piled in the streets and burned.

As in the big cities of many developing countries, driving in Juba is a daunting experience. There are essentially no road signs or traffic lights, and only one street has streetlights. What’s more, although traffic travels on the right side of the road, most drivers sit on the right-hand side of the car, as most vehicles are imported from Kenya, where right-hand driving is standard.

When we turn our attention to the people traveling on these highly informative roads, other issues become apparent. For one thing, there is no formal taxi network in Juba. Instead, a few enterprising Kenyans and Ugandans have established themselves as private taxi drivers. And foreigners do not dominate only low-skilled service jobs; most heavy machinery on South Sudan’s roads is also operated by foreigners, particularly Asians. Indeed, the largest firms in most of the booming sectors of the economy are foreign owned and operated.

Venturing outside Juba, one gets an idea of what the roads were like before the recent bout of postwar reconstruction. First of all, South Sudan has few roads linking small villages with larger towns, which leaves a large percentage of the population completely isolated from the modern economy. Even where roads do exist, they are unpaved, unevenly surfaced, and poorly marked. Traveling from the northern border to the capital in the South, a journey of less than 1,000 miles, can take three weeks in a land vehicle, compared to two hours by plane. During the rainy season, many places are completely cut off from road traffic. Malakal, for example, South Sudan’s third largest city, with a population of 125,000, essentially grinds to a halt for three months of each year when its roads turn to sticky mud. During this time, people travel about in the same slow, tiring way they have for hundreds of years: by foot or mule.

Navigating South Sudan’s roads between cities and across borders is also rather expensive, due to the numerous points where travelers are subject to extortion. A committee recently formed by the country’s president found 44 authorized and 65 unauthorized tax collection points in just two states, Eastern Equatoria and Central Equatoria.¹

From its poor infrastructure and lack of regulation to skill shortages and corruption, doing business in South Sudan is not easy. Furthermore, the South Sudanese do not produce any export goods. However, this observation overlooks one major factor: despite the difficult conditions in South Sudan, the country is experiencing a significant amount of economic activity. In this article, we discuss the birth of a new economy in a society that has only recently emerged from a 22-year civil war. The pace of growth so far has been fast but uneven: aid and oil money is flowing rapidly into certain sectors, while other areas of the economy that could generate jobs, particularly agriculture, have barely changed in centuries. As a result, the recent...