Falling global oil prices would likely impact the economy of South Sudan, which relies on oil exports in particular for government revenues, an economist said.
The drop of oil prices, stirred by the coronavirus pandemic and the Saudi-Russia price war, leaves the world's oil-exporting countries facing an uncharted recovery path to navigate.
Oil prices currently average $25 to $30 a barrel, maintaining their historic low and hurting producers around the world.
Professor Marial Awou told Radio Tamazuj on Thursday that because 98% of the country’s economy depends on oil production and revenue, the transitional government of national unity would be hit hard by the current crisis.
"We have a bloated transitional government, six people in the presidency, 550 members of parliament and cabinet ministers. All these institutions need funds and so how can the government operate while it does not have any other sources of income other than oil?" He asked.
Marial, who is also the Vice Chancellor of Upper Nile University, criticized the government's policy of relying heavily on the oil sector while neglecting the agriculture, tourism and mining sectors.
According to the economist, the revitalized peace agreement signed in September 2018 may collapse if oil prices remain at current levels. He pointed out that the unity government needs funds to implement peace programs.
The South Sudanese academic urged all parties to the peace agreement to have a sense of responsibility and find ways of rescuing the situation.
Steps toward key benchmarks in the peace deal – unifying armed forces and establishing key institutions – are lagging far behind schedule due to disputes and lack of funds.