The Special Representative of the UN Secretary-General Ban Ki-moon reported to the UN Security Council last week that the South Sudanese government is unable to secure sufficient external financial support as the economic situation worsens.

Ellen Loej, who is also head of the UN Mission in South Sudan (UNMISS), warned that the worsening economic situation could lead to the “collapse of the social fabric of the country” and to the spread of insecurity into previously less-affected areas.

According to a transcript of her remarks, Loej stated, “The economic situation in South Sudan is deteriorating, particularly in view of the drop in oil revenues, heavy expenditure on defense and the inability of the Government to secure external financial support.”

She noted, “The gap between the official and unofficial exchange rates of the U.S. Dollar to the South Sudanese Pound (SSP) has widened and inflation is rising.”

Loej continued: “The situation will continue to decline if conflict continues and external assistance is not forthcoming. The international community must find ways to support the South Sudanese people to create an environment that eliminates the drivers of conflict and permits development.”

She recommended “enhanced [donor] support in critical areas such as health, education, and food production” in order to alleviate damage from the worsening economic situation.

Loej contended that this support should be given even if there is no peace agreement: “We cannot wait for a comprehensive agreement before focusing on these long term development imperatives.”

Earlier this year the South Sudanese government announced that it secured a $500 million dollar loan from Qatar, but this amount was not enough to cover its budget deficit for more than a few months.  

Related: 

War Economy: S Sudan increases money supply (31 March)

War Economy: South Sudan's budget is twice last year's oil earnings (30 March)

War Economy: Kiir's office spends more than budget of an entire state (28 March)