Managing Oil Savings

South Sudan is unique in many ways. A new country, landlocked, formed in very difficult conditions and still facing many unresolved issues with limited capacity in many areas. Highly dependent on oil for exports and fiscal revenues, it has recently experienced the destabilizing sequence of an oil-led spending boom in 2010 and 2011 followed by a sharp spending cutback in 2012 with the cut-off of oil exports. Its economy is heavily constrained, including the absence of essential infrastructure. Yet South Sudan also has other resources, including abundant land, water and, the most important resource, its people.

This policy note examines some potential avenues for South Sudan to make best use of its natural resource revenues, focusing on elements such as clear vision, good governance and sustainable fiscal management.