South Sudan’s lost decade calls for impact investment

From left, Riek Machar, South Sudan President Salva Kiir and James Wani Igga in Juba, April 29, 2016. [Courtesy]

South Sudan gained its independence ten years ago, on July 9th 2011. It is the youngest nation in the world. Unfortunately, the vitality and promise of youth seem to be absent.

Today, there isn’t much to celebrate on this tenth anniversary to a point that President Salva Kiir himself has just referred to the last ten years as ‘a lost decade’. Nearly half a million lives have been lost in an unending civil war. Partly as a result of this state of affairs, one fifth of South Sudan’s 11 million people are refugees in other countries, including Kenya. This is akin to having ten million Kenyans living outside the country as refugees. That would definitely cramp the nation.

Of those who have decided to brave it in their country, 8.3 million people are dependent on humanitarian aid. Among them are 4.5 million children. These dire statistics were revealed by Unicef in a report released last week. The report further revealed that 2.8 million South Sudanese children are not in school.

Consequently, Sudan has the unfortunate distinction of having the highest proportion of out-of-school children in the world. This paints a bleak picture of the country’s future. In light of all these challenges, it’s no surprise that South Sudan is the second poorest country in the world, behind only Burundi.

South Sudan President Salva Kiir. [Courtesy]

Against this bleak backdrop, it’s no wonder that South Sudan ranks a dismal 186th in the World Bank’s ease of doing business ranking. This places it firmly in the unenviable position of being one of the fifth worst countries in the world to do business.

Even oil, which is South Sudan’s strong point, is foundering. Oil currently accounts for 70 per cent of South Sudan’s GDP and more than 90 per cent of public revenues. Such oil dependence has had disastrous consequences in the past.

Back in 2012, Sudan shut down South Sudan’s oil export pipelines. This was occasioned by a dispute between them. As a result of the oil pipes shutdown, South Sudan’s GDP declined by a staggering 50 per cent during the one year that the pipes were not operating. Since then, unstable global oil prices have stripped away 40 per cent of revenue.

Despite its ICU-like condition, South Sudan bristles with immense potential that can be tapped by unleashing two words – impact investment. Unlike normal investment, impact investment seeks to generate a social and environmental impact alongside the financial returns.

Through impact investment, South Sudan can boost its service sector, which currently accounts for 6.1 per cent of its GDP. Other contributors to the economy like agriculture can benefit from impact investment.

However, investment hates conflict. The Council on Foreign Relations Think Tank estimates that the death toll from ethnic clashes could be as high as 383,000. Even if this number is less, South Sudan would still be considered a conflict hotspot.

Riek Machar. [Courtesy]

As long as deadly ethnic clashes remain a part of the South Sudan society, it will be difficult to attract or create meaningful investment that can greatly aid in boosting revenue as it tackles pressing societal and environmental problems. One of these problems is healthcare.

In South Sudan, there is only one doctor for 65,574 citizens. This means that there is need for healthcare investment that will drastically lower this dismal doctor-patient ratio. A substantial increase in doctors will generate more jobs in the healthcare value chain, which will primarily benefit the people of South Sudan.

Of course, one may rightfully ask if there are skilled South Sudanese personnel. As a lecturer at the Kenya Foreign Service Institute, I trained various South Sudan diplomats on matters green investment. I know my students are green ambassadors wherever they are and that such opportunities for education-oriented investment still exist. Herein lies the power of impact investment – it treats every societal and environmental problem as an opportunity for investment that will be a solution. Hence, we must think and act green!