Explainer: South Sudan’s debt burden and sovereign vulnerability

Summary:

The Republic of South Sudan, as of October 2025, continues to face a critical sovereign debt crisis, characterised by extreme vulnerability and complex legal threats. The nation is officially classified by the joint World Bank/IMF Debt Sustainability Analysis (DSA) in 2021 as being at a high risk of external and overall public debt distress. 

The official macroeconomic projections estimate the debt-to-GDP ratio at approximately 58 per cent of GDP for the 2024/2025 fiscal year, signalling large vulnerabilities. This macroeconomic fragility is further evidenced by a projected net lending/borrowing (overall balance) deficit of 6.64% of GDP in 2025, indicating high dependence on external or domestic financing.

The core issue driving the crisis, however, is not the official debt but an extensive portfolio of opaque, non-concessional commercial liabilities. This outstanding oil-backed debt stands near US$2.3 billion. These liabilities have recently matured into major international legal judgements, including a US$1 billion arbitration award for Qatar National Bank (QNB) and a US$657 million court order for the African Export-Import Bank (Afreximbank).

The combined total of these enforceable judgments, exceeding $1.65 billion, poses an immediate threat to the nation’s liquid assets and oil export streams.

This profound debt distress is identified as a direct consequence of systemic governance failure, specifically the persistent non-implementation of the Petroleum Revenue Management Act (PRMA) of 2013. The failure to operationalise mandated Sovereign Wealth Funds (SWFs) created a crucial fiscal vacuum, which was subsequently filled by high-interest, non-transparent borrowing.

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