Integrating IDA Private Sector Window to the Famine in South Sudan

1. Integrating IDA Private
Sector Window
to the
Famine in South Sudan

2. Review of South Sudan
 According to the World Bank, South Sudan’s GDP for 2014 was $1,111.
 Their economy is heavily dependent on oil ( 60%).
 The current conflict has impacted their economy greatly; WB statistics
shows that the poverty rate has increase to 65.9%.
 This extreme poverty has affected the South Sudan in many ways, one of
the effects of this is the Food insecurity.
 According to Solidarités International, the state of famine was declared at
the end of February 2017; 4.9 million South Sudanese essentially 42% of
the country’s population, is in need of food aid.

3. South Sudan Review

5. Famine in South Sudan
 The problem I would like to solve is the issue of famine in South
Sudan.
 According to an Aljazeera article, the food shortage in South Sudan is
as a result of the civil war which has been going on since 2013.
 According to the UN, while famine is currently limited to two
countries in Unity state, there is a risk that it will spread to an
additional one million South Sudanese currently on brink of
starvation.

7. Effect of Famine
 This is an important issue because it affects the entire population.
 According to Aljazeera, hundreds of people have already died due to this food
insecurity.
 On a governmental level, food insecurity affects the country because it
reduces the capacity of the citizens to contribute to the economy.
 International development agencies depend on ‘equity’ for future financial
contributions. The inability to respond during a food crisis is going to greatly
affect their equity and ultimately ability to raise funds.

8. Effect of Famine on the private sector
 The private sector has an opportunity to capitalize on this food crisis and
create innovative ways to tackle it and increase their relationship with the
international community.
 For example, GAVI was able to utilize public private partnership in
delivering vaccines to children in developing nations.
 Therefore, the private sector in South Sudan can use this as an opportunity
to create innovative ways to solve the food insecurity crisis and tap into
the international market.

9. Obstacles in unlocking Financial opportunity
Challenge 1- Corruption
 There are many problems involved in addressing the food insecurity in
South Sudan, one problem that plagues most African nations is corruption.
 South Sudan has fallen under the ‘oil course’. According to World Bank,
South Sudan is one of the most oil-dependent countries in the world, its oil
accounts for about 60% of the country’s gross domestic product (GDP).
 The oil course breeds corruption. According to transparency international,
South Sudan is an extremely corrupt country.

11. Challenge (2)- Lack of Infrastructural
 Another problem is the infrastructural challenges the country experiences
 According to an article from the African Development Bank titled ‘Major
Challenges Facing the South Sudan Economy’, the civil war has inhibited the
provision of basic infrastructure in South Sudan and undermined their
production capacity.
 South Sudan imports a majority of their goods and export predominately oil( this
too is reducing). This means they have a limited opportunity to grow the local
economy.
 Ultimately the Minimal investment in infrastructure has further compounded the
issue of productivity in the country.

12.  Oil spills onto the ground from an
oil well head strafed by shrapnel
from a bomb dropped by fighter
jets at the El Nar oil field in South
Sudan's Unity State

13. Challenge (3)- Lack of Diversification in
Economy.
 According to an article from the African Development Bank titled ‘Major
Challenges Facing the South Sudan Economy’, The GDP of the country
is dominated by the oil sector, it is estimated to be about 60% of total
GDP.
 According to a WB article titled, ‘Diversification: The Key to Unleashing
Sudan’s Economic Potential?’, the key to unlocking South Sudan's
economic potential is diversification of their economy
 Other sectors such as agriculture, industry and services are a relatively small
part of their overall economic activity.

14. South Sudan Economy
60%
Oil production15% Agriculture
25% Others

15. According to the WB, the role of the PSW is to “ help mobilise private capital and scale up private sector
development in the poorest countries, particularly in fragile situations”
There are two PSW solutions, that have the potential to scale-up private sector
capital in South Sudan;
 Blended finance
 Local Currency Facilities

16. Blending Finance
 Access to finance remains one of the many constraints for the private sector involvement
in development.
 Government and development finance is not enough to tackle the food security issue in
South Sudan; there is a need to crowd-in the private sector. Private sector financing is an
important source to help address the famine issue in South Sudan .
 Scaling-up blended finance will require collaboration between governments, private sector,
and donors.
 The use of the Blended Finance facility is important in South Sudan because it allows the
country raise funds from different avenues to address the issue of food security.
 Blended Finance also helps to reduced risk for the private sector organizations ultimately
encouraging their investment and allowing them become more innovative.

17.  PSW also promotes the use of local currencies through the local Currency
Facility .
 LCF helps manage currency risks making it possible for international agencies
to provide loans to South Sudanese companies in local currency loans.
 The use of local currencies will protect the private organizations from the whims
of international market; making borrowing much easier and dependent on the
local market.
 This will also encourage the involvement of the private sector and help mobilize
private capital for development.
Local Currency Facilities