South Sudan’s lost decade calls for impact investments
South Sudan gained independence ten years ago on July 9, 2011. It is the youngest nation in the world. Unfortunately, the vitality and promise of youth seems to be absent.
Today, there is not much to celebrate on this tenth anniversary to a point that President Salva Kiir himself has just called the last ten years a “lost decade”. Almost half a million lives have been lost in an endless civil war. Partly because of this state of affairs, a fifth of South Sudan’s 11 million people are refugees in other countries, including Kenya. This is equivalent to having ten million Kenyans living outside the country as refugees. It would definitely cramp the nation.
Of those who have decided to face it in their own country, 8.3 million people depend on humanitarian aid. Among them, 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 out of school.
Therefore, Sudan has the unfortunate distinction of having the highest proportion of out-of-school children in the world. This paints a grim picture of the country’s future. In light of all these challenges, it is no surprise that South Sudan is the second poorest country in the world, behind Burundi.
Against this bleak backdrop, it’s no wonder South Sudan ranks 186th in the World Bank’s Ease of Doing Business rankings. This places it firmly in the unenviable position of being one of the fifth worst countries in the world for doing business.
Even oil, which is South Sudan’s strong suit, is collapsing. Oil currently accounts for 70 percent of South Sudan’s GDP and over 90 percent of government revenue. Such dependence on oil has had dire consequences in the past.
In 2012, Sudan closed South Sudan’s oil export pipelines. This was caused by a dispute between them. Following the closure of the pipelines, South Sudan’s GDP fell by 50% in the year the pipelines were not in operation. Since then, the instability of world oil prices has cut 40% of income.
Despite its ICU-like condition, South Sudan is full of immense potential that can be harnessed by unleashing two words: impact investing. Unlike normal investing, impact investing seeks to generate social and environmental impact in addition to financial returns.
Through impact investments, South Sudan can boost its service sector, which currently accounts for 6.1% of its GDP. Other contributors to the economy, such as agriculture, can benefit from impact investing.
However, investing hates conflict. The Council on Foreign Relations think tank estimates that the death toll from ethnic clashes could reach 383,000. Even if that number were lower, South Sudan would still be seen as a hotspot of conflict.
As long as deadly ethnic clashes become part of South Sudanese society, it will be difficult to attract or create meaningful investments that can go a long way in raising incomes while tackling pressing societal and environmental issues. One of these issues is health.
In South Sudan, there is only one doctor for every 65,574 citizens. This means that there is a need to invest in health care that will drastically reduce this dismal doctor-to-patient ratio. A substantial increase in the number of doctors will generate more jobs in the healthcare value chain, which will mainly benefit the people of South Sudan.
Of course, one can legitimately wonder if there are qualified South Sudanese personnel. As a lecturer at the Kenya Foreign Service Institute, I have trained various South Sudanese diplomats on green investment issues. I know that my students are green ambassadors wherever they are and that such educational investment opportunities still exist. This is where the power of impact investing lies – it treats every societal and environmental problem as an investment opportunity that will be a solution. Therefore, we must think and act green!