Trade and investment conditions in South Sudan improved slightly in the past year, but many challenges remain. The Revitalized Transitional Government of National Unity (R-TGoNU) continued to implement the 2018 Revitalized Agreement on the Resolution of the Conflict in the Republic of South Sudan (R-ARCSS), although key provisions on security, governance, and transitional justice remain outstanding. The transitional government continued implementing public financial management (PFM) reforms including stabilizing the South Sudanese Pound (SSP).
In its February 2022 report entitled “ Towards a Jobs Agenda,” the World Bank provided a “cautiously positive” forecast the economy could grow by 3.5 to 5.0 percent in productive sectors including household processing and artisanal production “if the peace process holds.” However, peace agreement implementation is significantly behind schedule. The country remains plagued by large-scale population displacement, widespread food insecurity, restricted humanitarian access, harassment of aid workers and journalists, and catastrophic flooding for the third straight year.
The South Sudan economy is highly dependent on oil-revenue. The transitional government did not institute any new programs in the past year to diversify the country’s economy. South Sudan’s oil sector is fraught with corruption and mismanagement. The country’s oil-producing firms and the Ministry of Petroleum remain on the U.S. Department of Commerce Bureau of Industry and Security (BIS) Entity List . The U.S. government assesses the 15 entities BIS added to the Entity List are contributing to the ongoing crisis in South Sudan “because they are a source of substantial revenue that, through public corruption, is used to fund the purchase of weapons and other material that undermine the peace, security, and stability of South Sudan rather than support the welfare of the South Sudanese people.”
Corruption and malfeasance extend beyond the oil sector. Transparency International ranked South Sudan the world’s most corrupt country in its 2021 rankings . Additionally, a September 2021 UN Human Rights Commission report highlighted the link between South Sudan’s human rights violations and economic crimes.
Humanitarian and development aid is a major source of employment. The difficulties humanitarian service providers face of arbitrary and conflicting regulations, multiple layers of taxation, airport and border obstructions, labor harassment, and looting of warehouses demonstrate what private investors can expect to encounter.
The legal system is underfunded, dysfunctional, and subject to corrupt practices and interference. Government entities do not enforce laws equitably or consistently. Corrupt government officials operate with impunity. The legal framework governing investment and private enterprises remains underdeveloped. Contract dispute litigants are sometimes arrested and imprisoned until they agree to pay a financial settlement even when never charged an offense or brought to court.
Other factors inhibiting investment in South Sudan include a lack of skilled and unskilled labor and limited physical infrastructure riddled with arbitrary checkpoints. The International Peace Information Service (IPIS) published a December 2021 report that found checkpoints make transport in South Sudan among the most expensive in the world.
The U.S. Department of State maintains a Do Not Travel Advisory for South Sudan due to crime, kidnapping, and armed conflict.
|TI Corruption Perceptions Index||2021||180 of 180||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||2021||N/A||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2021||N/A||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2015||1,090||https://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
1. Openness To, and Restrictions Upon, Foreign Investment
The Ministry of Investment continued to refine South Sudan’s investment policies in 2021 and into 2022 to increase opportunities for international investors. The Council of Ministers approved some of those investment policies in September 2021, including re-establishing directorates to manage administration and finance, research and planning, investment promotion, service, and investment coordination at the state level.
The government seeks to unlock South Sudan’s economic potential and boost diversified growth by facilitating investment in economic priority sectors such as agriculture, transport infrastructure, petroleum, mining, and energy. But while the government claims to have such incentives, it is difficult to take advantage of them.
In theory the Ministry of Investment has a One Stop Shop Investment Center. However, both organizations are poorly resourced and neither maintains an active website. The ministries that handle company registration include the Ministry of Trade and Industry, Ministry of Investment, Ministry of Finance, and Ministry of Justice. There is no single window registration process, and an investor must visit all the above-mentioned agencies to complete the registration of a company. It is estimated that the registration process could take several months with companies routinely approached to provide bribes to move the process forward. Because registering a business in South Sudan is a lengthy, laborious process involving multiple national, state, and local entities, the Chamber of Commerce recommends hiring a local lawyer to register a business.
South Sudan is a member of the African Trade and Insurance Agency , which provides export insurance and other assistance to foreign investors and traders. Local lawyers, some of whom are listed in the Legal Assistance section of the U.S. Embassy Juba website, are willing to advise investors and guide them through the registration process, for a fee. South Sudan’s Chamber of Commerce is government-run with a government-employed director and private business chairpersons whose business interests are linked to government contracts. There is no ombudsman.
Despite these resources, foreign investors continue reporting unfair practices including expropriation of assets, unpredictable tax policies, harassment by security services, extortion attempts, and inconsistent results in legal proceedings and labor disputes.
Years of conflict and internal displacement have left a complex land rights picture with many properties occupied by squatters or soldiers. Land-based ventures often encounter pre-existing ownership claims and, therefore, claims on royalties or rents. There is no title insurance and no formal way to determine ownership outside of current possession. Under the 2009 Land Act, non-citizens may lease – not own – land in South Sudan. Under the Tax Exemptions and Concessions schedule of the 2009 Investment Promotion Act, foreign investors may lease agricultural land for 30-60 years with the possibility of renewal while mining leases may not exceed the life of the mine or quarry.
The 2012 South Sudan Companies Act allows non-South Sudanese to invest in medium and large size companies on the condition a South Sudanese has at least a 31 percent share. Government officials will not issue a business license to a foreign investor without such a local shareholder. Foreign companies that want to establish a subsidiary in South Sudan are not subject to local shareholder requirements. Private security companies operating in South Sudan must have a South Sudanese citizen hold a 51 percent share of the company pursuant to the 2013 Private Security Companies Rules and Regulations. Extractives sector companies must have a South Sudanese national as part owner, but the exact percentage of ownership required is unclear.
According to the 2009 Investment Act, foreign investors must apply for an investment certificate from the Ministry of Investment to ensure the project will benefit South Sudan’s society and economy. The government does not make public statements about how it screens applications. Investors must rely on the Act’s language. The Ministry of Investment began issuing a new type of investment certificate in February 2022 citing malpractices and forgeries with older versions.
The Third Schedule of the 2009 Investment Act states South Sudanese will receive preferential treatment if they invest in micro-enterprises, postal services, car hire and taxi operations, public relations, retail, and security services, and the cooperative services.
The last time a third-party conducted an investment policy review was the 2016 East African Community’s assessment. South Sudan is yet to harmonize its internal laws to conform to the East African Community plans for regional integration.
An investor looking to establish a business in South Sudan may spend months interacting with the Ministries of Investment, Justice, Trade and Industry, and Finance and Planning. The 2009 Investment Promotion Act requires the Ministry of Investment to create a “One Stop Shop” investment center, but there is still no active website for this center. The Ministry of Justice established a business registration website ( https://business.eservices.gov.ss/ ) in 2021 offered through the government’s broader eServices.gov.ss platform. There is little information regarding how effective this new registration process is due to the platform’s newness. Investors may still need to hire a local lawyer to register a business.
South Sudan does not have a formal mechanism to promote or incentivize outward investment nor does it restrict domestic investors from investing abroad. However, due to the lack of banking services, it is difficult for investors to move money outside the country.
3. Legal Regime
Opening a business can be especially challenging for foreigners trying to navigate the bureaucratic system without the assistance of a well-connected national.
The private sector is governed by a mix of legacy pre-independence laws from Sudan and post-independence South Sudan laws. South Sudan has no securities exchange or publicly listed companies. Post-independence, the national legislature passed laws to improve the transparency of the regulatory system, including the 2012 Companies Act and the 2012 Banking Act. However, enforcement regulations remain lacking and there is little transparency.
The national legislature historically passed most bills and regulations without public comment or quantitative analysis. It did not adequately disseminate finalized laws publicly. This trend continues with the Transnational Legislative Assembly (TNLA). The TNLA formed several committees in late 2021 and early 2022, a development that may improve capacity and transparency. Most government ministries and agencies do not hold notice and comment periods before finalizing regulations. There is no centralized online platform for publishing regulatory actions similar to the U.S. Federal Register. A notable exception is the Bank of South Sudan , which lists banking regulations on its website.
South Sudan’s 2011 Public Finance and Accountability Act requires budget documents to comply with International Public Sector Accounting Standards; however, published documents often do not comply and therefore are difficult to decipher. There have not been public budget hearings since 2019. The legislature failed to pass a budget for fiscal year 2020/2021, which began in July 2020, and did not table the fiscal year 2021/2022 budget until February 2022, even though the fiscal year began in July 2021.
The oil sector attracts the most FDI, but transparency is absent, despite statutory reporting requirements. The Ministry of Finance and Planning does not share foreign debt data at an institutional level and does not release it to the public.
The government occasionally releases limited debt obligation information about certain infrastructure loans, but to date has not disclosed the amount of oil it has committed to pay for infrastructure projects. This makes it difficult for analysts to determine how much money the government has available to service debt and pay for public services.
The contract process for oil companies that are planning to bid and invest in South Sudan is controlled by the Ministry of Petroleum, but paragraph 11 of the 2012 Petroleum Act says the National Petroleum and Gas Commission is empowered to approve all petroleum agreements on behalf of the government and ensure that they are consistent with the Act. Bidding and tender information is not publicly available.
There are no known informal regulatory processes managed by NGOs or private sector associations that would affect U.S. investors. National and state bodies are the main source of regulation, but county and sub-county level officials also impose regulations. NGOs regularly report discrepancies between tax, labor, and import rules issued by the national government and those enforced by local authorities. Humanitarian service providers moving goods earmarked for humanitarian relief claim state officials have, at times, barred them entry at state borders. Tax collection and enforcement at the state level is limited, uneven, and unpredictable. The Ministry of Labor has not conducted labor inspections since March 2020 due to the COVID-19 pandemic, but when it did NGOs and foreign investors reported employees colluded with labor inspectors to extort fines from business managers.
Nationally non-oil tax revenue increased dramatically in 2021 as South Sudan improved its collection methods for personal income tax and customs revenue. Some months saw a 100 percent year-over-year increase suggesting prior revenue collection efforts were corrupt, inept, or both. Much of this improvement is due to public financial management (PFM) reforms aimed at strengthening the National Revenue Authority.
Despite significant PFM reforms, the government did not announce or implement new enforcement reforms in 2021. The legislative body does not provide effective administrative compliance oversight of government ministers nor do ministries or agencies adequately regulate one another. There were no significant corruption prosecutions in 2021. Media reported in February 2022 that President, Salva Kiir Mayardit, blocked the investigation of former Minister of Petroleum Ezekiel Lol Gatkuoth for allegedly stealing millions of dollars in oil revenues between 2016 and 2017.
South Sudan is not a WTO member but joined the African Union in 2012 and the East African Community (EAC) in April 2016. It is currently behind in membership payments to both and has its voting rights suspended. The Ministry of East African Community Affairs is responsible for integration into the EAC. South Sudan is adapting its national regulatory system to regional standards. It joined the customs union of the EAC but is behind in implementing regulations, prompting the EAC in February 2022 to urge the government to fully implement the EAC’s Single Customs Territory to boost intra-regional trade. The National Revenue Authority assists in implementing EAC customs regulations and procedures.
South Sudan currently has nine members in the EAC parliament.
U.S. companies seeking to invest in South Sudan face a complex commercial environment with weak legal enforcement mechanisms. Large U.S. and multinational companies may have enough leverage to extricate themselves from business disputes, but medium-sized enterprises (the more natural counterparts to South Sudan’s fledgling business community) do not.
South’s Sudan’s legal system is a combination of statutory and customary laws. There are no dedicated commercial courts and no effective arbitration bodies to handle business disputes. The only official means of settling disputes between private parties is civil court. Enforcement of judgements and awards is weak or nonexistent, leading businesses to seek informal mediation, including through private lawyers, tribal elders, law enforcement officials, and business organizations. Corrupt practices are widespread and undermine pending cases. The lack of a unified, formal judicial system encourages “forum shopping” by businesses motivated to find the venue in which they can achieve the most favorable outcome.
As an East African Community (EAC) member, South Sudan is subject to the jurisdiction of the East African Court of Justice (EACJ). The EAC treaty gives the EACJ broad jurisdiction including trade disputes and human rights violations. However, the court only reviews 40 cases annually and results for the South Sudanese legal community have been inconclusive. Hope for Humanity Africa, an advocacy group, sued the government in the EACJ in June 2021 over oil waste mismanagement that allegedly caused health and environmental damage. The EACJ allowed the government to resolve the case through mediation, although there have not been any published results of the mediation.
The executive branch regularly interferes with the work of the judicial branch. State security forces arrest and detain parties to business disputes without charging them with a crime. Security forces continue detaining the person until they agree to make a payment as directed to “resolve” the case. High-level government and military officials are immune from prosecution in practice and frequently interfere with court decisions.
Foreign investors face a lack of transparency and capacity in South Sudan’s legal system as well as inconsistent laws and regulations. Most foreign direct investment rules can be found in the 2009 Land Act, the 2009 Investment Promotion Act, and the 2012 Companies Act. The relevant ministries do not have implementing regulations or they do not publish them for public review. The Ministry of Justice has a business registration website, but a foreign investor may still need local counsel to register the business and obtain an investment certificate.
South Sudan does not review transactions for competition-related concerns. There were no significant developments in 2021.
Investors should be prepared to face a complex commercial environment with a weak civil justice system in which contract disputes are common and often resolved without due process.
The 2009 Investment Promotion Act prohibits nationalization of private enterprises unless the expropriation is in the national interest for a public purpose. The Act does not define the terms “national interest” or “public purpose.” According to the Act, expropriation must be in accordance with due process and provide fair and adequate compensation, which is ultimately determined by local domestic courts.
While some donor agreements call for the government to receive goods at the conclusion of a project, local government officials have seized assets even without a formal agreement and did not offer compensation for the expropriated property.
Although officially denied, credible reports from humanitarian aid agencies indicate both government and opposition forces routinely extort money at checkpoints throughout the country before allowing the delivery of humanitarian aid, amongst several other bureaucratic access impediments.
The 2011 Insolvency Act provides for both personal and corporate bankruptcies. Given the lack of commercial courts, there is little information available about the rights of creditors in practice.
4. Industrial Policies
The 2009 Investment Promotion Act provides tax exemptions ranging from 20 to 100 percent of the cost of eligible research and capital expenditures, deductible annual allowances ranging from 20 to 40 percent of the cost of certain equipment, and depreciation allowances on certain assets ranging from 8 to 10 percent. A foreign tax credit is available to any resident company paying foreign taxes on income from business activities outside South Sudan. In practice, the exact incentive structure is unclear due to irregular enforcement.
The Ministry of Finance and Planning has the legal authority to approve tax exemptions.
The government previously used future oil deliveries to attract finance and contract foreign direct investment projects, but in 2021 the Council of Ministers agreed to cease this practice as part of reforms it agreed to with the International Monetary Fund (IMF) and World Bank. However, due to a lack of transparency in government procurement and finance, it is unclear to what extent the country’s oil production has already been leveraged through past decisions collateralized against future oil production.
There are currently no special incentives for businesses owned by underrepresented investors such as women.
The government does not offer incentives for clean energy investment and in early 2022 had a land dispute with a solar company looking to invest in South Sudan causing delays and possible future cancelation of the project.
South Sudan has not established any free trade zones.
The 2017 Labor Act requires 80 percent of staff at different levels of management to be South Sudanese nationals. Additionally, authorities in some localities attempt to force NGOs to hire employees from the specific area or from a specific ethnic group even though the law does not require this. The Labor Act does not specifically discuss senior management and boards of directors. The government requires work permit fees for foreign nationals. These are typically several thousand dollars per employee, but the exact amounts change regularly. Foreigners are also subject to a variety of registration requirements, which also change frequently and unpredictably. In February 2022, the Ministry of Petroleum approved a Unified Human Resources Policy Manual which will standardize salary structures for personnel working in the oil sector.
The 2009 Investment Promotion Act states that when the Ministry of Investment evaluates an application for an investment certificate, the Ministry must consider whether the investment will generate tax revenues, create jobs, and provide new skills for the people of South Sudan. The Investment Act applies these requirements equally to domestic and foreign investors. The Ministry may also consider whether the investment will provide South Sudan with new technology through transfers, use local raw materials and supplies, and contribute to the local community. The Ministry of Investment may revoke an investment certificate due to breach of performance requirements with 30 days’ notice. There are no provisions regarding adjustments to performance requirements.
There are no known requirements for foreign IT providers to turn over source code or provide access to encryption. There are no known prohibitions on transferring customer or other business data outside the country. There are no known rules requiring data storage within the country.
5. Protection of Property Rights
There was no progress in 2021 towards comprehensive land reform. There are no laws on mortgages, valuation, or the registration of titles. The 2009 Land Act and the 2009 Investment Promotion Act both state that non-citizens can lease land for investment purposes. However, foreign ownership of land is prohibited and there are no clear regulations governing how a business can access land for investment use.
Years of war and recurring natural disasters created increased uncertainty regarding land tenure. According to USAID’s January 2022 South Sudan Complex Emergency Fact Sheet , 4.3 million South Sudanese are internally or internationally displaced from their homes. During the five-year civil war, people illegally occupied land and most remain there. While the rightful owners may hold clear land titles, the legal system is not equipped to handle their claims.
Ownership of land is generally unclear, with communities and government often claiming the same property. Land grabbing accusations are common. Property owners or public authorities may try to evict unauthorized occupants under the Land Act, but doing so frequently leads to violent clashes. For example, in December 2021 in Juba law enforcement fired on residents who resisted demolition of their homes resulting in three people killed. The government claimed the evicted residents had built their homes on illegally acquired land. President Kiir formed a committee in 2021 to review land grabbing in Juba, but the committee has not released their findings.
The 2014 World Bank-funded South Sudan Country Report Findings of the Land Governance Assessment Framework concluded South Sudan’s underdeveloped legal and institutional framework reflects the difficulties the country faces in establishing effective governance and rule of law institutions after decades of conflict. The report’s conclusions remain accurate and, given the fighting since, perhaps understated the complexity of problem. Most land governance institutions operate according to procedures developed in the colonial era, and there is a wide divergence between law and practice. Bridging this gap has been one of the most difficult challenges of the post-independence period. Poor coordination between different levels of government undermines property rights enforcement.
Some businesses lease land from the government, while others lease directly from local communities and/or individuals. Under the Land Act, investment in land acquired from local communities must contribute economically and socially to the development of the local community. Businesses will often sign a memorandum of understanding with the local communities in which they agree to employ locals or invest in social services in exchange for use of the land. Land negotiations can take months or years to complete.
The legal structure for intellectual property rights (IPR) is weak and enforcement is lax. Recorded instances of intellectual property theft are rare due to lack of capacity. While the 2009 Investment Promotion Act includes an article on the protection of IPR, neither the legislature nor any government ministry implemented laws or regulations governing trademarks, copyrights, or patents. The government did not enact any new IP-related laws or regulations in 2021. To date, the only intellectual property law South Sudan has is the 2013 Trade Marks Bill (sic).
South Sudan does not track or seize counterfeit goods. There has been no known prosecution of IPR violations and there are no estimates available for traffic of counterfeit goods.
South Sudan is not included in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.
For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .
6. Financial Sector
South Sudan does not have a functioning stock market or any other system of exchange for financial assets.
It is difficult for foreign investors to obtain credit on the local market due to the shortage of hard currency, the inability to obtain reliable figures or audited accounts, the absence of a credit reference bureau, and South Sudan’s failure to document land ownership properly. Banks are often unwilling to lend because they claim lenders receive inadequate legal protection and because South Sudan lacks verifiable state or national personal identification methods, making most borrowers high risk.
Depositors are still reluctant to deposit money in banks after the Bank of South Sudan in 2015 confiscated commercial banks’ deposits at the central bank and diverted then to the government, making it difficult or impossible for companies and individuals to access their funds.
The Bank of South Sudan issued treasury bills briefly between 2016 and 2017 and said it would issue them again in 2020, but still has not.
The Bank of South Sudan, the central bank, has limited assets and functions more as a commercial bank servicing the federal governments’ transactions; however, in 2021 ongoing public financial management reforms implemented by the Bank of South Sudan led to a change in monetary policy. The central bank helped stabilize the South Sudanese Pound through currency auctions.
The banking sector faces significant challenges because of U.S. and United Nations sanctions against certain South Sudanese entities and individuals. South Sudan is on the Financial Action Task Force’s (FATF) “grey list,” meaning FATF increased its monitoring due to South Sudan’s deficiencies in countering money laundering and terrorist financing.
South Sudan’s banking sector is small and underdeveloped with limited use of demand deposits and few foreign banks. Analysts believe many domestic banks are undercapitalized.
South Sudan is one of the most underbanked countries. Most people hold their savings in cash. Banks usually only lend to businesses with well-documented contracts with international organizations.
There are two main mobile payment providers: mGurush and Nilepay. However, users of these platforms must have a bank account, which over 90 percent of South Sudanese do not have.
There are no known restrictions on a foreigner’s ability to establish a bank account.
The 2013 Petroleum Revenue Management Act created a Petroleum Revenue Savings Fund consisting of two accounts into which the government was to deposit oil revenues. One was the Oil Revenue Stabilization Account, which was to receive 10 percent of oil revenues and serve as a buffer against volatility in oil prices in South Sudan’s budgeting process. The other was the Future Generation Fund, which was to receive 15 percent of oil proceeds and serve as a repository for funds meant to help future generations transition to a post-oil economy. To date, however, neither has received any financing despite the government sometimes including allocations to these accounts in the budget process.
The revenue sharing provisions in the 2013 Petroleum Revenue Management Act require the national government to distribute two percent of oil revenue to oil-producing states and three percent to local oil-producing communities. There are no publicly available documents that explain how the states and localities use those funds or whether the funds are actually provided.
None of these wealth funds follow the voluntary code of good practices for transparency and accountability known as the Santiago Principles. South Sudan does not participate in the International Forum of Sovereign Wealth Funds.
7. State-Owned Enterprises
The Nile Petroleum Corporation (Nilepet) is the primary SOE in South Sudan. The government, through Nilepet, holds minority stakes in other oil producing joint ventures operating in South Sudan. The 2013 Petroleum Revenue Management Act governs how Nilepet’s profits are invested, but Nilepet does not release information on its activities, even though Chapter IX of the 2013 Petroleum Revenue Management Act states comprehensive, audited reports on the company’s finances must be made publicly available. Nilepet’s revenues and expenditures are not disclosed in the central government budget.
Nilepet’s director does not report to the Minister of Petroleum and the government is not transparent about how it exercises ownership or control of Nilepet.
Nilepet is on the U.S. Department of Commerce Bureau of Industry and Security (BIS) Entity List. See 83 FR 12475 .
The government also owns stakes in construction and trade companies and several banks. It is difficult to obtain information on the number, total income, and employment figures of SOEs in South Sudan. There is no published list of SOEs.
The country does not adhere to the OECD Guidelines on Corporate Governance for SOEs.
South Sudan does not have a privatization program.
8. Responsible Business Conduct
The idea of responsible business conduct is nascent in South Sudan, and there is little awareness of standards in this area. The few large international firms operating in South Sudan sometimes offer basic benefits to local communities but on an irregular basis. The 2009 Land Act requires investment activities carried out on land acquired from local communities to “reflect an important interest for the community or people living in the locality,” and to contribute economically and socially. Many South Sudanese complain about foreign-owned companies not hiring South Sudanese employees.
The 2009 Investment Promotion Act says investors must pay a fine and clean up waste if they do not implement environmentally friendly rules, but the Act does not require environmental, social, and governance (ESG) disclosures to facilitate transparency for investors and consumers.
International observers claim many oil producing companies in South Sudan do not practice responsible behavior regarding environmental damage in the oil fields. The 2012 Petroleum Act requires the Ministry of Petroleum to subject projects to environmental and social impact assessments, but it is unclear whether or how the Ministry enforces this requirement. The Ministries of Petroleum and of Environment and Forestry are coordinating to conduct an oil sector environmental audit. The government is expected to announce in 2022 who will conduct the audit and the audit’s timeline. Additionally, the government and Hope for Humanity Africa are currently in mediation to address some of the environmental damage and health impacts of oil waste.
The 2018 peace agreement and some national laws (such as the Petroleum Act) contain responsible business conduct provisions, but the government does not enforce them. The government has not instituted corporate governance, accounting, or executive compensation standards to protect shareholders. NGOs promote responsible business conduct, particularly in the environmental domain, but activists and reporters allege government harassment.
The government has demonstrated little capacity or will to enforce laws protecting human and labor rights, consumer protection, environmental protections, and other laws/regulations intended to protect individuals from adverse business impact. There are reports of child labor in supply chains, especially for gold mining.
The government does not encourage adherence to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas, and there are no functioning domestic measures related to such due diligence.
South Sudan does not participate in the Extractive Industries Transparency Initiative (EITI) although the 2018 peace agreement requires South Sudan to join. The United Nations Development Program’s Governance and Economic Support project (GEMS) and the Kingdom of Norway helped coordinate a conference in Juba in April 2021 with other stakeholders to discuss South Sudan joining the EITI, but the government has not taken any action since then.
Several private security companies operate in South Sudan providing protection to various embassies and NGOs. South Sudan is not a signatory to the Montreux Document on Private Military and Security Companies or a supporter of the International Code of Conduct or Private Security Service Providers. South Sudan does not participate in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).
South Sudan has laws, regulations, and penalties to combat corruption, but there is a near total lack of enforcement, and considerable gaps exist in legislation. Transparency International ranked South Sudan the world’s most corrupt country in 2021.
Politically connected people are immune from prosecution. There are no laws that prevent conflict of interest in government procurement. Government officials regularly ask companies to pay extralegal taxes and fees.
The government does not encourage or require private companies to establish internal codes of conduct prohibiting bribery of public officials. There are no indications private companies use internal controls, ethics, and compliance programs to detect and prevent government bribery.
There were no significant anti-corruption cases investigated or prosecuted in 2021.
The 2009 Southern Sudan Anti-Corruption Commission (SSAC) Act established a commission with five members and the chairperson appointed by the President with approval from a simple majority in parliament. The commission is tasked with protecting public property, investigating corruption, and submitting evidence to the Ministry of Justice for necessary action. The SSACC lacks the resources or political support to investigate corruption. It has no independent arrest or prosecution authority or capacity to address state corruption. It can only relay its findings to the Ministry of Justice for prosecution.
South Sudan acceded to the United Nations Convention against Corruption in 2015. The country is not a party to the OECD Anti-Bribery Convention and is not reported to be a participant in regional anti-corruption initiatives.
The country provides no protection to NGOs or journalists who investigate corruption. NGOs and journalists of all types are routinely subject to government harassment, intimidation.
Government security services interfere with and demand payments from all major industries including the extractives sector, hotels, airlines, and banking.
10. Political and Security Environment
There is a long history of politically motivated violence in South Sudan. Warring parties concluded a peace agreement in September 2018 to stop the civil war that broke out in 2013. The conflict severely disrupted trade, markets, and agricultural activities, while claiming hundreds of thousands of lives and spurring a severe humanitarian crisis the country still grapples with. The conflict was marked by grave human rights abuses, including conflict-related sexual violence. South Sudan is slowly implementing the 2018 revitalized peace agreement and routinely misses critical deadlines associated with implementing the peace agreement. Political and sub-state violence is frequent throughout the country.
The country is plagued by large-scale displacement of people (internally and as refugees), widespread food insecurity, severe human-rights abuses, restricted humanitarian assistance access, and harassment of aid workers and journalists. In its January 2022 South Sudan Humanitarian Snapshot , the UN Office for Coordination of Humanitarian Affairs estimated that out of a population 12.1 million, South Sudan has two million Internally Displaced Persons (IDPs) and 2.3 million South Sudanese refugees in neighboring countries. The government stabilized conditions in the country to allow IDPs and refugees to safely return to their homes. The country has 8.3 million people who need humanitarian assistance to survive. Humanitarian partners and international donors are reviewing South Sudan’s Integrated Food Security Phase Classification (IPC) IPC ratings and expected to provide revised ratings in spring 2022.
Previous violence during conflict with Sudan resulted in damage to installations in one of the major oil producing areas in the country, shutting down production in that region. Repairs to these facilities began in 2018, allowing oil production to increase, although production declined again in 2021 due mostly to the third year of sustained flooding South Sudan is experiencing.
Fighting continues in some parts of the country between the government and non-signatories to the 2018 peace deal. Generally, the ceasefire is holding between the government and main opposition groups, but under increasing stress. Persistent sub-national violence stemming from complex socioeconomic, ethnic, and political causes is present throughout South Sudan and has increased since 2019.
The government continued to detain political opposition leaders in 2021. The government periodically detained journalists and temporarily shut down media outlets (print and radio) it accused of publishing articles or broadcasting radio programs that allegedly threatened the government, challenged its competence, or reported instances of corruption.
NGOs complained of harassment, and armed groups continued to attack aid convoys and depots in 2021 and early 2022. NGOs periodically report ambushes along major supply routes in South Sudan. Such attacks resulted in death and injury to, and even killing of, NGO personnel, vehicles destroyed, and supplies looted or destroyed. Such attacks hinder the delivery of aid to countless South Sudanese throughout the country who area dependent on such assistance to survive.
Five aid workers were killed in 2021, and at least three have been killed since January 2022. Since the civil war started in 2013, at least 130 aid workers have been killed, most between 2013 and 2015 when violence peaked.
11. Labor Policies and Practices
South Sudan has a shortage of skilled and unskilled workers across most areas in the formal sector. Construction and service sector employers often hire workers from neighboring countries because of the lack of basic skills training among South Sudanese workers. UNESCO Institute of Statistics estimates the adult literacy rate in South Sudan is only 34.5 percent.
The most recent changes to South Sudan’s labor laws came from the 2017 Labor Act, but the government generally does not enforce labor laws. The Ministry of Labor has not conducted labor inspections since March 2020 due to the COVID-19 pandemic. When it did, NGOs and foreign investors reported employees colluded with labor inspectors to extort fines from business managers. Most small South Sudanese businesses operate in the informal economy, where labor laws and regulations are widely ignored.
The Ministry of Labor reviews work permit applications to determine whether a position could be filled by a South Sudanese national. Some foreign-owned companies report long delays in receiving work permits for expatriate staff, and many expatriates are only able to obtain work permits for one to three months. State and local authorities reportedly charge additional fees and attempt to restrict employment to people from a certain place or of a certain ethnic group. Government security offices reportedly interfere with hiring in some cases.
The 2017 Labor Act allows for Termination for Redundancy “due to changes in the operational requirements of the employer” and requires severance pay in some cases. The law differentiates between this and other forms of termination.
South Sudan has limited social safety net programs for workers laid off for economic reasons. The Labor Act establishes an “employment exchange” scheme for unemployed people that reserves vending, driving, office support staffing, and other manual labor for South Sudan nationals only. In April 2020, the World Bank approved a USD 40 million grant to create the South Sudan Safety Net Project (SSSNP) but has not yet released program results information.
There are no special labor provisions to attract or retain investment. No formal functioning collective bargaining systems exist. Those seeking resolution of labor disputes must work with the Ministry of Labor, courts, informal mediation, or a combination thereof. Foreign employers report being at a significant disadvantage in such disputes.
In 2021, South Sudanese – usually unemployed youths – continued to protest to express displeasure, resorted to violent activities, and threatened and targeted NGOs due to the lack of economic opportunities. Occasionally employees from specific ethnic groups protest or strike if they believe employees from different ethnic groups receive favored treatment.
Child labor is rampant. The Ministry of Labor does not enforce child labor laws. Child labor mostly occurs in the informal economy, which the government generally does not monitor.
14. Contact for More Information
U.S. Embassy, Kololo Road, Juba, South Sudan
(U.S.) +1 (202) 216-6279, ext 355