(Jan. 14, 2015) – The price of failing to bring about lasting peace in South Sudan could be $158 billion over the next two decades, according to a new study. The conflict, which erupted in December 2013, has already killed tens of thousands and placed nearly a third of the population of the young country at risk of famine.
Released on the eve of two major summits in Ethiopia, the report, called South Sudan: The Cost of War, introduces empirical research that makes a compelling case for immediate action by South Sudan’s neighbors and African states to stop the fighting and avoid massive economic and financial costs.
The report quantifies the additional economic costs that would be incurred by South Sudan should the conflict continue beyond today. It takes into account declines in oil revenue and remittances and increases in military spending. It also looks at costs incurred in other countries in the region and at a global level.
The collaborators on the report, Frontier Economics, the Center for Conflict Resolution (CECORE) and the Centre for Peace and Development Studies (CPDS) at Juba University, have called on the African Union Peace and Security Council to publicly release the findings of the Commission of Inquiry on South Sudan as soon as possible and to use those findings as the basis for imposing targeted individual sanctions such as asset freezes and travel bans.
“The Cost of War report shows there are severe economic costs that have not previously been known that must now be acknowledged. Next week at the AU summit in Addis Ababa, all Heads of African States must realize that South Sudan’s economy and our people simply cannot afford to forgo billions of dollars it will cost to endure five more years of conflict,” warned Dr. Luka Biong Deng of CPDS.
“There can be no price tag on the suffering of South Sudan’s people from displacement, famine and death,” said Dr. Salim Ahmed Salim, former Prime Minister of Tanzania and Secretary-General of the Organization of African Unity, writing in the foreword of the report. “But,” he continued, “it is possible to assess the direct economic costs by estimating the loss of productive assets and capital and the reduction in economic activity, and they are large.”
Key findings include:
“The $3 billion needed for the humanitarian response and peacekeeping in South Sudan in 2014 will pale into significance when compared to the cost if a peaceful solution is not found quickly,” said Amar Breckenridge of Frontier Economics. “The cost of war is too great for this region to bear. Peace is a humanitarian necessity but also an economic one for South Sudan and its neighbors – especially Uganda and Kenya, who quite literally cannot afford to allow this situation to continue.”
The conflict has already had a pronounced negative economic effect on South Sudan. The International Monetary Fund (IMF) suggested that real GDP will have declined by around 15% in 2014 – a dramatic turnaround from the previous year, when it had the fastest growth in real GDP in the world. Because much of South Sudan’s economic activity is informal, the true costs incurred to date are likely to be considerably greater.
“On the eve of the Intergovernmental Authority on Development (IGAD) and African Union (AU) summits in Addis Ababa, we hope Africa’s leaders will finally come together to ensure there is not another year of conflict in South Sudan. In addition to saving lives, they need to save their economies billions of dollars. Otherwise South Sudan risks becoming a failed state or even being the catalyst for a full blown regional conflict,” said Rose Orthieno, Executive Director of CECORE in Uganda.
The key recommendations of South Sudan: the Cost of War include: