Building peace and prosperity in South Sudan: What role for AfDB?

By Amadou Sy 28 May 2015

A girl holds the flag of South Sudan. The country joined the African Development Bank as its latest member. Photo by: Timothy McKulka / USAID

During the African Development Bank’s annual meeting this week, the institution is not only celebrating its 50th anniversary and electing a new president, but also welcoming Africa’s newest country, South Sudan, as its latest member.

South Sudan gained independence from Sudan in 2011, inspiring hope that under an autonomous government the country would be able to realize high levels of inclusive, economic growth (bolstered by revenues from the oil sector), provide basic service delivery and public infrastructure to its citizens, and ultimately reduce the country’s acute poverty rates, which stood at 51 percent in 2009.

Since 2011, however, South Sudan has faced increasingly complex and mutually reinforcing political, economic and humanitarian challenges, including a bloody civil war that broke in December 2013, economic downturn due to the temporary suspension of oil production in 2012 followed by a conflict-fueled fiscal crisis in 2013 and 2014, and extreme, widespread deprivation exacerbated by the war and poor macroeconomic conditions.

Now, on top of the country’s growing poverty, infrastructure and other development gaps, falling oil prices have further undercut flows from the oil sector, which comprise 95 percent of the government’s revenues and 50 percent of the country’s gross domestic product. Moreover, South Sudan’s deteriorating political crisis has made it a liability to the region, complicating its attempts to join the East African Community and benefit from regional integration.

South Sudan’s challenges highlight how the path to peace, prosperity and development is not linear — that effective political and economic institutions take time to build. AfDB, through its work on state fragility, has the capacity to assist fragile states such as South Sudan in strengthening these state institutions. While South Sudan’s admission into AfDB is certainly welcome, it does not necessarily represent a major shift in the trajectory of current donor assistance to the country. However, this new engagement will bring many changes.

Here are several ways in which South Sudan’s AfDB membership has already made and could continue to make a difference in South Sudan, and ways in which the partnership may be limited in the near term.

AfDB’s partnership with South Sudan

AfDB began its work in South Sudan following the signing of the Comprehensive Peace Agreement in 2005, which ended over two decades of civil conflict between the north and the south and designated South Sudan as one of two autonomous regions within the state of Sudan.

In 2008, AfDB implemented its Strategy for Enhanced Engagement in Fragile States, which acknowledged that political instability and conflict provide an enormous risk to economic and human development in African countries. From 2010 to 2011, AfDB provided technical assistance in financial and economic planning to both South Sudan and Sudan throughout the African Union High-Level Implementation Panel on post-secession negotiations.

An independent review of AfDB assistance to fragile states through 2012 revealed some general shortcomings in the bank’s fragility programming — due to the lack of a “fragility lens” or adequate analysis of political dynamics and the driving factors of conflict — although the evaluation did highlight South Sudan as an example of AfDB’s sufficient preparation for successful engagement in a highly politicized environment.

Since South Sudan’s independence, AfDB has revised its Fragile States Strategy and has continued its collaboration with Juba under a cooperation agreement pending the country’s full membership. It has provided $17.8 million in funding (up to 2013), mostly in infrastructure projects and capacity building programming related to public financial management.

AfDB’s contribution to the international support for South Sudan

While valuable, AfDB support has constituted a small fraction of broader, global efforts to provide development assistance in South Sudan, amounting to approximately $4.5 billion in international commitments since 2005. This figure however excludes the $4 billion in contributions by international donors to the U.N. Mission in the Sudan peacekeeping force over the same time period.

The Multidonor Trust Fund for South Sudan, overseen by the World Bank, along with four other large pooled funds accounted for 19 percent of donor commitments to South Sudan through 2013. The United States, as the single-largest donor to South Sudan, has made all of its $1 billion in commitments bilaterally. In May 2013, the MTDF-SS closed, creating a greater shift toward bilateral commitments versus pooled funds.

With such a wide array of multilateral and bilateral donors and difficult in country conditions, including weak governance of foreign aid, many evaluations of South Sudan’s aid architecture have criticized the MTDF-SS and other international funding structures for being “overly complex and inefficient,” working primarily through international nongovernmental organizations rather than building capacity through the government, and neglecting the political context and diverse factors that could lead to conflict.

Since the outbreak of violence in 2013, international support has shifted from development assistance to focus on humanitarian response and peace-building initiatives, funded through bilateral donors or pooled U.N. administered funds, including the Common Humanitarian Fund and Peace-building Fund.

How AfDB should partner with South Sudan

It is important for AfDB to become a successful partner — the partner of choice — for South Sudan, given its localization and regional expertise in Africa. After all, if you take any list of the world’s most fragile countries, such as the Fund for Peace’s Fragile States Index, chances are that African countries are listed at the top of the rankings.

The AfDB should be leading. It should aim to provide greater coordination and leadership over South Sudan’s aid architecture, including any future multilateral trust fund that might be re-established for South Sudan. It should focus on community-driven approaches, and match its programming with the country’s national development priorities.

The international community has quite a bit of experience in coordinating funding from multiple donors to provide assistance in fragile, new and conflicted-affected states, often working with local communities as in Aceh, Afghanistan or East Timor. For AfDB to lead international efforts in African fragile states, it will need to demonstrate that it can work rapidly and efficiently in very difficult situations. AfDB will need to establish a proven track record and that is why engaging South Sudan successfully will be important for its work in other countries in the future.

There is at least one precedent for AfDB taking the lead of an MDTF, when in 2010 the management of a MDTF for Zimbabwe was transferred to the AfDB from the World Bank. The AfDB has a new strategy on fragile countries, which can be tested and improved upon by working on fragile countries with the World Bank and other partners, as in Somalia, where AfDB provides one of four financing windows of the Somalia Development and Reconstruction Facility — alongside the World Bank and U.N. windows.

The notion of fragility is evolving with the emergence of nonstate, cross-border actors, so this is work in progress and the AfDB will need to evolve as well.

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About the author

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Amadou Sy

Amadou Sy is director of the Africa Growth Initiative at the Brookings Institution and a member of the editorial board of the Global Credit Review. He was previously deputy division chief at the International Monetary Fund. He focuses on banking, capital markets, and macroeconomics in Africa and emerging markets.


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