South Sudan depends highly on the export of oil to pay its imports and to finance government expenditure. This dependency needs urgently to be reduced, for several reasons: South Sudan's oil is a finite, a limited resource: The oil production has already reached its peak in 2011 and is declining steadily until it will be negligible in 2035.
Oil incomes are also due to unforeseeable price fluctuations that make a country depending on those vulnerable. Furthermore, oil production does not create sizeable local employment, as it depends mainly on relatively highly skilled labour that is not available locally and is also very capital intensive. Thus, oil production does not directly contribute to poverty reduction through employment creation. More generally, as oil is only pumped out of the soil and directly exported, it has very little linkages to the local economy which would stimulate the overall national economy.
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