One of the major natural resources, Teak, is cultivated and harvested in South Sudan, mostly illegally | Credit | File photo

South Sudan should now work on diversifying its natural resources for economic stability, an economist says.

The young nation is one of the most oil-dependent countries in the world, with oil accounting for almost the total exports and more than 40% of its gross domestic product.

Oil prices have reportedly dropped to the lowest since 1991 when the US launched invasion on Iraq after it invaded Kuwait.

Media reports showed that Brent crude futures, the global oil benchmark, were down 22% – trading at $35.45 per barrel on Monday. It had been selling at $70 per barrel.

South Sudan is the third-largest oil-producing country in Africa — but experts believe that 70 per cent of the country remains unexplored, and this requires strong laws and regulatory systems.

The country’s gross domestic product per capita in 2014 was at $1,111 dropping to less than $200 in 2017.

Outside the oil sector, livelihoods are concentrated in low productive, unpaid agriculture and pastoralist work.

In addition to petroleum, South Sudan is believed to have significant mineral resources such as gold, copper, diamond, limestone, Nile River, forests, and wildlife.

“You have to look at other resources, we can generate more revenues through agriculture, forestry and then we can also look in the mining sector,” says Prof. Abraham Matoc Dhal, economist and a vice chancellor of the Dr. John Garang Memorial University of Science and Technology.

He says South Sudan leaders should use the oil revenue to generate other incomes through its rich natural resources.

“If you diversify them, it is easy to at least close up the gap of any shock that may come in as a result of fall of oil prices, and you have to have oil stabilization accounts,” Prof. Matoc added.

Last year, the International Monetary Fund or IMF advised the government of South Sudan against selling crude oil in advance, saying it is expensive and non-transparent.