South Sudan: Government Implements Sweeping Spending Cuts Amid Economic Challenges. Juba, South Sudan — February 4, 2026 The South Sudanese government has unveiled a series of austerity measures, including deep spending cuts and the termination of numerous tax exemptions, as part of an economic reset aimed at addressing soaring inflation and stabilizing the national economy. Minister of Finance and Planning Bak Barnaba Chol announced the reforms during a press conference in Juba, emphasizing a shift from short-term fixes to a more sustainable economic strategy.
According to Chol, the Council of Ministers endorsed the policy following a period of severe fiscal constraints.
The reforms are focused on curbing government spending and expanding non — oil revenues to stabilize the currency and rein in inflation. “Government spending will be restricted to priority areas, including salaries, security operations, peace implementation, and elections,” Chol.
Non — essential payments, contracts, and capital projects have been deferred, and recruitment across government institutions has been temporarily halted, except for critical staffing needs.
The economic reset comes against the backdrop of declining oil revenues, which have been the backbone of South Sudan’s economy. Persistent disruptions along export pipelines running through conflict-affected Sudan have left the country vulnerable to revenue shocks.
As part of the revenue — raising drive, Chol announced the immediate cancellation of all non-statutory tax exemptions, which he said have significantly eroded government income.
The move affects exemptions on fuel imports, food items, construction materials, and luxury vehicles. “All kinds of non-statutory exemptions should be stopped,” Chol.
“Only statutory exemptions — covering embassies, international organizations, and United Nations agencies — will remain in place for now.
” The Ministry of Finance will also review, assess, and renegotiate existing exemptions granted to embassies, international organizations, UN bodies, and related institutions in line with the Status of Forces Agreement (SOFA).
The policy further empowers the Ministry to review and renegotiate key oil — sector arrangements, including Exploration and Production Sharing Agreements (EPSAs) and SOFAs, to strengthen transparency and long-term viability in the petroleum sector.
In addition to oil, Chol said the government will intensify efforts to expand domestic tax collection, introduce a value — added tax (VAT), strengthen customs systems, and support private-sector growth. Priority sectors for economic diversification include agriculture, livestock, fisheries, mining, and export-oriented commodities such as sesame and gum arabic.
The government says the reforms are essential to stabilizing South Sudan’s fragile economy amid ongoing regional instability and domestic fiscal pressures.
Further details are expected as the government implements these economic measures.
