Egypt attempted to colonize the region of southern Sudan by establishing the province of Equatoria in the 1870s. Islamic Mahdist revolutionaries overran the region in 1885, but in 1898 a British force was able to overthrow the Mahdist regime. An Anglo-Egyptian Sudan was established the following year with Equatoria being the southernmost of its eight provinces. The isolated region was largely left to itself over the following decades, but Christian missionaries converted much of the population and facilitated the spread of English. When Sudan gained its independence in 1956, it was with the understanding that the southerners would be able to participate fully in the political system. When the Arab Khartoum government reneged on its promises, a mutiny began that led to two prolonged periods of conflict (1955-1972 and 1983-2005) in which perhaps 2.5 million people died - mostly civilians - due to starvation and drought. Ongoing peace talks finally resulted in a Comprehensive Peace Agreement, signed in January 2005. As part of this agreement, the south was granted a six-year period of autonomy to be followed by a referendum on final status. The result of this referendum, held in January 2011, was a vote of 98% in favor of secession.

Since independence on 9 July 2011, South Sudan has struggled with good governance and nation building and has attempted to control opposition forces operating in its territory. Economic conditions have deteriorated since January 2012 when the government decided to shut down oil production following bilateral disagreements with Sudan. In December 2013, conflict between government and opposition forces killed tens of thousands and led to a dire humanitarian crisis with millions of South Sudanese displaced and food insecure. The warring parties signed a peace agreement in August 2015 that created a transitional government of national unity in April 2016. However, in July 2016, fighting broke out in Juba between the two principal signatories, plunging the country back into conflict.

South Sudan, independent from Sudan since July 2011 after decades of civil war, is one of the world’s poorest countries and ranks among the lowest in many socioeconomic categories. Problems are exacerbated by ongoing tensions with Sudan over oil revenues and land borders, fighting between government forces and rebel groups, and inter-communal violence. Most of the population lives off of farming, while smaller numbers rely on animal husbandry; more than 80% of the populace lives in rural areas. The maternal mortality rate is among the world’s highest for a variety of reasons, including a shortage of health care workers, facilities, and supplies; poor roads and a lack of transport; and cultural beliefs that prevent women from seeking obstetric care. Most women marry and start having children early, giving birth at home with the assistance of traditional birth attendants, who are unable to handle complications.

Educational attainment is extremely poor due to the lack of schools, qualified teachers, and materials. Less than a third of the population is literate (the rate is even lower among women), and half live below the poverty line. Teachers and students are also struggling with the switch from Arabic to English as the language of instruction. Many adults missed out on schooling because of warfare and displacement.

Almost 2 million South Sudanese have sought refuge in neighboring countries since the current conflict began in December 2013. Another 1.96 million South Sudanese are internally displaced as of August 2017. Despite South Sudan’s instability and lack of infrastructure and social services, more than 240,000 people have fled to South Sudan to escape fighting in Sudan.

Industry and infrastructure in landlocked South Sudan are severely underdeveloped and poverty is widespread, following several decades of civil war with Sudan. Continued fighting within the new nation is disrupting what remains of the economy. The vast majority of the population is dependent on subsistence agriculture and humanitarian assistance. Property rights are insecure and price signals are weak, because markets are not well-organized.

South Sudan has little infrastructure – about 10,000 kilometers of roads, but just 2% of them paved. Electricity is produced mostly by costly diesel generators, and indoor plumbing and potable water are scarce, so less than 2% of the population has access to electricity. About 90% of consumed goods, capital, and services are imported from neighboring countries – mainly Uganda, Kenya and Sudan. Chinese investment plays a growing role in the infrastructure and energy sectors.

Nevertheless, South Sudan does have abundant natural resources. South Sudan holds one of the richest agricultural areas in Africa, with fertile soils and abundant water supplies. Currently the region supports 10-20 million head of cattle. At independence in 2011, South Sudan produced nearly three-fourths of former Sudan's total oil output of nearly a half million barrels per day. The Government of South Sudan relies on oil for the vast majority of its budget revenues, although oil production has fallen sharply since independence. South Sudan is one of the most oil-dependent countries in the world, with 98% of the government’s annual operating budget and 80% of its gross domestic product (GDP) derived from oil. Oil is exported through a pipeline that runs to refineries and shipping facilities at Port Sudan on the Red Sea. The economy of South Sudan will remain linked to Sudan for some time, given the existing oil infrastructure. The outbreak of conflict in December 2013, combined with falling crude oil production and prices, meant that GDP fell significantly between 2014 and 2017. Since the second half of 2017 oil production has risen, and is currently about 130,000 barrels per day.

Poverty and food insecurity has risen due to displacement of people caused by the conflict. With famine spreading, 66% of the population in South Sudan is living on less than about $2 a day, up from 50.6% in 2009, according to the World Bank. About 80% of the population lives in rural areas, with agriculture, forestry and fishing providing the livelihood for a majority of the households. Much of rural sector activity is focused on low-input, low-output subsistence agriculture.

South Sudan is burdened by considerable debt because of increased military spending and high levels of government corruption. Economic mismanagement is prevalent. Civil servants, including police and the military, are not paid on time, creating incentives to engage in looting and banditry. South Sudan has received more than $11 billion in foreign aid since 2005, largely from the US, the UK, and the EU. Inflation peaked at over 800% per year in October 2016 but dropped to 118% in 2017. The government has funded its expenditures by borrowing from the central bank and foreign sources, using forward sales of oil as collateral. The central bank’s decision to adopt a managed floating exchange rate regime in December 2015 triggered a 97% depreciation of the currency and spawned a growing black market.

Long-term challenges include rooting out public sector corruption, improving agricultural productivity, alleviating poverty and unemployment, improving fiscal transparency - particularly in regard to oil revenues, taming inflation, improving government revenues, and creating a rules-based business environment.