Debt dynamics and trade capacity: An empirical study of the external debt-to-export ratio as a determinant of economic resilience in Juba

Abstract

This study established the effect of the external debt-to-export ratio on the economic growth of South Sudan for the period 2013–2018. The debt-to-export ratio is a key sustainability indicator that measures a country’s external obligations relative to its capacity to earn foreign exchange through exports. A case study design with mixed methods was adopted, collecting data from 60 respondents through questionnaires and interviews. Descriptive statistics were used for analysis. The findings revealed that 75.4% of respondents agreed that South Sudan’s external debt currently exceeds internationally recognised sustainability thresholds, while 81.6% confirmed that the country faces external payment difficulties. With oil exports accounting for more than 95% of government revenue and approximately 60% of GDP, the sharp decline in oil prices from $110 per barrel in 2014 to approximately $50 by 2017, combined with conflict-related production disruptions, dramatically worsened the debt-to-export ratio. The study found that 71.6% of respondents agreed that foreign exchange reserves are critically low, reflecting the country’s inability to generate sufficient export earnings to service its external obligations. Respondents identified human capital (88.3%), government policies (83.3%), and sustainable fiscal policy (75%) as the most important growth determinants, highlighting the need for export diversification and productive investment. The study concludes that the deterioration in South Sudan’s debt-to-export ratio has undermined investor confidence, constrained access to international financing, and deepened macroeconomic instability. The study recommends export diversification beyond oil, improved fiscal management, and engagement with international creditors for debt relief. Keywords: Debt Sustainability, Trade Capacity, Economic Resilience, Export Volatility, Post-Conflict Macroeconomics, Solvency Ratios.