This study examined the effect of external debt service on South Sudan’s economic growth for the period 2013–2018. External debt service refers to the periodic payments of principal and interest that a debtor country makes to its external creditors, representing a direct drain on fiscal resources and foreign exchange reserves. The study employed a case study research design with a mixed-methods approach. Data were collected from 60 respondents across government departments, financial institutions, academia, and opinion leaders, using structured questionnaires and interview guides, and analyzed using descriptive statistics in SPSS. The findings revealed that 81.6% of respondents confirmed that South Sudan faces severe external payment difficulties, while 71.6% agreed that the country maintains critically low foreign exchange reserves. The study established that debt service obligations have significantly constrained fiscal resources, with over 70% of government expenditure allocated to defense and security, leaving approximately 6% for health and education combined. The study further found that the depreciation of the South Sudan Pound from SSP 2.95 to over SSP 170 per US dollar between 2014 and 2017 dramatically increased the local currency cost of debt service, compounding the fiscal burden. Regarding growth determinants, respondents identified human capital (88.3%), government policies (83.3%), and sustainable fiscal policy (75%) as critical, yet these areas receive minimal debt-financed investment. The study concludes that external debt service has crowded out productive public investment, depleted foreign reserves, and undermined macroeconomic stability, thereby retarding economic growth. The study recommends exchange rate stabilization, renegotiation of debt service schedules, reallocation of fiscal resources toward growth-enhancing sectors, and development of a comprehensive medium-term debt management strategy.
Keywords: External Debt, Economic Growth, South Sudan, Fiscal Policy, Debt Sustainability, Post-Conflict Development
Citation: Ayuel Bill, D. B. (2026). The Burden of Sovereignty: A Critical Analysis of External Debt Servicing and Its Impact on South Sudan’s Economic Trajectory. J Business & Eco Insights.,2(3):1-10. DOI : https://doi.org/10.47485/3143-5807.1029