In January 2005 the insurgency in Southern Sudan, the longest-running large-scale rebellion in Africa, ended formally in a power-sharing treaty, the Comprehensive Peace Agreement (CPA). Despite its numerous weaknesses the CPA provided a roadmap for peace between the warring parties and facilitated the secession of Southern Sudan. The CPA implementation period (2005-2011) saw an unprecedented international intervention in Southern Sudan, part of which emphasised on constructing sustainable peace through statebuilding. However, more than seven years down the road, and after the region has converted into the independent state of South Sudan in July 2011, peacebuilding continues to be undermined by contradictions between statebuilding and the local reality. This article posits that the internationally enforced ‘peace through statebuilding’ approach has suffered from a number of limitations reflected in governance and economic development in Southern Sudan. Based on evidence from the period of CPA implementation (2005-2011), it calls for a re-focus of both the external intervention strategy, and the Government of South Sudan’s approach to governance and development, in order to overcome political, economic, and social challenges to state legitimacy and consolidation.