The inflation in South Sudan has tested the leadership of President Salva Kiir and his five vice presidents, Dr Riek Machar, Gen Taban Deng, Dr James Wani Igga, Hussein Abdelbagi Akol, and Rebeca Nyadeng.
As the top policymakers, do they really have the jaws to rescue the country from the economic collapse?
Since the war broke out in December 2013 between the government and opposition parties, South Sudan has suffered from an outrageous economic downturn. The majority of its citizens, who have no financial capacity, often struggle to put food on the table.
Nonetheless, 13 years down the line, the South Sudan economic crisis has exacerbated despite the implementation of the Revitalized Peace Agreement. The economy continues to deteriorate. The depreciation of the South Sudanese pound against the US dollar, pressed by high production costs, shortage of goods and services, a lack of local production, high transportation costs, inflation rates, a decline in oil production, food prices, and political instability, have become a real nuisance to the people.
An upshot of the unprecedented economic crunch forced the South Sudanese leaders to plan the governor’s summit. On September 4–8, 2023, the government convened its first national economic conference in Juba under the theme; “Towards diversified, inclusive, and sustainable economic growth.” The conference, which brought together high-level government officials, economists, business leaders, and other stakeholders, made several recommendations to address the economic reforms and enhance the financial situation.
That conference was convened while Dr Bak Barnaba Chol was the Finance Minister. Dr Chol was appointed to energize the economic transformation as a young economist. Unfortunately, no transformation transpired until he was out of the office. The people were yet to see any accomplishment from the resolutions during the conference. Chol faced serious opposition to his reform agenda due to a failure to pay the civil servants for several months.
The citizens’ optimism and the stakeholders’ energy injected in that seminar rotted in the dustbin. Now, economic desperation has come to everyone’s doorsteps. The rich and poor are all nursing themselves in the same room because of the high cost of living.
Citizens’ expectations
What does it mean to say the economic woes have tested our leaders’ abilities? Leaders seek opportunities to exploit to address the catastrophes, political instability, developmental programs, poor land management practices, lack of financial resources, and economic crisis.
If such pressing issues are not addressed, the government can face dissent or resistance from its populace. In 2022-2023, the South Sudan fiscal deficit was reported to have improved to 4% of the GDP, responding to fiscal consolidation. However, some reports say South Sudan was at a high risk of debt distress, with the debt-to-GDP ratio estimated at 34.5% in 2023. The Africa Development Bank Group claimed the GDP was expected to recover 1% in 2024–2025.
Where are we headed with the doodling economy? When the dollar exchange rate was varying between 100,000 and 200,000 within the last two years, the situation was a bit fair. The citizens were able to cater for their family expenses. However, this year, when the exchange reached 400,000 plus South Sudan pounds, the rate turned out to be so rigid.
The level of vulnerability among South Sudanese has increased since the suspension of the civil servants’ salaries for several for months. Could our leaders stay snoring in their comfort zone? I don’t think so. The world is watching us. It is time to wake up, throw away pillows, and give public issues hook eyes. The regional and the international partners want to see us exploit our wisdom as a sovereign nation, to manage our national affairs competitively. It was time for the top leadership to make an informed decision to save the South Sudanese from hustling and the looming hunger.
The Presidency should strategically act now and address an economic ache. I was expecting a summit to happen three months ago to revisit the 2023 governors’ conference resolutions so that the Unity government can execute tough economic feasibility to save the country.
However, the Presidency has been silent. That notion signifies the nonexistence of a public economic policy framework to alleviate the suffering of the South Sudanese. Decision-makers have a constitutional mandate to formulate public policies. The President has fired a good number of Finance ministers and some officials in the Central Bank of South Sudan over economic failure.
The two (the Ministry of Finance and the Central Bank of South Sudan) have been injecting millions of dollars every week into the market for four years with the objective of countering higher inflation. However, that strategy has never had an advantage because whenever money was injected into the market, the volatile currency exchange rate reduced for a short time and then increased.
Why was injecting money into the market not been the best approach? It wasn’t because it was a temporary solution to reduce fermentation rate tie-ups through narrow market regulation. The business people have enjoyed maximum freedom; they sell commodities according to their own interests, which has imposed an economic burden on the citizens. When the exchange rate is reduced, the prices of food commodities do not immediately reduce; they remain up until the exchange rate shoots up again, which gives business people the upper hand to exploit people.
Desperation
Hunger is a global threat, which may have been a source of the vulnerability, criminality, and the lessening national GDP. In the worst-case scenario, it exaggerated animosities between the rich and the poor, including the unemployed youth who survived on the streets. This is not a new situation in South Sudan. Many people lost their lives because of unknown gunmen, so from 2013 to 2016, during political unrest. Many criminals like capitalizing on robberies for their survival. Since last week, evidence has also emerged that there have been some security threats in Juba.
The citizens were informed to be mindful of their personal safety because unknown gunmen or torotos, who often snatched people’s belongings, were re-emerging in different locations. The youth who have nothing will prefer to benefit from those who have small things to eat. The desperation foisted on us by hunger will jeopardize peace and trigger national threats from criminals who want to take the law into their own hands. If the government does not pay more attention to this situation, criminalities will exacerbate in the months to come. Even the General Election that we are talking about will face impediments.
Economic outcome
Although the government was now putting its energy into the Nairobi peace talks to bring onboard the non-signatories to the Revitalized Peace Agreement, we should not be ignorant about dealing with both the political and economic crises. These two battlegrounds can’t be ignored. The gun may be silent, but the economic crisis will never be silent unless we confront it with suave approaches. We ought not to be bystanders. We can’t wait for the regional and international experts’ interventions. I don’t think the South Sudan economic crisis can defeat our wisdom if we act as patriots and eschew political games.
Service delivery, poverty reduction, and well-functioning institutions are the remedies. The implementation of the remaining benchmarks in the RTGoNU, the convening of an economic emergency meeting, market regulations, the limitation of money transactions to foreign countries, preserving the value of investment, abolishing the blank market, triggering currency depreciation, and supporting local food production are some of the measures the government should put into consideration to address economic concerns.
The economic public policy framework shall consider accountability of tax collection, exempted market risk from foreign traders, encouragement of foreign investors, and reducing corruption in diversified supermarket operation zones. The country is rich with fertile soils and abundant water supplies, which can be used for irrigation, hydropower production and industrialization.
The writer, Lieth Nyak Jock, is a South Sudan freelance journalist for the Voice of America. (nyaksimon@gmail.com).
The views expressed in ‘opinion’ articles published by Radio Tamazuj are solely those of the writer. The veracity of any claims made is the responsibility of the author, not Radio Tamazuj.