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South Sudan’s inflation has tested the leadership of President Salva Kiir and his five vice presidents – Dr. Riek Machar, General Taban Deng, Dr. James Wani Yigah, Hussein Abdulbaghi Akol and Rebecca Nyaden.
As top decision-makers, do they really have the ability to save the country from economic collapse?
Since the war broke out between the government and the opposition in December 2013, South Sudan’s economy has fallen into a serious recession. Most of the people have no financial resources and are often in a food and clothing crisis.
However, 13 years on, despite the implementation of the Revitalized Peace Agreement, South Sudan’s economic crisis has intensified. The economic situation has continued to deteriorate. High production costs, shortages of goods and services, insufficient local production, high transportation costs, high inflation, falling oil production, rising food prices and political instability have led to a depreciation of the South Sudanese pound against the US dollar, causing real distress to the people.
The unprecedented economic crisis has forced the leaders of South Sudan to plan a Governors’ Summit. From September 4 to 8, 2023, the government held the first National Economic Conference in Juba with the theme; “Towards Diverse, Inclusive and Sustainable Economic Growth.” The conference, which brought together senior government officials, economists, business leaders and other stakeholders, produced a number of recommendations on economic reforms and improving financial conditions.
That meeting was held when Dr. Buck Barnaba Joel was the Minister of Finance. Dr. Joel was appointed as a young economist to drive economic transformation. Unfortunately, economic transformation was not achieved until he left office. People have not seen any results from the resolutions made during the meeting. Joel’s reform agenda was strongly opposed because civil servants had not been paid for several months.
The civic optimism and stakeholder energy injected into that symposium has all rotted in the garbage. Today, economic despair has arrived at everyone’s doorstep. Due to the high cost of living, rich and poor are crammed into the same room to take care of themselves.
Citizens’ expectations
What does it mean to say that economic crises test the capabilities of our leaders? Leaders seek opportunities to exploit them in response to disasters, political instability, development plans, poor land management practices, lack of financial resources and economic crises.
If these pressing issues are not addressed, the government may face popular opposition or resistance. South Sudan’s fiscal deficit has reportedly improved to 4% of GDP in 2022-2023 in response to fiscal consolidation. However, some reports say South Sudan faces a high risk of debt distress, with a debt-to-GDP ratio estimated at 34.5% in 2023. The African Development Bank Group claims that GDP is expected to recover by 1% in 2024-2025.
Where is the graffiti economy going? In the past two years, when the US dollar exchange rate fluctuated between 100,000 and 200,000, it was fair and people could still support their families, but this year when the exchange rate rose to more than 400,000 South Sudanese pounds, the exchange rate became so rigid.
Since the civil servants’ salaries have been stopped for months, the vulnerability of South Sudanese has increased. Can our leaders continue to doze off in their comfort zone? I don’t think so. The whole world is watching us. It is time to wake up, throw away the pillows and take stock of public issues. Regional and international partners want to see us use our wisdom as a sovereign nation to manage our national affairs in a competitive manner. It is time for the top leadership to make wise decisions and save South Sudanese from the hustle and bustle and imminent hunger.
The Presidency should take immediate strategic action to address the economic problems. Three months ago, I expected a summit to review the resolutions of the 2023 Governors Conference so that the unity government could take difficult economically feasible measures to save the country.
However, the presidential palace has remained silent. This thinking shows that there is no public economic policy framework to alleviate the suffering of the South Sudanese people. Policymakers have the constitutional power to formulate public policies. The president has fired the finance minister and some officials of the Central Bank of South Sudan due to economic failure.
The two institutions (the Ministry of Finance and the Central Bank of South Sudan) have been injecting millions of dollars into the market every week for four years in an effort to combat high inflation. However, this strategy has never gained ground because the volatile currency rate would briefly fall and then rise each time money was injected into the market.
Why is it not the best idea to inject money into the market? It is not because reducing the constraints of fermentation rates through narrow market regulation is only a temporary solution. Merchants are given the greatest freedom and sell goods according to their own interests, which creates an economic burden on citizens. When the exchange rate decreases, the price of food commodities does not decrease immediately, but remains increased until the exchange rate increases again, giving merchants an advantage to exploit the people.
despair
Hunger is a global threat and can be a source of fragility, crime rates and a decline in a country’s GDP. In the worst cases, it fuels hatred between the rich and the poor, including unemployed youth surviving on the streets. This is not a new situation in South Sudan. Many people were killed by unknown gunmen from 2013 to 2016 during the political unrest. Many criminals prefer to use robbery to make a living. Since last week, there has also been evidence of some security threats in Juba.
Citizens are being urged to exercise caution as unidentified gunmen or TorotosThe thugs who often rob people of their belongings have reappeared in different places. Young people who have nothing will be more willing to take advantage of those who have little to eat. The desperation that hunger brings us will endanger peace and trigger threats to the country from criminals who want to lynch people. If the government does not pay more attention to this situation, criminal behavior will increase in the coming months. Even the general election we are talking about will face obstacles.
Economic Results
While the government is now focusing its energy on the Nairobi peace talks to attract non-signatories to the Revitalized Peace Agreement, we should not lose sight of how to deal with the political and economic crises. These two battlefields cannot be ignored. The guns may be silent, but the economic crisis will never be silent unless we deal with it in a gentle manner. We should not sit idly by. We cannot wait for regional and international experts to intervene. I believe that if we act like patriots and avoid political games, South Sudan’s economic crisis will not defeat our wisdom.
Service delivery, poverty reduction and well-functioning institutions are the remedial measures. Implementation of the remaining benchmarks in RTGoNU, convening an emergency meeting on the economy, market regulation, limiting currency transactions with foreign countries, protecting the value of investments, abolishing blank markets, inducing currency devaluation and supporting local food production are some of the measures that the government should consider taking to address the economic problems.
The economic public policy framework should consider tax accountability, market risk exemption for foreign businesses, encouragement of foreign investment, and reduction of corruption in diversified supermarket areas. The country has fertile soil and abundant water for irrigation, hydroelectric power, and industrialization.
Lieth Nyak Jock is a freelance South Sudan correspondent for VOA.Contact email: nyaksimon@gmail.com.
The opinions expressed in “Opinion” articles published by Radio Tamazuj are solely those of the author. The authenticity of any statements made is the responsibility of the author and not Radio Tamazuj.
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