South Sudanese economy has collapsed

By: Dominic Ukelo (a South Sudanese economist), AUG/21/2016, SSN;

Since the returning of the SPLA-IO members and prior to the Juba Street fighting in July, which led to the South Sudanese economy to collapse, there has been high tension all over the country, especially in the capital, Juba. Some elements in the government were unhappy with the returning of the SPLA-IO members.

Meanwhile, the SPLA-IOs were feeling bitter and disappointed with the government forces’ perpetual harassment and intimidation whenever they met in the capital city. Tension remained high as government security forces began killing SPLA-IO members, including Lt. Colonel George Gismala and Sgt. Domach Koat Pinyien on July 2, 2016, the incidents which fueled the already existing tension.

As a result of the tension, the SPLA and the SPLA-IO forces fought for five days inside Juba, starting from the event at Lou Clinic in Gudele road on Thursday July 7, 2016, followed by the deadly clashes outside the Presidential Palace (J1) on Friday July 8, 2016, leading to the several attacks on the IO position in Jebel Kujur, by the government forces.

Subsequently, the security situation deteriorated, especially, in the capital, Juba. South Sudanese government has continued to fail to provide its citizens with basic public services, such as security, which any government in the world should have provided to its people, in order for them to build their country and thrive economically.

For more than five (5) consecutive years the regime in South Sudan adopted ruling style as of Zaire, Afghanistan and many other failed states, that’s characterized by ill decisions, wide corruption, and predatory ruling.

Moreover, the regime relies entirely on the crafting of ill-advised policy by tribal elites that became dangerous and unsustainable, which have been for long time a reason for the country to be destabilized and the economic growth to be sluggish.

High officials of Salva Kiir’s regime continued in plundering the country’s resources, destined to increase their national stock of wealth, and yet the worst was the higher officials, including the president and his ministers, who decided to deposit the stolen money in foreign bank accounts offshore, which attributed mostly to the collapse of the economy.

What has been happening in the South Sudan is an unprecedented phenomenon. The economy was in critical condition even before the Juba Street fighting occurred.

Before the Juba Street fighting, the government had failed to pay public servants in the country for almost four months. Further, Salva Kiir Mayardit’s regime not only has shelved most important and urgent projects that would have contributed positively into the development of the economy, if implemented.

Unfortunately, the regime has further abandoned its duties to financially support important institutions in the country, leaving for example hospitals without reliable electric supply and the courts without ability to even go forward with its simplest duties, including failing to transport culprits from police stations to the court.

After five days of Street fighting in the South Sudan capital, Juba, the fighting has finally dragged the already deteriorated and abnormal economy to its knees. As like Venezuela, which has an inflation rate of 481.52 percent, the highest in the world, now the inflation rate in South Sudan is predicted to reach an all-time high of around one thousand (1000) percent, in comparison to the 309.60 percent in June of 2016 and an average of 35.75 percent in 2008.

Moreover, foreign currency rates have climbed higher, leading for instance, one hundred dollars to be equivalent to eight thousand South Sudanese Pounds SSPs, instead of five hundred SSP just in June 2016 before the fighting.

As a result, the high rocketing of the hard currency rates have pushed the prices of the Goods in the local market to be tripled as well. As of 16 July, 2016, one kilogram kg of sugar costs one hundred South Sudanese Pounds SSPs instead of thirteen SSP before the fighting, one piece of Onion has increased from five (5) SSP to thirty (30) SSP, one plastic bag of bread has reached forty (40) SSP instead of four (4) SSP, a kg of meat costs eighty (80) SSP, one kg Maize flour eighty (80) SSP, Sac of charcoal cost hundred and twenty (120) SSP, and only four (4) pieces of tomatoes goes for one hundred (100) SSP after the fighting in the capital, Juba.

In light of the hyper-inflation in the country, there has been a critical question raised by ordinary South Sudanese people, the question which needs an answer from their government.

If the average monthly salary in the country is seven hundred (700) SSP, considering that the public servants remain without salaries for the last four consecutive months, how could the population survive without or even with the salary of seven hundred (700) SSP?

The most devastating reasons that led to the South Sudanese economy to deteriorate rapidly, before being flunked by the recent clashes in Juba, are, for instance, volatile political environment and constant civil wars in the country, both trends that could clog up the machine that powers any economy in the world. Lebanon in the eighties (80th) is one example.

The International Monitory Fund IMF and the World Bank WB remain important factors that could help resuscitate the collapsed economy. However, most contributors warn that major powers and the two financial organizations must be convinced first by the government of South Sudan in order to help support the failed economy.

Mostly on the condition that parties are willing to put their differences aside, work together and are ready to put the country back together.

The condition, after the Juba Street fight, observers couldn’t foresee into the near future. Therefore, as the economy collapses, the worst scenario for South Sudan, if the international community did not intervene, would be, unfortunately, either another Rwanda or Somalia case in the continent.

By: Dominic Ukelo (a South Sudanese economist)

1 Comment

  1. Kokora II says:

    Dominic Ukelo
    The picture you posted on the front page said it all. I would like to add more but everyone have seen with their own eyes everything even before July 7-11, street fight. The irony is that we should never even call this a war because when you compare the number of opposition fighters to the regime the skirmishes should have only lasted a day or two but the government spent billions of dollars and countless of their under-trained militias to pursue aimlessly the one person Dr. Riek from Juba to Congolese border in vain. Instead of buying food to feed his flock and take care of his people the President and his hometown brother Paul Malong and notorious JCE are busy preparing for more war, buying weaponry and arming the innocent school children to go and die just to keep Salva Kiir in power.
    Again I really wonder what are these people thought process is, where is the COMMON SENSE in this people? I mean how low their IQ within the human race is. Even Somalia, Rwanda during 1991 genocide, Congo and Burundi look like heaven compared to this baby country.
    I would like to use what another commenter had previously said about these people’s IQ:

    ” Low IQ means the nation has failed, embassies are closing everyday, economy collapsed, zero development etc.
    Low IQ means Jenges were losing the war and ran to UPDF for help
    Low IQ means Jenge people are starving because you can’t feed yourselves,
    Low IQ means Jenge deserted your villages and ran back to Sudan, Equatoria as IDPs, Uganda and elsewhere as refugees
    Low IQ means Jenges are running to beg Bashir for unification
    Low IQ means Jenge depend on UN for food and medical supplies
    Low IQ means UN is sending peacekeepers to babysit Jenge and cleanup your mess
    Low IQ means Jenges perceived Dr Riek was dead but he emerged to shame you
    Low IQ means with all the stolen money, yet the so-called President can’t finish one hospital in his hometown started since 2009
    Low IQ means Jenges are going to lose the war soon or later
    Low IQ means……………………. I could go on and on endless stupidity
    Jenge never liberated anybody, not even Jenge themselves so spare us the rant and wait for the true liberation on the way.”
    A reminder to SPLA IG, remember you are not fighting Jalaba anymore, but you are fighting with South Sudanese revolutionaries, we know you better than Jalaba and we will fight to the last man standing. Over our dead bodies or your dead bodies. We are ready to go as far as you want.

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