By: Dominic Ukelo (a South Sudanese economist), JUL/24/2016, SSN;
Since the returning of the SPLA-IO members and prior to the Juba Street fighting, which led to the South Sudanese economy to completely 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 on 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 a ruling style like those of Zaire, Afghanistan and many other failed states, that are characterized by ill decisions, widespread corruption and predatory ruling.
Moreover, the regime relies entirely on crafting ill-advised policies by tribal elites that became dangerous and unsustainable, which have been for long time the reasons for the country to be destabilized and the economy growth to be sluggish.
High officials of Salva Kiir’s regime continued plundering the country’s resources which are only destined to increase their national stock of wealth, and yet the worst were the higher officials, including the president and his ministers, who decided to deposit the stolen money in foreign bank accounts offshore, which contributed 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 electricity supply and the courts without ability to even go forward with there simplest duties, including failing to transport culprits from police stations to the courts.
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 in the 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 have reached an all-time highest of around one thousand (1000) percent, instead of 309.60 percent in June of 2016 and the average of 35.75 percent in 2008.
Moreover, foreign currency rates have climbed higher, leading to, 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 markets to increase 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 to forty (40) SSP instead of four (4) SSP, a kg of meat costs eighty (80) SSP, one kg Maize flour eighty (80) SSP, a bag of charcoal costs hundred and twenty (120) SSP, and only four (4) pieces of tomatoes go 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 have not been paid their salaries for the last four consecutive months, how can 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 so rapidly before being flunked by the recent clashes in Juba, are, for instance, the prevailing 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, such as seen in Lebanon in the eighties (80th), as 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.
This condition, especially after the Juba Street fight, observers couldn’t foresee in the near future.
Therefore, as the economy has collapsed, the worst scenario for South Sudan if the international community do not intervene, would fortunately be either like another Rwanda or Somalia case in the continent.
By: Dominic Ukelo (a South Sudanese economist)