Finance Minister on the Economy: No Gain Without Pain
4 min readBy Malith Alier, Juba, South Sudan
March 29, 2015 (SSB) —- Deng Athorbei is now a little over three months after reappointment as minister of finances and economy. It is his second stint at the portfolio, which has prompted some analysts to refer to his appointment as that of the old-guard.
The finance ministry has seen more downs than ups ever since the interim period with various ill-suited ministers beginning with Arthur Akuen Chol. The other ministers were Kuol Athian, Deng Athorbei, Kosti Manibe and Aggrey Tisa Sabuni and now Deng Athorbei once again.
Their tenures have witnessed mega financial scandals like infamous Dura saga at the time of Kuol Athian, illegal transfer of eight million US Dollars at the time of Kosti Manibe. It looked like one scandal was replaced with another. Even Deng Athorbei’s period was not spared of irregularities.
Many commentators already heaved praises on the newly appointed minister in contrast, he is more aware of the herculean task before him. It is not going to be a plain sailing and therefore, it is too early to sing undue praises because the minister has not even settled in and began to chart a new course of action to put this vital docket on the right path to success.
This author can’t start by praising the incoming minister but would like to caution those who are overzealous about the prospects of achieving economic success to be prepared for possible shocks as a result. Although not economic experts but we know what sound economic management entails.
It is always a popular demand here in Juba and over the country that the Pound must remain strong against the Dollar. This is not supported by facts on the ground. The Pound now exchanges at 7.20 per Dollar in the parallel or black market as opposed to the official rate fixed at 2.9623 per Dollar.
Conversely, it is encouraging that the incoming minister is set to address this issue along with other pertinent matters to stimulate the dormant economy.
In a meeting last week with donors, the minister offered two bowls on his hand; the donor and the loan bowls. The learnt minister will have an audience if this is in return to fix the ailing economy. The donors had poured large sums and the creditors did the same in the past with little results. Now the minister learnt through experience therefore, is ready to address workforce issues like retirement of senior civil servants, long overdue.
He is ready to address exchange rate regime from fixed to flexible regime. Deng Athorbei is ready to retrench the excess workforce. A particular mess is in the armed forces like the SPLA, Police, Prisons, wildlife and Fire Brigade. A chunk of the budget goes to the salaries of these forces.
The minister realises that the government overspend the monthly budget in the wake of declining oil revenues. The oil revenues are the mainstay of the economy. In words of the one South Sudanese MP, we have to seal our leaking basket before the exchange rate deregulation. The time to do so is overdue.
In summary, it is encouraging that the incoming national Minister of Finance and Economic Planning has immediately embarked on the revival of the economy before total collapse. This task can’t be done by the country alone. It needs involvement of international donors and credit institutions to fill the widening gap. A true stimulation of the economy needs development of a meaningful private sector.
Therefore, the country must get prepared to face the components of the restructuring exercise. Retirement, retrenchment and exchange rate regime (the three Rs) must be the consequences of economic recovery.
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