Economic turmoil: The experiment of life in South Sudan
By Alith Ayuen Kelei, Juba, South Sudan
June 18, 2016 (SSB) —- Following a peaceful secession from the Sudan through a referendum in January 2011, The Republic of South Sudan became the newest nation on the Globe. As a new nation, South Sudan has having multiple challenges to deal with such as the internal political instability, concrete for defined boundaries with The Mother Sudan, creation of good relation with neighbours and corruption along with huge development needs.
Now it’s a galloping inflationary gap which has left the mouths of the population within the Nation and in diaspora wide open. This economic crisis has made life a comedy to the well of the so-called The Rich. However, South Sudan also has significant oil wealth, which could have been effectively used to drive development and provide the basis for progress in the past years.
Unfortunately, the nearly two-year long conflict, which broke out in Juba on December 15, 2013 and later engulfed three of the 10 states of the country, deteriorated developmental gains that could have been attained since independence and worsened the humanitarian situation, Life is now a tragedy to the Poor in The Republic of South Sudan. Though we expected that the implementation of the Compromised Agreement on the Resolution of the Conflict in the Republic of South Sudan, signed by the President and the Opposition in August 2015, would put in place the necessary framework for peace and security, and lead to longer-term development and prosperity, Life is becoming a dream only to the wise and so a fundamental game to the foolish.
In spite of the fact that South Sudan has vast and largely untapped natural resources, beyond a few oil enclaves, it remains relatively undeveloped, characterized by a subsistence economy. South Sudan is the most oil-dependent country in the world, with oil accounting for almost the totality of exports, and around 70% of its gross Domestic Product (GDP). On current reserve estimates, The World Bank reports indicate that oil production is expected to reduce steadily in future years and to become negligible by 2035.
The country’s growth domestic product (GDP) per capita in 2014 was $1,111 and Purchasing Power Party estimated to be 14 billion in 2015 as reported by the World Economic Outlook and IMF. Outside the oil sector, livelihoods are concentrated in low productive, unpaid agriculture and pastoralists work, accounting for around 15% of GDP. In fact, 85% of the working population is engaged in non-wage work, chiefly in agriculture (78%) with the current country’s Consumer Price Index showing 824.07
The recently conflict, has had a significant economic impact on South Sudan that saw 2015 GDP coming in much less than projected. Furthermore, military expenditure increased, further reducing the availability of resources for service delivery and capital spending on much needed infrastructure.
South Sudan’s discounted Dar blend oil prices decreased by 40% from $29.75 per barrel in December 2015 to $18 per barrel in January 2016. Production also significantly declined over the same period, cutting gross oil revenue by more than half from $29.7 million in December to $10.8 million in January.
The decline in oil revenue, has also had a negative impact on macro-budgetary indicators, requiring austere fiscal adjustments. The current account has deteriorated considerably leading to depreciation of the parallel exchange rate and fueling inflation. The low level of foreign reserves have negatively affect food imports with further knock on effects on food intakes, notably during the “lean season,” which runs between April and October. The incidence of poverty has also worsened, from 44.7% in 2011 to more than 58.5% now making life a tragedy to The Poor.
Conclusively, The Transitional Government of National Unity, TGoNU must institute the National reforms including Strategies to eradicate poverty in order to lift a Junubi from the status of a third class citizen he/she was in Sudan to a First Class Junubi in the Beloved Country.
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