An open letter to Hon. David Deng Athorbei, Minister for Finance and Economic Planning
Why doing nothing is not an option: An open letter to David Deng Athorbei, Minister for Finance and Economic Planning
By Agok Takpiny, Melbourne, Australia
June 22, 2016 (SSB) — The financial crisis is getting deeper by the day. The judiciary and Universities lecturers are on strike because they have not received their salaries for months. The army, the police and other government employees are doing it tough. Food prices in the market are almost out of reach of everyone; this is because the country’s currency (SOUTH Sudan pound or SSP) has lost nearly sixty percent (61%) of its value against the US dollar.
Currently, one dollar ($1) is equal to 51 SSP. As South Sudan is 100% dependent on imported goods, traders need dollars to go overseas to buy goods. Typically, merchants purchase good at one price and then sells the good for a higher price. Markup pricing is a cost of goods plus desire profit. By having the markup on products, a trader can earn profits. If the importer sells the goods for what they cost, then he or she will not make a profit, the selling price would just match expenses, thereby not earning any profit.
So how do the traders do it to ensure that they get their benefits? Well, the traders monitor the exchange rate of the SSP against the dollar in the black market. Traders don’t rely on the official rate simply because it is only on the black market the dollars are available. So, if the exchange rate in the black market goes up in the afternoon, the traders would automatically increase the prices of the goods to reflect that. Hence, the prices of goods in the country become notoriously unstable; this is the core issue that causes the current economic free fall.
Therefore, to rescue the economy from total collapsing, the government will need to find ways to bring in more dollars and find it fast, not an easy task. However, if there is courage to make tough decisions, it can surely be done.
Dear Hon Deng Athorbei, as a minister of finance and economic planning, it is 100% your responsibility to advise the president and the entire government about what need to be done to stabilise the economy. I do not believe that the president is in your way in applying much needed economic reforms. Honourable, your creditability and legacy are on the line here, people are starving in most parts of the country including in Juba.
Show the country what you are capable of doing. And if the president refuses to take up your plan, you can explain it to the citizens and then resign in a dignified way. What you need to do is to cut government spending by half. The following are my suggestions about areas that the government can do without but save the government a significant chunk of money:
- 1. Reduce the number of South Sudan embassies from current 24 to just 13. Close down eleven (11). As a finance minister, you and your team will need to explain to the cabinet in details how much the government would save by closing down ten (11) embassies. If we have all the money in the world, we could have an embassy in a very country. Unfortunately, we don’t have enough money to be able to sustain a huge number of embassies around the world.
Therefore, the thirteen diplomatic post I suggest is the vital one for us. Here are the thirteen countries which are strategically important to South Sudan: Uganda, Sudan, Kenya, Egypt, Ethiopia, South Africa, Israel, USA, UK, Norway, Belgium, Russia, and China.
- Amalgamate ministries from 30 to just 12. Honourable Minister, to achieve this, your argument would have to be stunningly convincing. The opposition would need to be involved in reaching the consensus. Yes, there is a fear or believe that the current thirty (30) ministries were created merely to accommodate everyone. People think that if 18 ministers or whatever number loses their jobs, they would immediately take up arms and rebel. However, there is a way to tackle it, the 18 ministers who would lose their jobs would still be receiving their ministerial salaries (this would silence them).
The government would save a lot of money here. The running cost of 18 ministries and allowance for the ministers is bigger than the official salaries. All the other junior staffs in those 18 departments should be laid off; this would reduce the government workforce significantly which would save the government money. Here are the eleven (11) ministries which their services are of immediate need: Health, Education, Finance, Petroleum, Justice, Defence, Foreign Affairs, Agriculture, Transport, Interior, Ministry of Security in the office of the president, and Information.
- Cease all unnecessary overseas travel by government employees. At the moment, even those who should still be on a graduate program (gaining work experience under supervision), are using government money to travel in first class to none essential workshops abroad. These workshops are not helping the country in one way or another; they are a total waste of money. Hon Minister, at times like this, luxury is hugely unaffordable, this means that only the president and his two Vice Presidents should use the first class if at all there is a need for them to go overseas. Honourable, the multiple embarrassing thefts in the office of the president and the police HQ were unacceptable.
Therefore, it is time to introduce strict control measures in all government transaction. While the President should be ban from writing cheques that would be cashed out at the central bank, the amount of money kept in any office including that of a president should not be more than the equivalent of $10,000. Honourable Minister, all the government employees including the army and police, should be head counted; this would unearth ghost employees in the system. Honourable, it is a good thing to be generous when you can afford to do so.
However, our current situation does not allow, that; hence, releasing an employee with his or her salary for a four years studies is not sustainable. All form of government sponsorship needs to cease. Furthermore, Tax collection need a review. Honourable, a sound taxation system would generate considerable revenue for the government.
Therefore, an extensively qualified tax commissioner is needed. And he or she must be given full powers to pursue tax avoiders in the court of laws.
You can reach the author via his email address: Agok Takpiny <agoktakpiny@ymail.com>
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