Viable solution to economic crises of South Sudan

Posted: March 18, 2017 by PaanLuel Wël Media Ltd. in Baak Chan Yak Deng, Opinion Articles, Opinion Writers

By Baak Chan Yak Deng, Juba, South Sudan



March 18, 2017 (SSB) — For the South Sudan, I really feel the economy could be helped, if there is strong and decisive leadership. The fundamental thing is the government need to stop emphasizing the need for austerity and hard times. This is currently trying its best to take us into a recession. It is not just a fiscal crisis; the real problem is prospect of a second recession.

For us to come back to our normal position like 2005 and 2012 we have to reconcile and look into the following fundamental problems which led the dwelling and crippling of our economy so much and these problems include; Lack of Economic growth, High Unemployment rate, Long term structural deficits and Lack of Confidence in finance and consumer sector.

After we have known the primary problems of our economy then it will be easy for us to go for these Solutions for examples I may say my Number One priority is to Target Economic growth and reduce unemployment. At the very least, economic growth needs to be close to long run trend rate 2.5%; it actually needs to be higher to catch up with lost spare capacity. Strong growth will help boost tax revenues and reduce unemployment. It is only in this climate you can successfully reduce deficit.

There is supply side unemployment, especially in Africa, which has seen prolonged structural unemployment in past two decades. But, the fundamental cause is lack of aggregate demand. The South Sudan should make a point of not cutting spending in this current economic climate. Governments should be bold and say the best way to reduce Debt or Gross Domestic Products GDP ratios – is to increase GDP and this is what we are going to do.

Governments have to stop focusing on the negative and the necessity for austerity and hard times. If they want to turn around consumer and business confidence, they should convince the country their aim is to boost growth and reduce unemployment and this is the thing that will really encourage stock markets and bond markets.

Long Term Deficit:-Many countries are making the mistake of trying to solve long term structural deficits, by sacrificing short term growth. In the name of long term structural change, governments are deflating the economy at a time when they should be doing the opposite.

The South Sudan should be setting out plans to reduce the long term deficit, but this should not be involving short term cuts in spending on important capital investment.

These long term policies should involve the following: Rising retirement age in response to ageing population, Evaluating automatic health care spending in South Sudan, Seeking to move people off long term benefit for example helping those on disability allowance find less taxing jobs and Planned Tax rises which are appropriate for incentives, efficiency and equality for example South Sudan should be planning to raise tax on petrol, and tax on those high income earners who have befitted from recent tax cuts.

These kinds of policies are sustainable and actually make a big difference to long term budget situation. If you sell off assets or stop current capital investment projects, it is a very limited benefit to the long term budget. But, if you make changes to retirement age or entitlement spending this isn’t just a one off benefit, but a permanent improvement to the government’s fiscal position.

Bond yields in the South Sudan are near record lows. If the government came up with plans to improve long term budget situation over next 20 years, markets would be willing to lend for short term economic recovery.

The author, Baak Chan Yak Deng, is a graduate in Bachelor of Science in Accounting and Finance at Star International University of South Sudan Affiliate to Busoga University of Uganda and can be reached at or 0954020202

The opinion expressed here is solely the view of the writer. The veracity of any claim made are the responsibility of the author, not PaanLuel Wël: South Sudanese Bloggers (SSB) website. If you want to submit an opinion article or news analysis, please email it to SSB do reserve the right to edit material before publication. Please include your full name, email address and the country you are writing from.

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