Covid-19 Pandemic and the Future of South Sudan’s Economy

By Daniel Athior’o Atem, Juba, South Sudan

Monday, June 15, 2020 (PW) — South Sudan registered the first Covid-19 case on April 5, 2020. However, the infection rate since then is worrying. According to the Ministry of Health, Friday reported, the country had 1,693 Covid-19 confirmed cases, 27 deaths and 49 recoveries as of June 12, 2020.

Some Senior government officials that openly declared their status included the 1^st Vice President Dr Riek Machar, and his wife, Minister of Defense Angelina Teny, Vice president Dr James Wani Igga, Vice President Abdelbagi Hussein and other private citizens that have not been spared by the Covid-19 wrath.

The fact that senior members of the Covid-19 Task Committee have contracted the virus raises suspicion on; the country’s response strategy, testing capacity and efficiency. 

The virus struck at a time when South Sudan’s politicians are forging a way forward out of the bloody conflict that erupted in 2013. The coalition government created in February 2020 came in effect and the focus now has been rebuilding the sustainable peace and economy. The civil war caused a lot of destructions to the country’s already abysmal infrastructure.

Between 2014 and 2017, the South Sudan economy contracted only to recover reaching 3.2 per cent in FY18/19. According to the World Bank’s latest Economic Update for South Sudan, the economy is still affected by high inflation which stood at 170 per cent in October 2019.

However, development partners forecasted positive economic outlook after the peace agreement and coalition government formation. The World Bank projected a 7.9 economic growth for FY2019/20. 

The Covid-19 epidemic, however, casts doubt on South Sudan’s economic growth. Currently, almost all efforts are geared towards efforts to combat the virus. Oil is the strongest pillar holding South Sudan economy contributing more than 70% of the country’s gross domestic product according to the World Bank however the current fall in oil prices seriously affected the country’s oil revenues.

The lack of transparency in the management of oil revenues has constantly raised questions about the sector’s contribution to national development. Beyond oil, other sectors are stagnant with no or low funding. Poverty levels remain high with livelihoods mainly concentrated in low productive, unpaid agriculture and pastoralists work.

Government has not invested in key sectors like agriculture, education, trade that have the largest knock-on effect on poverty reduction. 

Coronavirus restriction measures such as social distancing, air travel restrictions, country lockdown, borders closures(partially) and strict surveillance only make the situation even worse for a common person.

Locking up the country where over half of the population is engaged in small petty businesses such as market vending, retailing, agro-business, hawking and street vending does not only deprive local governments of revenue but condemn our people to abject poverty and famine.

One would think that our people can resort to farming BUT the sector has been underfunded by the government. The poor road network makes it hard for farmers to access markets with their fresh produce and they end up selling at farm gate prices.  

Lockdown and border closure have been lauded as effective Covid-19 control measures by the World Health Organization. However, the South Sudan government has no capacity to sustain its population under total lockdown. Majority of the population work for daily wages and it requires the government to give them some relief items such as food and water to get them through the lock downtime.

Not to forget that the country had serious food security issues before Covid-19. Prior to the COVID-19 pandemic, 55% per cent of the population was expected to face severe food insecurity at the height of the May to July annual hunger season according to the UN.

The tight border restrictions among East African countries have greatly affected the importation of basic commodities like sugar, soap, detergents and cooking oil. This is likely to make the inflation situation worse. 

The epidemic has further dealt a serious blow to the budding tourism sector. Emerging out of the conflict, tourism is one of the key sectors that the Government of South Sudan is looking at for diversification from dependency on oil. Tourist activity had started gaining momentum from, especially foreign visitors attracted by our rich diversity.

The country is endowed with the Nile, 6 national parks and 13 game reserves. The hotel sector is equally affected by the Covid-19 pandemic. Air travel restrictions coupled with national lockdown deny the country earning the much-needed forex. 

Long before Coronavirus, transparency and accountability in public sector management have been a contentious issue in South Sudan. The country lacks an effective public finance management system especially when it comes to none oil revenue generated from taxes, tourism, agriculture and trade.

Many times government officials have been involved in corruption scandals and they are hardly charged. With such kind of leaders, the public is worried that Covid-19 is just a perfect opportunity for corruption to thrive in the guise of fighting the pandemic.  

Recommendations

The government should improve transparency and accountability in public expenditure. Steps should be taken to provide timely and accurate information on revenue, spending, arrears, debt, and budget execution.

The government should diversify the economy to stop heavy reliance on the oil ‘cursed’ revenue. There is a need to increase allocations and investment for service delivery, particularly in education, health, and rural development, necessary to improve resilience, reduce poverty, and build a stock of human capital and avoiding a lost generation. 

Agriculture should be highly prioritized while budgeting. Now that the country heavily depends on imports of even basic commodities like sugar, food security should be paramount. It is likely that other sectors such as manufacturing will be born out of agriculture. 

Sustainable peace is needed for the development of the tourism sector in South Sudan. For long, the country missed out on millions of dollars in tourist fees because of the war. Government efforts should be geared towards developing tourist sites and boosting the hotel sector. 

The author, Daniel Athior’o Atem, was 2019 World Bank Blog4Dev Winner for South Sudan||A member of the Youth Transforming Africa||Mandela Scholar. He can be reached via his email: atemathior@gmail.com. Check new article every Monday

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