South Sudan Economy Collapsed Around Oil and a Bank

By Malith Alier, Kalgoorlie, Australia

Saturday, September 12, 2020 (PW) — This past August, two different messages came out from the Bank of South Sudan, BSS, and by the top management of the that bank. The first message by the Deputy Governor was that the bank ran outforeign currency reserves. Hours later, his boss came out with a statement one would mark for damage control. “We are not on our knees,” said the Governor of the top bank in the land.

A lot of people would not understand thesecontrasting phrases at this time of economic uncertainty. Civil servants and army in this country have gone on close to 12 months without that meagre salary. The budget for financial year 2020/2021 may never be prepared due to many things including coronavirus and or due to lack of legitimacy of the national parliament occasioned by the Revitalised Agreement on the Resolution of Conflict in South Sudan, R-ARCSS.

The ordinary people in South Sudan who have no knowledge of the economy, if you speak to them, would tell you that the so-called oil economy collapsed when covid-19 struck in march and oil prices dropped as a result. The fact that it took several months and up to the end of August for the bank to come out in the open should take nobody by surprise.

Between the two conflicting statements, one would conclude that the deputy governor was telling the truth. That cold fact which caused brain freeze in some quarters was later diluted by the governor who once upon a time was the second deputy to Cornelius Koriom Mayik from 2011 until he was sacked years later. The fact that he returned as governor is attributed to recycling of failed officials that has bedeviled the government apparatus for years.

South Sudan economy is an interesting one right from inception. It is also a peculiar one compared to other economies in the region that have been around for over forty years without petrodollars. Many neighbouring countries like Kenya and Uganda among others have recently discovered oil but not yet drilled and pumped for the markets.

The ‘oilyphilia’ in South Sudan has been diagnosed to be a risk many years ago by the observers and experts alike. First, oil is a non-renewable resource. It may get depleted over several years without warning. Second, oil prices continue to fluctuate in the world market because of a number of critical factors that are beyond the oil producing countries.

Things like war greatly affect the oil production or prices. The amount of oil production (output) is a factor that can either lower or raise demand of the commodity significantly. Then there are emerging threats that not only shut down production but alsothe oil market in an instant. Coronavirus is the latestthreat to starkly bring this to the fore.

Coronavirus shut down air travel around the world in a matter of weeks. The reserves of national fuels, leave alone the new production, could not be used during this time. Lockdowns in certain countries where coronavirus heavily hit meant that no one uses fuel for even local travel. Public and personal transport came to a standstill. 

The two scenarios above, have an impact on the fuel market and those who rely solely on oil are helplessly stranded as they are dump-founded.

Happenings were not to be the same after the unfortunate but expected BSS announcement. The scramble the citizens saw when the government hastily put together what it called ‘Economic Management Committee,’ EMC, is nothing new in the history of this nation. At various points since oil shut down of 2012, the same individuals have been part and parcel of similar committees.

No wonder the same individuals are the ones in charge of the national economy at the time of their appointment. Therefore, the citizens think that this group is the one that hunts with the hounds and at the same time runs with the hares! There is no expecting different results if the same politicians were the ones who failed to predict and manage the dire economic conditions the country finds itself in.

There is a lot of revenue lying around in South Sudan waiting for the government to collect. Tax or revenue collection is an area that was overlooked all over the country since independence. In some instances, where the government collects revenue, it goes direct to individual pockets in daylight robbery style.

The customs officials at the borders and entry points are the direct beneficiaries of the revenues collected there in the name of government. Once employed, the customs officials become imposters, collectingmonies for themselves, their friends and their families in disregard of the enabling Act.

The EMC has now accused the Director General of Customs and recommended his removal. This is superficial. The problem goes deeper than that.

The department of Passports, Nationality and Immigration is said to have misappropriated millions of Pounds over the years. This revenue was supposed to have been deposited into a single governmentrevenue account in the bank.

The Traffic Police, also known as Department of Transport, DoT in some countries, is another leaking basket in this country. The traffic police officers are seen sweating it out on the main roads for their own gain. They only have the government uniform without government heart.

The registration of births, marriages and deaths is another area where the government may generate huge income from. The hospitals are the ones doing registration of births and deaths for free or for a small fee that goes directly to individual pockets. Thousands of marriages a year just go unregistered in a traditional way. 

In addition, those marriages, millions of Pounds exchange hands and there are no official records. People continue to change their names at will without legal force.

Gold mining, which is supposed to be a national resource like oil, is now a private enterprise for private citizens. The powerful individuals in government, their families and friends have arrogated the goldfields in Kapoeta and beyond to themselves. No one dares to question them on this matter. The latest report by the Sentry was the only window the citizen saw the light of what is going on in gold exploration. 

The report observed that childrens of politicians and generals are the ones owning shares in the faceless mining firms around the country. There is one man who dominated the politics of the goldfields since 2010. His support to remain the sole operator in that resource rich part of the country is sanctioned from Juba. No doubt many citizens discovered that scheme and remark that gold is one hundred times thicker than blood!

South Sudan national survival is at stake. The dire economic problems are not only affecting the citizens but also threaten the country’s memberships in regional and international organisations. This countryis a member of Intergovernmental Authority on Development, IGAD, East African Community, EAC, African Union, AU, United Nations, UN. The country recently applied for membership in the Arab League.

These regional and international organisations entertain serious members who pay their subscriptions on time and in full. Recently, we had news from Arusha that South Sudan was to be suspended for not pay about 8 million US Dollars membership dues. There was also disquiet in Addis Ababa by AU about South Sudan not meeting its obligations.

Being voluntarily in these organizationsis not a free pass. It comes with privileges, duties and responsibilities to subscribing states. Oil dependency, tax evasion, insurgency, privatization of public resources, collusion to defraud the state are among things that are destroying the country’s economy. They may not be addressed by the ones who are wearing kids’ gloves.

Ad hoc economic management committees have been there from time to time since independence. The government has the guts, as always, to form them at times when the economy is in bad shape. Sadly, their studies and recommendations are not followed through as they are short-lived. The fact that the people handpicked to be in those committees are same folks in charge of the economic institutions does not help matters a lot. Fresh minds and talents may go a long way.

You can reach the author via his email address: alierjokdeng@gmail.com

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