Only the Government can Save the South Sudanese Pound (SSP) from Further Depreciation
5 min read
Daniel Athior'o Atem Manyuon
By Daniel Athior’o Atem, Nairobi, Kenya
Sunday, September 20, 2020 (PW) — I find the recent confession by the Minister of Trade and Industry before Parliament that, the government is completely powerless and thus unable to regulate the market and save the South Sudanese Pound (SSP) from depreciating unconvincing. The Minister, Mr Kuol Athian was appearing before the parliamentary Assembly Business Committee on September 10, 2020 along with just relieved finance minister Salvatore Garang and Central Bank Governor Jamal Wani to explain how the government is handling the economic situation.
While I am not a senior economist, I fail to agree with the Minister’s position. Even a layman in the countryside knows well how the politicians in Juba and more especiallythose around the ruling house have messed up the country from plunging the country back to conflict, to embezzling millions of dollars from state coffers, signing shady oil contracts, appointing senior government officers based on tribe but not on merit.
Much as it is a free economy, government as the regulator of all sectors has an upper edge in shaping the direction of the economy BUT for the trade Minister to say that the Bank of South Sudan is unable to regulate operations of commercial banks because of a huge debt it owes them is disheartening. Should we say that now commercial banks are self-regulating until the government meets its debt obligations? Well, seems like the minister blundered on this one. Maybe if the minister had cited Coronavirus pandemic as the only impediment in government’s way of revitalizing the economy, that would hold water.
In my September 1, 2020 ‘Politicians to Blame for South Sudan’s Central Bank Foreign Cash Reserve Woes’ published on paanluelwel (online platform) and Juba Monitor (New paper), I reiterated how the lack of professionalism and independent government institutions have contributed to the current mess in the economy. The Trade Minister’s assertions on the state of the economy point to the lack of any serious economists in government. Is it that we have a void in financial planners and economists, NO, they are simply sidelined based on ethnic differences in my opinion?
Besides, I also find the Minister’s solutions wanting. Mr Kuol suggested the government is encouraging corporate companies to buy local products such as gum Arabic, groundnuts and honey for the country to retain its hard currency. He added that exporting big volumes of honey to countries like Japan would bring the much-needed hard currency to the country. My point of contention is the fact that no serious government interventions have been put in place to steer up production of the said products and I doubt whether our farmers can sustain demand if given the opportunity.
It is therefore clear to see that the government got us where we are now. The nine years of independence have only seen government resources directed to security and hefty remuneration for public officers. Key sectors that would turn around the economy in a fortnight such as agriculture, trade and industry, tourism, education, and transport have been neglected.
While it is hard to think of workable short-term solutions to save our depreciating currency due to the Covid-19 pandemic, the government can still focus on the following strategies;
§ Streamline oil sector: Oil is one of the key foreign exchange-earners to South Sudan however a lot of controversies surround the sector from regulation to contract awards and the management of oil revenues. It is therefore important that government benchmarks best practices from Saudi Arabia, Nigeria and Qatar on how to manage the sector. Otherwise, a lot of monies will continue getting to the pockets of a few government officials at the expense of the entire nation.
§ Streamline government appointments: Appointments to senior government positions including ministers, permanent secretaries, commissioners and the like should be made on merit and vetted. The business of appointing certain individuals to appease certain sections of the society is suicidal as it is one of the reasons why the economy is currently in limbo. We have quite many qualified and experienced sons and daughters of the soil who are willing to serve their country but continue to be sidelined by the system.
§ Tough laws on corruption: This vice is rife in South Sudan and has stifled nearly all sectors. The fact that it is a government of family, friends and in-laws only provides a fertile breeding ground. Government and especially Parliament should come tough on this so that culprits are brought to justice. This does not require years and decades to act.
§ Restore Investor Confidence: Political actors in Juba should restore investor confidence by working towards sustainable peace and development. There are lots of investors willing to establish in the country but worried about the unending tensions between government and its opponents. These investors have the potential to turn around the economy by investing in different sectors including manufacturing, agriculture, tourism, banking and insurance which would increase the country’s export potential, employment creation and tax revenue.
§ Commercial Bank Regulation: Lastly, the Central Bank should not shun its prime responsibility of regulating commercial banks simply because the government owes them a huge debt.
The author is a World Bank Blog4Dev2019 Winner-South Sudan|| A Member, World Bank Youth Transforming Africa|| Mandela Scholar. Email: atemathior@gmail.com/ daniel.athior@strathmore.edu Skype: atem_daniel
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