The Struggle for Economic Stability Demands Collective Efforts in South Sudan
By Ater Garang Ariath, Aweil, South Sudan
Sunday, 31 March 2024 (PW) — South Sudanese political elites must prioritize addressing the economic hardship severely impacting the already impoverished citizens of South Sudan.
The first driver was the political tussle surrounding the Revitalized Government and its roadmap. If not handled deftly by policymakers, this conflict could escalate into a full-blown political and constitutional crisis by December 2024. The roadmap government must work collectively to prevent internal divisions from derailing progress.
The second driver was economic. As the world emerged from the COVID-19 pandemic in early 2022, prices skyrocketed in the Global North. Russia’s hostilities with Ukraine in February 2022 led to 40-year-high global inflation, putting massive strain on South Sudan’s already struggling economy with high inflation and lack of job creation.
South Sudanese policymakers must address genuine economic concerns, as the current stagflation has made life extremely difficult for most South Sudanese people.
The combined political and economic pressures pushed South Sudan’s economy to the brink of default. As global oil prices soared, policymakers failed to make optimal economic decisions, partly due to political turmoil and partly because optimal moves like passing on higher oil prices or allowing market-driven exchange rates entailed political costs the roadmap government was unwilling to pay.
Some politicians exacerbated the crisis by manufacturing chaos, claiming imminent default to force early elections in 2024. This deliberate strategy created needless panic, prompting people to acquire more foreign exchange, further fueling inflation.
I am well aware that the current government faced severe political pressure from conflict-weary elements holding the country and its citizens hostage for political gain, but they should have shown political mercy.
As the nation’s leaders, you must address the economic crisis afflicting the masses rather than engaging in political rhetoric for upcoming elections, which will serve no purpose.
This critical time calls for collective responsibility from all South Sudanese political leaders to set aside ideological differences and find viable solutions to the country’s economic insecurity.
Amid global instability, South Sudan faces a deflating economy, spiraling inflation, persistent intra-tribal conflict, and political paralysis, compounded by an influx of Sudanese refugees and South Sudanese returnees due to the catastrophic Sudanese conflict.
With global recession looming, South Sudan’s political leadership under the Revitalized Government must unite and confront the perfect storm of economic decline, rampant inflation, insurgency threats, and political paralysis.
Neither the government nor opposition seems capable of wielding or relinquishing power effectively. The result is political paralysis amid an economy burdened with unmanageable pressures.
South Sudan faces macroeconomic crises demanding responsible political leadership to concert multi-partisan efforts to rescue the country and its people.
In the absence of a systemic approach, the economic outlook appears bleak. The central bank’s dollar auctions with the Finance Ministry seem implausible and require policy redesign.
The risk of foreign debt default remains a hot topic, with falling forex reserves and the dollar gaining value against the South Sudanese Pound daily.
Initiatives like diversifying domestic finance sources for productive sectors and encouraging energy sector investment will take time but are insufficient for economic turnaround and sustained, inclusive growth.
The central bank plans to update its primary dealers’ system to create more capital market functionaries and attract new investors to the government securities market by allowing microfinance banks and specialized primary dealers to open Investor Portfolio Securities accounts, enabling branchless and mobile banking users to access government securities.
“As financial conditions tighten and capital flows move away from emerging markets, domestic markets need to fill the gap and mobilize domestic private capital for infrastructure, corporate investment, small- and medium-sized industries, and climate-focused projects.”
Facing acute dollar shortages and high inflation impoverishing South Sudanese without salaries for months, the government should expedite efforts to exploit other revenue sources like agriculture and gold mining to diversify the economy.
However, as one economic analyst states, “we urgently need an Emergency Economic Stabilization program with three components: external debt sustainability framework, fiscal stabilization plan, and structural reforms. There is no other way out.”
A growing number of opinion leaders stress evolving a charter of the economy, a charter of democracy, and effectively enforcing these with a charter of governance.
The Writer is a South Sudanese journalist and Former Secretary General of the defunct Aweil East State.
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