High inflation instability can damage economic growth through reducing consumers’ purchasing power.
This causes uncertainty, leading to higher interest rates in dangerous cases. It also leads to a breakdown in value of a currency as it happens in some other countries, which, could equally explain the ongoing situation in South Sudan.
Stemming from economic policy failure, tall inflation instability transpires when the policy makers do not achieve quantified objectives as officials wished in the country. Also, the government has not led a multi-sectoral strategy to arrest the economic down-warp.
There are no direct or little foreign investments in the country that would pump billions of dollars into the economy. And this should be the priority for the government to attract more foreign investments in the country’s economy.
However, there is also a need first for the government to create an environment that builds investors’ confidence, legally, politically, and security wise.
The South Sudan system of generating income or non-oil revenues, since independence was not well structured, nor given priority. There was a lot of aid money and oil was smoothly flowing, but nobody headlined an effort to nurture the non-oil revenue sector.
Meanwhile, mismanagement also made us not realize the outcome of both the oil money and donors’ aid.
The current inflation is due to lack of enough hard currency in the reserves as well as in the hands of traders. The deficit of hard currency supply has made it hard for the local pounds to be strong due to insufficient inflow of hard currency into the country that comes with investments.
As the country got its independence in 2011, up to now, good infrastructures in terms of roads connectivity, aviation system, water transport, and communication technology, are not standardized
Government must exert more efforts to have what it takes in order to fix the economic situation in the country, otherwise the poor citizens are already in a dilemma.
God protect South Sudan
Be the spectator!