By Bida Elly David
South Sudan’s inelastic Gross Domestic Product (GDP) is expected to gain position as the Country opens eyes to engage itself with other nations into bilateral ties to promote infant domestic industries to meet global trade.
The efforts invested by the government seemed to have been floating in a basket of inflation as the US dollar rate takes lead against the local currency in the market.
In a recent meeting between the government of South Sudan and Kenya, a matter pertaining continuous economic recession of the young nation was deliberated and remedies to the crippled macroeconomic turmoil were suggested.
The discussions resolved ways through which South Sudan and Kenyi would be set free from balance of payment problems that has been passively impacting the Gross Domestic Products of the two nations.
The officials brainstormed on how to mend the declining investment position of the two Countries; suggesting that improving roads for access would be a significant point to strengthen their economies of scales.
According to Hon. Deng Dau, the Deputy Minister of Foreign Affairs and International Cooperation, the two East African countries in the region have been backing themselves up in various areas of political, economic and cultural dimensions.
Speaking to No.1 Citizen Daily Newspaper yesterday, Abraham Matoch, an economic analyst said that the Country’s economy remains at a recession point due to high dependency on imports.
He said that the continuous level of market imbalances and inflation resulted because local industries are not supported to produce their commodities as insecurity upsurges.
He also said that there is no way the local currency would gain value against foreign exchange if domestic industries are not supported fully.
Abraham also said that leaving market to run in a free system without the intervention of the authority has become one of the factors giving rise to foreign market monopoly.
He said that in a growing Country like South Sudan, the government should fix the foreign exchange rate and impose restriction on black market.
“The government should fix the rate of exchange because we are still growing. And if we are still growing, we can’t be open to a free market. The free market here is completely misunderstood. Take for example the exchange rate. It is floating in a sense that it is a free market economy,” Matoc said.
Professor Matoc added that those with access to the hard currency have monopolized the economy by turning it into a commodity.
“Among the so-called free marketers. There are few individuals who have some means of having a lot of money and controlling the market. The exchange rate is exactly governed by the U.S dollar. The U.S dollar is now taken as a commodity. It is not the medium of exchange any longer,” he said.
Matoc believed fixing the rate will help to reduce sharp rise in the prices of basic commodities in the markets.
“One unfortunate thing is that the business sector in the market will begin to price their goods according to the rate of the dollar. Even when the goods were bought in 2010, they still fixed them with the current rate of U.S dollar – making the market so expensive for the public to buy the goods,” he said.
South Sudan among other countries in the region has been battling balance of payment problems following continuous budget deficit that pushes the nation to external borrowings.
According to World Bank, The Gross Domestic Product (GDP) of South Sudan as in 2019 was worth 1 billion US dollars in 2019 driven from official data. The GDP value of South Sudan represents less than 0.01 percent of the world economy.