By John Simon Yokwe Keri
The government of the day is in a deep mess over the economic dilemma. The economic situation is getting worse day after day, and prices in the markets are progressively increasing every week. The population is becoming disappointed, with no improvement since independence.
A question is, ‘What is the problem?’
I guess South Sudan has a number of economists at the level of Ph.D.’s and Masters. The University of Juba School of Economics is the analytical institution for the country’s economy. Are the analysis made there not effective in making some improvements?
The Ministry of Finance and Planning had been repeatedly changing ministers. Why? Simply because those sacked ministers failed to meet the expectations of the public. The minister goes on personal interests, looking into pending approval, and effects their payments on a return. Institution costs are paid as quickly as the beneficiary institutions offer a percentage. All these are now seen as rights, and there are no senses of guilt. It is a bad practice to try to make bribery a legal right. No one should pretend as if they don’t know; everyone knows, but why?
What are the public’s expectations?
Public expectations are fundamental rights that each individual in the country should enjoy. These are the rights of living as a human. These rights are fundamental because they are a must, and it is the obligation of the government to provide them.
Governments are mandated by their constitutions for good governance and the provision of services. Protection of human life and its properties. Protection of the borders of the country and the sovereignty of the country.
Let me just talk about the provision of services.
When I was following the Libyan crisis a long time ago, I was informed that the late President Ghadaffi served his people in a distinct manner. The services that President Ghadaffi and his government provided were totally out of nationalism and greed. Although Libya was poor and most of the population were nomads, his policy of settlement was successful. Every family has an apartment.
President Ghadaffi’s policy on social insurance was to provide a family support packet—a cash deposit into the account of each family—which shows the Libyans their share of the oil revenue.
Since Libya was not an agricultural country, after the death of President Ghadaffi, the Libyan government wished to purchase wheat from Australia and discovered that their order was paid in advance for a thirty-year supply.
The education policies of Libya were free education from primary to university, and the government paid full scholarships for studies abroad for specializations, masters, and PhDs.
Coming to our beloved South Sudan, the land of great abundance, according to the 2009 census, the population is about 12 million, of which 70% are illiterate and have not gone to school. And where 40% are living in urban areas.
Why did the economy mess up?
Let me put my simple and humble opinion: The South Sudan government should not gamble on mastering the economy. A sense of sincerity and acceptance of a lack of knowledge can be helpful. Who and what number of economists are there? Where are the research and studies needed for the improvement of the economy?
South Sudan gained independence from Sudan in 2011. When South Sudan was part of Sudan as a country. The South Sudanese were not vast in many fields, where the national economy was one. Yes, there were South Sudanese working in banks in Sudan, but as what? Economists, accountants, administrators, or else what?
Financing and economy are two different angles of dealing with monitoring policies. Let us imagine what the government is doing—financial or economic.
Many talked of the economy as production—agricultural products, industries—factories producing goods, not taking into account the cost and factors of production itself.
There is another economic aspect that I would like to take into consideration: service provision. In compression with production.
Today’s economy is about services, which have limited risks to inputs and good returns. Think about this.
United Arab Emirates, Bahrain, Kuwait, and Qatar, to mention but a few, don’t cultivate; they have oil as South Sudan does. Their economy is stable because of the provision of services. Someone may say, “They don’t have as many wars as South Sudan,” an element that destroys a country’s economy. Yes, you can be right, but the will to host wars depends, and you can stop it. Why do you want to continue the war, and for how long?
Question on the country’s budget.
Do the parliamentarians really pass the budget with their full knowledge or just to show the population that they are functioning? I am asking this because the Parliament passes the budget twice a year. It is now common for South Sudan to have a budget and then a supplementary budget. For the last period of the Revitalized Peace Agreement, we are on these budgets. Is this normal?
Why do we need a supplementary budget? And what was the budget about? What was the content of the budget? Does the budget serve the population? In terms of services to the people of South Sudan on health, education, agriculture, roads, clean water, housing, electricity, and veterinary Few but to mention.
What is the budget about?
Public servants’ salaries are not paid for six to seven months. The salary increment made after a serious battle between the executive and parliament is a drop in the ocean. My salary for grade three is SSP 152,327, which was about USD 162.252 at the passing of the budget for 2023-2024. Just a few months ago, I received my third salary for the financial year, and now I am getting it at the rate of USD 87.044. I lost my salary by USD 75.208 in a dramatic way, which no one wants to be blamed for. Come on. Where are your economists and the economic reforms you are doing?
Imagine the loss your population is harvesting. And at what cost? This is just because of ignorance and assumptions about being an economist. If this ignorance continues for more than six months, my salary is going to be less than USD 10. Does someone realize what the problem is?
I just mentioned my salary, and in the same way, all civil servants’ salaries go down.
Why are market prices skyrocketing? Someone may say high demand, limited supply, or something else. Goods and services are available in the markets at any time of demand. The problem is from within. The system is not running itself effectively.
The problem is the currency business.
Is it advisable for the government to have its reserve in another nation’s currency? What is that country’s reserve?
The latest USD auction by the Central Bank of South Sudan was at USD 1 = SSP 1,370, and it went well; our central bank got good local currency. What will be the next action? Probably more than this one. What was the last action? It was less than this. So, why does the central bank want to gain? Is there no South Sudanese pound? Is the cost of buying SSP by action less than the cost of buying it printed?
Again, on Parliamentarians, remember that when you passed your national budget, the rate was about 1 USD = SSP 900, and for purposes of foreign trade and revenues in USD, it was calculated on that rate. Now, your national budget has been proven wrong by someone by fixing the new USD rate. Can you tell me if this is the reason for every year’s supplementary budget?
Simple economic concept:
- Demands are unlimited. This is saying there is no satisfaction. One can keep demanding more and more as long as he or she is alive. In the same way, my dear government, this USD auction will not satisfy you since you tested the gains; you will continue on it, and you are only killing your economy—your currency, which is a sample of the sovereignty of your country and the people whom you fought for to be independent and free in their country and live as human beings of first-class citizens and not as marginalized as in old Sudan. I wanted to remind you of the first action: what was the price of USD to SSP? From 2012, it was USD 1 = SSP 18, from USD 1 = SSP 3.16. Now, where did you reach, and are you still preaching economic reform? Please stop killing us.
- The higher the demand, the higher the price. When demand for goods and services is higher, the prices of those goods and services rise. Now you have made the US dollar a commodity demanded in the markets, so the demand for the US dollar is high, which is why the price will continue to rise higher and higher. You will continue as a monopoly with no competition. But no matter what happens, you too need cash. If the players in the market stop buying.
- Demands exceed supply: a situation where demands for goods and services exceed the amount of goods and services supplied in the markets. This situation is the same as your supply of US dollars is not enough for the markets, and this will lead to higher prices for US dollars.
- Supply exceeds demand: a situation where the amount of goods and services in the market exceeds the amount demanded by the consumer. And in this situation, the prices for goods and services will fall as there is enough for everyone and excess. Until the government provides billions of US dollars in the markets, all the banks and businessmen will buy enough, and that is when the price of the US dollar will fall.
- Supply is equal to demand; this is where the amount of goods and services in the markets is equal to the amount demanded by the consumers. In this case, the price will not go higher or fall but will be stable. In this situation, the government has to do studies on the amount of demand in millions of US dollars in the market for a specific time period and what products it wishes to continue in this business. These studies need to be done in horizontal and vertical manners based on time and the market’s seasons.
- Profit = total sale minus total cost; this is the making of profit in the markets. The total cost of the product includes all incurred costs. The total sale is the selling price, which includes all incurred costs and interest. So, profit is interest. My dear government, you might have seen the prices of your US dollar in the market and the prices of goods. When you auctioned at USD 1, the selling price was SSP 1,370, but now, in the so-called black market, USD 1 is cruising to SSP 2000. This is a normal business, but harmful to your people because you devalued their salaries and devalued your own currency, SSP.
Market prices for goods will go higher because the trader buys from you in US dollars at a higher price and they want to maximize their profit—you called it the free market. Does it mean it rises as it wishes? Or your own creation?
I wish I could have a government that listens to its people. A liberator is a person who always fights for the rights of others, not his or her own. The same way he or she left to the bush and made a vow that he or she must liberate his people, fight for them, and become a hero, is when in government, you seek the interest of the people you fought for. This is what I know.
Recommendations:
- Finding reliable sources as the country’s reserve
- Fixed exchange rate for the US dollar
- Civil servant salary calculation at the current rate of the US dollar
- Buying SSP by printing
- Allocation of US dollars for effective services
- Provision of services as a model of economic reform
The author is a concern citizen