OpEd, Politics

Food subsidy is an economic gamble, not a sustainable solution

By Woja Emmanuel Wani


South Sudan, the world’s youngest country, plagued with challenges since its independence in 2011, after decades of civil war, struggles to build a strong economy to provide for its citizens.

However, one of the ways the government has attempted to alleviate the economic burden on its people is through food subsidies, which may provide temporary relief, but ultimately not a sustainable solution for the country.

Food subsidies are government programs that provide financial assistance to make food more affordable for its citizens. They are often implemented in developing countries, where poverty and food insecurity are prevalent. In South Sudan, where the majority of the population lives below the poverty line, food subsidies are seen as a way to alleviate the burden of high food prices and address food insecurity. However, these subsidies are not a long-term solution and do not address the root causes of the country’s economic struggles.

The first issue with food subsidies in South Sudan is their cost. The government spends a significant portion of its budget on these subsidies, taking away funds that could be used for other essential services such as education, healthcare, and infrastructure. This puts a strain on the economy and limits the government’s ability to invest in long-term solutions that could drive economic growth such as boosting agriculture and supporting local farmers. Additionally, as the population continues to grow, the cost of food subsidies will also increase, further straining the country’s already limited resources.

Moreover, food subsidies in South Sudan are often not targeted towards those who need them most. In most cases, the subsidies benefit urban populations, as they are the ones with access to markets where subsidized food is sold. Rural communities, which make up the majority of the population, are often left out of these programs, as they do not have access to these markets. This means that the most vulnerable and food-insecure populations are not receiving the intended benefits of these subsidies.

Furthermore, food subsidies in South Sudan have led to distortions in the market and have had a negative impact on local farmers. The government often imports food from neighbouring countries like Uganda and Kenya, which is then sold at a lower price through the subsidy program. This has resulted in a decrease in demand for locally produced food, causing many local farmers to struggle to sell their products. In the long run, this will discourage farmers from producing food, leading to a decrease in food production and an increase in food insecurity.

I vividly remember while still working as a news reporter for Juba Monitor Newspaper. In the 2017/2018 budget, the government, through the national oil and gas company, NilePet, imposed subsidies on fuel prices across the country. However, this did not go well due to gross mismanagement, lack of hard currency, a civil war, and increased US sanctions. The government ran out of strategic reserves at the limited fuel storage available.

Similar steps were taken to subsidize food over the years, where prominent businessmen like Ladu Lukak were allocated hard currencies at reasonable rates to import food and sell to locals at a reduced price. However, this also backfired on the government as it eventually ran out of cash to continue financing the subsidized imports.

Another issue with food subsidies is their tendency to create a dependency culture. When people become reliant on subsidized food, they may become less motivated to work, leading to a decrease in productivity. This can have a ripple effect on the economy, ultimately hindering economic growth and development. Additionally, food subsidies can also discourage people from seeking employment opportunities, as they may prefer to rely on the government for assistance. This can result in a decrease in the labour force, further impacting the country’s economic growth.

Moreover, food subsidies are often not sustainable in the long run. The government may not have the financial resources to continue providing subsidies indefinitely, especially if the economy does not grow. When subsidies are suddenly removed, people who have become reliant on them will suffer a significant impact on their food security. This can lead to social and political instability, further hindering economic progress.

In conclusion, while food subsidies may provide temporary relief for South Sudan’s economic problems, they are not a sustainable solution. These subsidies are costly and not targeted towards those who need them most. They have also led to distortions in the market and created a dependency culture. In the long run, they are not sustainable and can have negative impacts on the economy. Instead of relying on short-term solutions like food subsidies, the government should focus on addressing the root causes of the country’s economic struggles, such as creating a safe space for agriculture, providing seeds and farming tools, and investing in education, healthcare, and infrastructure. Only then can South Sudan achieve long-term economic growth and development.

So, in a nutshell, these subsidies won’t work. Even if they do, they won’t last, and their impact on the economy in the long run will be extremely adverse.

We should expect a drastic shoot-up of commodity and fuel prices at the end of these subsidies and be prepared for the worst.

The writer is a multimedia South Sudanese journalist.

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