By Deng Ghai Deng
South Sudan is facing a deepening economic crisis as its currency, the South Sudan pound, has plummeted to unprecedented lows against the US dollar.
The sharp depreciation has exacerbated inflation and triggered widespread hardship across the nation.
As of Wednesday, reports from parallel market currency vendors indicate that one US dollar now fetches an average of 4,000 South Sudan pounds. This marks a major decline in the value of the South Sudan pound in recent weeks, compounding the country’s existing economic woes.
Dr. Abraham Maliet, a senior economic advisor to the government’s economic cluster, has sounded alarm, cautioning that without immediate and decisive action from the Ministry of Finance, the country risks sliding into economic catastrophe.
Maliet stated that while the permanent solution to South Sudan’s economy lies in strengthening security and revitalizing agricultural production, there is a short-term solution, which is an urgent intervention to curb inflation, including effective collection of non-oil revenue and implementing measures to safeguard public funds from misuse.
“Looking at the dollars that come from the oil is not going to be sustainable because the oil itself has become controversial,” Maliet states.
“Therefore, I urge the minister of finance to concentrate very much on the collection of non-oil revenue. The non-oil revenue is abundant, but we are not collecting it right; the system that collects it is not completely competent.”
Maliet pointed out significant deficiencies in revenue collection, attributing them to systemic weaknesses, saying there are companies evading taxes for over a decade, depriving the government of crucial funds.
“There are dollars also, even in nonoil revenue; from import taxes, some people working in the country are paid in dollars, so there is no point in not paying taxes in dollars, which is okay; big companies working in South Sudan sell their goods in dollars. So the dollars are here; it is just the minister organizing a team that will listen to what he says and that is fully accredited to do the job, not a team that has other political ambitions,” Maliet added.
Dr. Maliet emphasized the importance of appointing a competent dedicated and politically neutral team capable to execute the task at hand within the Ministry of Finance and fix revenue collection processes.
The economic hardship stemming from inflation has had a profound impact on South Sudanese families, as noted by Michael Ghai Tong, a resident of Juba.
“The situation has hit the common man hard. Basic food prices have skyrocketed, water costs are up, and transportation fares have become prohibitive. Civil servants, already struggling with low wages, have gone unpaid for nine months.”
The crisis has left many South Sudanese struggling to meet basic needs, raising concerns about social stability amid growing economic despair.
South Sudan, which gained independence in 2011, has been beset by conflict and economic challenges, heavily reliant on oil revenue which itself has fluctuated due to global market dynamics and internal disruptions.
Efforts to stabilize the economy have been hampered by political instability and a volatile security situation, further complicating recovery efforts.
The Ministry of Finance has yet to issue a formal statement regarding the recent developments or outline concrete steps to address the economic downturn.
However, the Central Bank stated on Wednesday, in a statement that it is critically monitoring the market situation and plans to come up with monitory measures to control the forex market.