Juba's economic puzzle and the wrong solution

S. Sudan Calls on Region to Save Economy From Collapse

Juba's economic puzzle and the wrong solution
Juba’s economic puzzle and the wrong solution. Overall economy fell by 50%. Up to 70% of government expenditure goes to Security ($210m per month). Oil revenue fell by 75% ($60m per month) and revenue from tax dropped to $40m per month. Definitely, the economy needs an intervention not from poor neighboring countries but from International Financial Institutions.

By Sudan Tribune,

SOUTH Sudanese vice president, James Wani Igga, has called on leaders of the East African regional governments to save his country’s economy from collapse, adding his government was now ready to make peace with the armed opposition faction led by former vice president, Riek Machar.

The country’s second in command has been leading a high level delegation to regional countries, urging for a regional conference in the South Sudanese capital, Juba, as economic downturn bites painfully in the young nation.

The International Monitory Fund (IMF) based on its recent assessment of the dire situation in the country on Wednesday warned that South Sudan’s economy was on the verge of collapse.

In his press statement while in Nairobi to mobilise the regional leaders to act and save South Sudan, vice president James Wani Igga, said it was time to collectively strategize at the regional level on how to tackle his country’s economy.

He conveyed a message for a regional conference to tackle the negative trend in South Sudan, outlining points that he wanted addressed.

“To invite my counterparts in the region, especially Uganda, Kenya and Rwanda to participate in the upcoming conference planned to take place on the 5th and 6th of May 2015 in Juba.”

“The intention is to strategise together with countries of the region over the economic trend in our country,” Igga explained in the press statement copied to Sudan Tribune which he issued on Thursday at Weston Hotel in Nairobi.

It was not clear whether or not Sudan, which transports the South Sudanese oil that Juba depends on by over 90% for its revenue, was prioritized in the regional tour to remedy the economy.

The current civil war which was sparked in December 2013 over reform debates within the ruling Sudan Peoples’ Liberation Movement (SPLM) is blamed for the economic crisis. Oil production has sharply reduced as the rebel group led by former vice-president Riek Machar captured some of the oilfields from forces loyal to South Sudanese president Salva Kiir. This is coupled with sharp fall in global oil prices.

Juba has depleted both its foreign and local currency reserves resulting to acute scarcity of the dollar currency and skyrocketing of the exchange rate in a country which has been depending on import of all sorts of commodities for the past ten years.

In the neighboring Kenya where vice president Igga has come for help to sort out what went wrong in his country, the dollar exchange rate against the South Sudanese pounds (SSP) in forex bureaus in Nairobi has jumped to 16 SSP per a dollar, the worst depreciation in the whole region.

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South Sudan is also the highest in military spending in the region as the government has been trying in vain to crush what it said was a rebellion by forces loyal to the country’s former vice-president.

But Igga said his country was ready to make peace and exert efforts on the recovery of the draining economy, citing their compromises to implement some provisions of the Arusha intraparty agreement.

He said they were ready to reinstate the former vice president and party’s first deputy chairman, Machar, and his colleagues into the previously held positions without charging them for the alleged military coup.

He also called on the members of the former political detainees (FPDs) or G-10 led by Pagan Amum to return home.

Reinstatement of Riek Machar, his deputy Alfred Lado, Taban Deng Gai and all the FPDs. Unfreezing of their assets and accounts. Granting them general amnesty. Announcement of unilateral ceasefire from the side of the government and so on and so forth,” vice-president Igga outlined them in the statement as position of the government to end the war.

His declaration however contradicted previous statements by the party’s acting secretary general, Ann Itto, who said some of the leaders accused would still face charges in court if they returned to Juba.

The vice-president, who previously strongly rejected any move to reinstate Machar to his former positions, said the government was ready to negotiate in good faith in the upcoming round of peace talks in Addis Ababa led by the Intergovernmental Authority on Development (IGAD).