South Sudan
this week got yet another finance minister as it struggles to halt the free
fall of a war-ravaged economy, but analysts warn prospects are bleak as long as
conflict and corruption go unaddressed.
President
Salva Kiir named Salvatore Garang Mabiordit, a former undersecretary in the
finance ministry, to head the portfolio after sacking Stephen Dhieu Dau on
Tuesday.
“We have
lost the value of our currency… this is a challenge that is ahead of you and you
must see very hard how to get out of this,” Kiir told Garang at his swearing-in
ceremony.
Garang is
the fifth finance minister since the oil-rich nation achieved independence in
2011.
After more
than four years of civil war, the government is broke and hyperinflation —
which peaked at around 500 percent in 2016, decelerating to 155 percent in 2017
— has sent prices soaring.
While at the
start of the conflict in 2013 a US dollar was worth five South Sudanese pounds,
today it is equivalent to 240 South Sudanese pounds.
A
50-kilogramme sack of flour, which cost 120 South Sudanese pounds before the
outbreak of the conflict, is now 7,000 pounds — roughly double the monthly
salary of a senior civil servant.
‘The revenue
is not there’
A drop in
oil prices, combined with conflict in oil-producing areas, has severely
impacted revenues in South Sudan, the most oil-dependant country in the world.
Economists
say that Kiir’s habit of re-shuffling finance ministers has often misfired,
recycling politicians accused of corruption, and failed to address the real
problem.
“If you want
to control the economy, you have to address the spillovers of the war, the
insecurity that results in lack of confidence on the part of the private sector
and development partners,” said Kimo Adiebo, an economics professor at the
University of Juba.
“Most of the
budget has been going to the security sector, more than 50 percent. So even if
you change (ministers) and these other parameters have not been addressed, it
is very difficult to control the economy overnight.”
Oil
production has dropped to about 120,000 barrels a day, from a peak of 350,000
barrels before independence, according to the World Bank.
At the same
time security-related spending has risen, increasing the fiscal deficit and
sending inflation soaring.
Last month,
United Nations agencies in South Sudan warned that 5.3 million people — about
half of the population — were in dire need of food aid.
Economists
told AFP that Dhieu had tried to clean up the finance ministry and clamp down
on corrupt practices, and had stopped issuing money to officials to travel
abroad.
Shortly
before he was fired he suspended a top finance ministry official on suspicion
of embezzling 317 million South Sudanese pounds.
Augustino
Ting Mayay, an analyst with South Sudan’s Sudd Institute thinktank highlighted
the difficulties facing Garang.
“The revenue
that the country needs to operate is not there. You have civil servants not
being paid for months. You have corruption that plagues the economy and the
ministry of petroleum is littered with that,” he told AFP.
Earlier this
month, an investigation by watchdog group The Sentry showed how South Sudan’s
elite was using funds from state oil company, Nile Petroleum Corporation
(Nilepet), to “fund militias responsible for horrific acts of violence” and
enrich themselves.
The probe
revealed that more than $80 million (almost 65 million euros) was paid to
politicians, military officials, government agencies, and companies owned by
politicians and members of their families, for services such as military
transport and logistics to forces implicated in atrocities.
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