Rethinking South Sudan economy post-civil war
The Republic of South Sudan has suffered a six year civil war, which has claimed the lives of the 383,000 people, displaced more than four million people and has affected the economy of the country and has led to the low prices of goods and services as well as led to the low Gross Domestic Product (GDP) of the country, from $ 13 billion at the start of the civil war to $ 3 billion as of 2016.
Dr Maluki: To comment on the impact of conflict in South Sudan is that one of the major impacts of the conflict is the major reduction of living in the way that people lead their lives. Why? This is because ordinarily, societies exist to prosper so as to organise their lives and prosper and improve their welfare only with peace and tranquility . In terms of production, people are engaged with more productivity. It is lost in a number of ways in the number of conducive products. You cannot conduct business, suffer from fear and intimidation. What South Sudan has suffered from has really affected it and it sad that its GDP has gone down because when society is in conflict, it tends to affect the harmony of South Sudan.
South Sudanese government recently came up with a 9-month rescue plan meant to reverse the country’s economic fortunes , financed by the World Bank. Inclusive of this deal is the issue of South Sudan debt, to be secured against the country’s oil reserves. What budget deficits have been caused by the 20-year trade sanctions imposed on the South Sudanese government by the United States (U.S.)?
Dr Maluki. We know that Kenya has approved that the Vice-President of Kenya, Mr Kalonzo Musyoka be a mediator of South Sudan war. A major concern of the war is that the war is not helping to make the East African Community (EAC). The 6 year war has prompted the government to merge productivity with economic activities.The South Sudanese government government is trying to look at the various sectors that have been affected adversely, such as in terms of economic inflation, a slow growth of the economy as well as the debt burden of the South Sudan. Oil prices have globally been going down, which have encouraged different competitors to have an oil monopoly. In other words, there has been a vicious cycle due to the instability that was in that country. The sanctions in South Sudan that have made the country to suffer, have prompted the government to come up with its own set of economic resources, such as infrastructures, such as the Lamu Port South Sudan and Ethiopia Transport (Lappset) project, where trade takes place. Under the Comprehensive Peace Agreement (CPA), the South Sudan also has oil reserves through which this oil was transported through, though this has not been easy at times. The pathg to peace has not been easy, though.The government of South Sudan has not been taken through that process.
The East African Community (EAC) Summit for Heads of State that was to be held on the 30th of November 2019, highlighted one of the challenges that the bloc’s secretariat’s suffers from, and some of the countries said to slack on contributions are Burundi and South Sudan. What can be done to encourage co-operation?
Dr Maluki: As a regional institution, there must be good faith for the EAC to meet its obligation. There is no money to cater for the expenses of the member states. Yet, it is important for member sates to be able to meet their contributions, as well as all meet their obligations and welfare through trade. When financial contributions are delayed, EAC Secretariat cannot meet its programmes. Yet, South Sudan has not been able make a statutory contribution nor fulfilled some of its contribution nor fulfilled some of its obligations as required by EAC and the Community has suffered out of this.
What direction do you see South Sudan headed, owing to the long standing war period, which affected oil production and exports in a country whose 95 percent of GDP depend on oil revenues?
Dr Maluki: South Sudan is broke. Part of the reason is the “oil curse in Africa” of oil producing nations. Oil as a resource and instead of using oil for economic prosperity it brings war and conflict It is a big concept defining concept in oil states. Because the oil has brought in more suffering and economic loss that benefits. We had the situation in Angola. We had diamonds and gold We have seen this happen in Nigeria. Nigeria is major oil exporting country but has not really used up oil including the weldfare of its people.The oil has opened, you know, ways of conflict in the station. Because at the heart of Riek Machar and Omar el Bashir, there is the aspect of controlling the state power so that you can be able to manage to manage the oil resources. So, instead of the leaders in South Sudan coming together, to develop the resources that they had, the have chosen to differ and actually completely destroy the benefits that would come from the resources. That is what we call the oil curse. Oil has fuelled the conflict both in South Sudan, such as over the oil wells, and Sudan because the resource was a major income of South Sudan. Sometimes resources could be a disadvantage as opposed to being an advantage and this is what we are saying is for Sudan. It is the oil which has fuelled all this bad blood between Sudan and South Sudan because even at the signing of the Comprehensive Peace Agreement (CPA) there was that feeling. Oil was the main source of revenue for the al Bashir government and that it led to the loss of income for the al Bashir government which was equal to economic sabotage. South Sudan, instead of seeing the advantage that they gained, by having most of the oil wells, also seemed to have its own wells. So the split between Riek Machar and Salva Kiir (leaders in South Sudan) is because of the need to control the oil reserves for the oil resources. Then the situation became worse to the extent of the toppling of the government of Sudan’s President al Bashir.
The Prime Minister of Sudan, Mr Abdalla Hamdok, went to the state of Washington in the United States of America, this December in search of a roadmap to end sanctions against Sudan. What impact does such a move have on states such as South Sudan and international creditors who have links with links wiht South Sudan?
Dr Maluki: With regards to resources and the war on terror, in international relations, quite a number of things, we know that one of the strategies that the USA has employed, is to impose sanctions on entities. The government of Sudan has really been focused on because the USA has always believed that Sudan is a sponsor of international crime and when you put these things together, then resources are affected: which is either freezing of assets or the bank accuont of another organisation of a number of investors, refusing to declare the transfer of American dollars to put control on limits, which also limits their ability to do business, among different groups. And, the moment that you affect business transactions. So there is a lot of things that you see, coming from international players, either the USA or its allies in the contestation as to whetgenr Sudan is a peace loving state or it is a state of international terrorism. So, this perception has a lot of interpretation. Given the fact that Sudan neighbours South Sudan, any economic implication on Sudan has a direct impact on South Sudan as well as other neighbouring countries, such as Uganda and Kenya with regard to how the business environment is. So, I would say that the war on terrorism is faster on the eocnomic environment which has faster the probability of entities, which to do with business in the whole of Africa. And so Sudan and South Sudan are at the center of this negative perception. That in my opinion could explain the impact that it has on companies and multinational entities to do businesses in Africa. Sudan and South Sudan are at the center of this negative perception to do business. That explains some of the things such as debt and economic slowdown that are present in South Sudan.