S Sudan appoints new finance minister to revive economy

JUBA: 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 oilproducing areas, has severely impacted revenues in South Sudan, the most oil-dependent 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. —AFP