Page 16 - Nile Explorer Issue 007

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accord and power sharing agreement coming down to 187.87 percent in 2017, the general population alongside taking
between Preident Salv Kiir and Riek 83.49 percent in 2018 and a low of 24. steps to end the endemic corruption
Machar and other rebel groups to end 47 percent in 2019. This being a clear within the country.
the country’s civil war. This is informed indication that fiscal microeconomic More importantly, when dealing with
by the realization that government and macroeconomic discipline is the the country’s challenges and making
needs money to finance services and way to go for the new government. policies to address them, the new
invest in development. If President Kiir becomes successful in government should think long-term,
Indeed, additional oil revenues should reorganizing the economy, the military with strategies devoid of personal inter-
enable government to increase spending and pacifies the political divide, particu- est or partisan positions.
towards poverty reduction, education, larly the key actors like Machar, this Meanwhile, the country’s economic
health and social services and humani- would convince investors and business- recovery could further be complicated
tarian assistance. es to risk a return. by the anticipated global economic

Since August 2019, South Sudan has The IMF forecasts South Sudan’s GDP recession in light of the corona virus
made a discovery in the Adar oil fields in to grow 8.1 percent in 2019/20 and 6.6 pandemic, a situation that will affect
Block 3, containing more than 37 percent in 2020/21, this is predicated on budgetary support by donors.
million of discoverable oil. the sustenance of peace and stability. A decline in the demand for oil, and the
The economy of South Sudan is one of In July 2019, Finance Minister, Salva- consequent fall in oil prices would
the world weakest and most underde- tore Garang Mabiordit unveiled a compound the situation for South
veloped and has little infrastructure, 208.16 billion South Sudanese pound Sudan. Oil prices could fall under $20 a
with only 10,000 kilometer of paved budget($ 1.6 billion) up from 2018/19’s barrel if the world’s leading producers
roads. Most villages have not electricity SSP 81.6 billion($ 620million with a fail to reach an agreement on reducing
or running water. deficit SSP 77 billion($590 million. The output, oil market strategists have
Moreover, additional oil revenues latter budget was criticized by IMF as advised.
would persuade the government to stick unsustainable and had paralyzed The pandemic has played a critical role
to its policy of not printing mon- government services. in the price decline, but there is also a lot
ey—borrowing from Central Bank—ac- Mixed signals from the two top men of jockeying among the three oil super
cordingly being able to control inflation would suggest conflict could erupt powers: Saudi Arabia, and Russia, the
and exchange rate, leading to gradual anytime, just as a tense and uptight two longtime petrol rivals, and the
macro-economic stability in the coun- military presence in the capital would United States, whose rising prominence
try. signal a dark cloud over the country, as an oil exporter has disrupted the
Inflation in the country has averaged 89 thereby keeping business and invest- industry. •
percent over the past 10 years, surging ment away.
to a peak of 379.85 percent in 2016, Moreover, the new government will
need to attempt reconciliation among
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