Aid freeze worsens South Sudan's economic crisis

By Parach Mach

JUBA, South Sudan

The cash-strapped South Sudanese government has failed to pay the salaries of its civil servants and military since August last as an economic crisis caused by three years of civil war worsens in the country.

Although the government in September had approved a 22.3 billion South Sudanese pound (about $474.7 million) budget for the 2016-17 fiscal year, with plans to fund it by external borrowing and sales of crude, South Sudan’s main donors -- the European Union and the United States -- have withheld aid worth $54 million in April until the government initiated economic reforms to restructure its Central Bank and the Ministry of Finance to reduce wastage and corruption.

Finance Minister Stephen Dhieu Dau told Anadolu Agency salaries had not been paid for months because the government was struggling with getting loans.

“It is a fact that we have revenue challenges and the transitional government is unable to pay salaries due to a donor-freeze on aid and reduction in oil production caused by the war,” Dau said.

He said the government was working out ways to resolve the country’s acute economic crisis amid a rise in cost of living.

Juba-based economist Alic Garang, who does research for the South Sudanese economic think-tank, Ebony Center for Strategies Studies, said the delay in arrears would only worsen the insecurity in the country, sparking further discontent among the people who were already battling the hike in cost of living.

“Without salaries of civil servants and organized forces, including the army, possibility of lawlessness and anarchy are high, many people have guns and won’t allow themselves to starve,” Garang said.

The economy will collapse if the transitional government of national unity does not take proper measures to rescue the ailing economy, Garang warned.

“Policies and new measures should be put in place before the country’s economic collapses,” he added.

Ekilas Ella Tombura, a primary school teacher in Juba, said she had now quit her profession because of nonpayment of salaries. “I have not been paid for the last three months and my children are starving, so I stopped going to school to find another way for them to survive,” Tombura said.

Moreover, she said, prices of basic foodstuffs had soared in local markets, making it even harder for her to provide for her family.

A diplomat from a Western country, who requested anonymity due to restrictions on talking to the media, blamed South Sudan’s financial bankruptcy on rampant greed and corruption. “Donor countries will not commit their funding to the government that is not serving the interest of its people; [when there’s] so much corruption and misuse of donors’ money, there is a need of institutional reforms to give room for accountability,” he said.

The diplomat also said international support had not yet come forth, owing to the lack of political will to implement the peace agreement by the parties.

South Sudan’s conflict that began in December 2013 has left tens of thousands of people dead, forcing over a million to flee to neighboring countries and has plunged an economy with sub-Saharan Africa’s third-largest oil reserve into crisis.

The global oil prices also dipped from $115 to $46 per barrel, seriously affecting the country’s net oil revenues, as production also dropped from 350,000 barrels to 160,000 barrels per day during the civil war.