Understanding the prevailing economic crisis and the imperative of the permanent constitution for South Sudan

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Understanding the prevailing economic crisis and the imperative of the permanent constitution for South Sudan
Understanding the prevailing economic crisis and the imperative of the permanent constitution for South Sudan

Oyet Nathaniel Pierino

Africa-Press – South-Sudan. The prevailing economic situation is Man made and self-inflicted. It is the failure to balance between the national interest of providing goods and services for the citizens and maintaining the state capture by private/group individuals. This is an “economic trap” in which economic growth can’t be achieved or go beyond a certain level since this must affect the private income of those who control the economy and resources.

The US Dollars is controlled by individuals rather than by the government this is why the economy is experiencing a running inflation. From the lifting of crude oil to the use of the Dollar income, South Sudan has lost control over its valuable resources.

The so-called “failure to execute the FY2023/2024 budget satisfactorily” is the failure to balance this mutually exclusive relationship and interest between the state of South Sudan and private entrepreneurs. You cannot satisfy both masters. They are mutually exclusive. Given the scarce and inelastic resources.

The oil revenue in FY2022/2023 budget accrued to South Sudan (170,000 barrels per day, by 30 days and by 12 months) multiplied by the benchmark price of 81 US Dollars. It shall give the ministry of finance 4.9572 bn USD, a year, assuming that the Cost Oil takes half of the Gross Oil Revenue, 2.4786 bn USD, shall be the Net Oil revenue. While None Oil Revenue stood at 240 million dollars a year.

Oil pre-sale to 2027 has no tangible effect because every FY budget has a Debt servicing section. (Compulsory Amortization) It’s not that the entire production is given to the Creditors. South Sudan should therefore comfortably pay for all her expenses including implementation of the Peace Agreement. Moreover, the total value of FY Budget utmost stands at 1.8bn US Dollar.

The idea that South Sudan lacks resources is fiction. With speculation for elections the situation is expected to worsen as most of the companies and individuals controlling the economy are directly or indirectly linked to the centre of decision making or influence in the country. There’s an urgent need to mobilize resources and divert the same to finance electoral campaigns. The ministry of finance is the only available avenue to mobilize such resources.

The real issue is the management of the economy. The management is not by the Ministry of Finance but the invisible hands and companies that are embedded in the economy. This is how devastating state capture can be, just in one sector.

It is imperative and a necessity that the people-led Permanent Constitution making process be implemented, to restructure the system of government, and resources control, define the nature of the state and assert the sovereignty of the people to take charge of their affairs. 2011, John Luk Constitution has led to a situation of over centralization of powers and resources in the central government leading to misappropriation of resources with impunity.

For those who fear this process of self-determination by the people of South Sudan are benefiting from the unattainable status quo.

 

Source: Sudans Post

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