President Kiir’s 3 Main Strategies to resuscitate the economy, will they deliver?

Oct 14, 2020(Nyamilepedia) — In response to deteriorating economy, South Sudan president Salva Kiir, who addressed the cabinet this afternoon in Juba, outlined his major plans to revive an economy that is currently struggling at its lowest since independence.

In the latest statement issued to media a few hours ago, President Salva Kiir plans to restore the economy came as follow:

Denying the claims,

The President has denied the claims that South Sudan is changing its currency, saying it was a proposal that was tabled in one of the previous meetings but was never discussed or approved.

“At the beginning of the session, President Salva Kiir questioned the Council of Ministers, why an announcement of currency change was made to the public last Friday yet it was not part of the agenda and resolutions of the previous cabinet meeting.” Read part of a statement released to the media by the office of President Kiir.

“President Salva Kiir and some members of the cabinet mentioned that, the change of the country’s currency was brought up in the discussion of previous cabinet meeting as one of the proposed ideas to be subjected for study and discussions as one of the long-term economic measures but it was not agreed and passed by the council that time.” The statement added.

“President Salva Kiir made assurance in the cabinet meeting that the government did not and has not agreed to change the currency of the country, but instead it was a suggestion, a proposed idea to be studied by the economists.” the statement added.

It is not clear to public who is telling the truth between the president and the minister of information, and why it took that long to deny the announcement that was made to public on the national television; however, this could restore some trust in the market as those who were hoarding money can now keep their money at home and continue to spend it as they wish.

Injecting loans and oil money into the market 

Given the desperation for dollars, the South Sudanese president promised to acquire loans that would be injected into the market to stabilize the currency rates.

“President Salva Kiir and the government is in a final process of acquiring a loan that will be injected in the market to stabilize the currency rates.” The statement from Salva Kiir office pledged.

In addition, the president has promised to divert and inject the oil revenue into the market to restore and stabilize it further.

“In addition, the Council of Ministers meeting also agreed to divert and inject the oil money into the market to help in the stabilisation of the market.” The president promises.

According to economic analysts, while these could temporarily revive the economy, if fulfilled, such a decision will not come to pass without major consequences both in the short run and also in the long run.

In the short-run, if the loans and oil money are injected into the market, the implementation of the peace agreement and payment of salaries could be paused, and that may only shift the crisis from point A to point B.

In the long-run, the loans that would be injected into the market will be depleted as many foreigners workers, businesses and government officials send hard currencies to foreign countries where it is spent and circulated.

In a few months or years, the economy would crumble again and the government may have to recycle the same cycle over and over, and that would leave the country in more debts and crises.

Engaging the business Community

As part of the plan to rebuild confidence in the business community and investors, President Kiir has instructed the Minister of Trade and Industry to engage the business entities in the country to hear their grievances.

“The Minister of Trade and Industry was directed to engage the business community to hear their grievances on the matter.” Read part of the statement released by the Ministry of information and Broadcasting.

Earlier reports, however, indicate that the Minister of Trade, Hon. Kuol Athian, is aware of the grievances and has given up trying.

In September, Hon. Kuol Athian announced publicly that the government has failed to control the market and encouraged corporate societies to try their best to control the black market.

“Currently, we are not able now to control the market. We are completely powerless. We cannot regulate the market to solve this problem,” Kuol Athian told the parliamentarians on Thursday.

“We want to encourage corporate societies to control the black market, we want to encourage them to buy local products because there are so many local products in South Sudan needed in other countries,” Hon. Athian suggested.

He  also encouraged the bee farmers to increase production of honey and see if they can sell the surplus to countries like Japan.

“The Japanese ambassador came to us and said they need a big quantity of honey. There is another company in Juba producing honey. We want to encourage them to buy big quantities of honey. If this corona stops, the business people will come and buy honey. Honey will bring hard currency which will come through the central bank,” Hon Athian continued.

The Central has also borrowed more than $100 millions from the commercials bank and failed to pay.

On the other hand, the business community blames the government for failing to control the black market and also for failing to repay its loans.