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.
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 oil-producing areas, has severely impacted revenues in South Sudan, the most oil-dependant 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.
Last month, United Nations agencies in South Sudan warned that 5.3 million people — about half of the population — were in dire need of food aid.
Economists told AFP that Dhieu had tried to clean up the finance ministry and clamp down on corrupt practices, and had stopped issuing money to officials to travel abroad.
Shortly before he was fired he suspended a top finance ministry official on suspicion of embezzling 317 million South Sudanese pounds.
Augustino Ting Mayay, an analyst with South Sudan’s Sudd Institute thinktank highlighted the difficulties facing Garang.
“The revenue that the country needs to operate is not there. You have civil servants not being paid for months. You have corruption that plagues the economy and the ministry of petroleum is littered with that,” he told AFP.
Earlier this month, an investigation by watchdog group The Sentry showed how South Sudan’s elite was using funds from state oil company, Nile Petroleum Corporation (Nilepet), to “fund militias responsible for horrific acts of violence” and enrich themselves.
The probe revealed that more than $80 million (almost 65 million euros) was paid to politicians, military officials, government agencies, and companies owned by politicians and members of their families, for services such as military transport and logistics to forces implicated in atrocities.