South Sudan Ministry of Finance must fix the economy BY: Isaiah Abraham, JUBA, RSS
MAY 6/2012, SSN; Despite political and military problems facing South Sudan, the economy must not be left behind. There are certain things to be ignored but not the economy (say Macroeconomic). It is anything and on everything. A responsible leadership therefore will always ensure against rundown of the economy, by being proactive on a given intruding economic challenge. Indicators on the economy inform decision makers on the courses of action. Broadly speaking, two considerations underlie macroeconomic policy recommendations. First, there is need to do an assessment of the appropriate policy stance to adopt in a given set of circumstances; that is, should fiscal or monetary policy be tighten or loosened> Second, the choice must be made of the specific macroeconomic policy instruments that would be beneficial for a country to adopt. Adjusting a policy strategy is often done via the adoption of a new instrument or the modification of an existing one. We never did any of the above. We were somewhere by allowing forces of demand and supply to play it out. But the reality of an emerging economy is that it has to be nursed and nudged until at a certain stage. It has to be regulated, that is what it means here. Any economic policy taken however by the government must fit into country's particular situation, which will fall into one of the three classes, namely: instability economy, stability economy and growth economy. Everyone thought since we were at instability stage caused by exogenous shocks and inappropriate policies we should have applied instruments befitting our stage, alas, that was never the case. For starters, exogenous shock is about trade shocks, like stringent policies, closure of borders, natural disasters, reversal in capital flow, or any other trade barrier you can think of. Stability on the other hand is still ahead of us, and this a situation where we have jumped, which is all about rapid and sustained growth aimed at poverty reduction. We were thinking of leaping to this stage when we never had solid ground as to policies, standards and practices that are geared towards growth. The job is for a sitting government. I have no time talking about growth, the climax of where anyone wants to be when it comes to money. At our situation, especially after oil shut down, the government of the Republic of South Sudan behaves as if nothing is happening out there. Our government can’t be run that way and expect anything to be delivered. In a few words, we are heading to an economic abyss unless the ministry of Finance turn things around before the economy gets the nose down (already we're there anyway). We are talking here about basic things around macroeconomic (just begin touching a few of them), some of which I have cited on introduction earlier. Issues if not handled decisively and on time can pose a real economic meltdown to national prescribed goals, objectives and mission. Take for example the inflation (something address in an instability stage), a situation that is cause by a rise in prices and wages due to increase in the money demand and supply for goods resulting in the fall of in the value of money. In another word, South Sudan Pound will chase few dollars anywhere, and in the process the prices shall continue to sky rocketing, until we deplete our money stock and return to reprinting. Exactly this is where we are heading at the moment because the oil gap hasn’t been closed yet, and no one in Juba cares. This is a serious matter, an elementary person or political layman could have given it a deserved attention. Someone must rescue our economic situation before it gets worse. This doesn't need a presidential decree but a daring nationalist who can take the 'bull' by the horn. Chances of the resumption of oil production are increasingly getting slimmer anytime. Kiir team have promised our people and often the same people return with another promise. Four months down the line and no single mobile refinery is up as promised by the Information Minister. No wonder they are not getting it right that no one wants to invest in an environment full of political sharks where money goes to the drain. Corruption has dented this government and nothing will erase come generations. There is ‘wait’ and ‘see’ attitude from the rich except a few adventures such as Chinese. The Ministry of Finance must demonstrate leadership and do something about our falling pound. Our currency (SSP) has been on the top among many in the whole of Africa against United States dollar, but that has fairly in the past tense, starting from September last year. I must stray to this old man at the bank called Cornelio Koryom, the governor of the Central Bank (South Sudan). He has made others so rich overnight by blowing away so much dollars in the reserve to individuals connected to the power on the expense of the public. Exchange Banks/Centers (Forexes) have done little to help businesses to move to stability stage. No one checks their operations to be exact, once they filled up forms with the Central Bank. Even today the Centers are still hoarding our Central Bank with hard currencies, the very money that could have helped traders to buy commodities out there. There is a game going on right now where culprits at Exchange Centers colluded with few traders so to divide the spoils. The Ministry of Finance hence ought to clamp down on crook individuals that are misusing opportunities to enrich a few. That written documentation must be respected and upheld. The Bank Governor has failed the people at a crucial time like this. Some people close to who is who have no worry about dollar scarcity because the Bank Governor is easily reachable to tap it to them through ink of his blue pen anywhere even in his own residential home in Juba. I felt bad the other day while passing through a huge queue of bread buyers around Gudele. This tells you that there is rise in the price of a bag of flour. Long queue on fuel especially patrol but also now diesel. The minister should take a walk and check out in Suok Hajer, Konyokonyo, Souk Libya Markets in Juba the rise of prices of essential commodities. Something is wrong and that thing is the absence of dollars to traders. The forces of demand overshot that of supply because dollar was wasted by the Bank Governor. The Government must borrow money!!! Capital flight is another major economic threat the minister must find a solution. How come that foreigners bank away hard currency with no government stopping them? This is an insult to our conscience. How come that messengers from different countries turn millionaires in our land, while people around are still queuing for bread. Many mushrooming hotels are wiring back money like nothing and nothing in return goes to the people who are actually owners of the land. I doubt whether they really pay taxes and, if yes then Central Equatoria is a ‘patron’ meaning 'rich.' Eritreans, Ethiopians, Ugandans and Kenyans are becoming aggressive. They must be halted. The government must empower our local entrepreneurs, but not the way Mr. Koryom is doing it by being selective. We are at a disequilibrium economy that requires tight policies. Banks owned by Southerners are to come up, and flood gates of loans to go to our own business men and women. I see governments of foreigners behind their business people here but unfortunately our government is doing little if any for our young business people. Even foreign banks ought to give our people space by employing our own. That cry has always fallen on deaf ears of the Chief Executive of foreign banks, but the minister can impose it willy-nilly. Ministry of Labor, Public Service and Human Resource Development should also do something about wages of civil servants since standard of living have been compromised. Salary increment is an option! We need money to circulate from within and not to build foreign lands. Hon. Manibe must not sit back and wait from the State House; there is nothing there by the way! I saw that man wasting our country and nationalists must watch this space in 2015. In the Ministry of Finance and Economic Planning, there are dead woods in Taxation Unit, Procurement Unit and even the Undersecretary for Finance is to go. Being in that position for over six years alone is a problem that could make this servant to go elsewhere. In his watch, there were scandals one after another; and ministers come and go, and he remains, what is special about him? Though the post falls under jurisprudence of the President, the Minister has a strong say to about his team he wanted to work with. That is another economy issue that contributes to economic slowdown, yeah? Mr. Minister, where does the money for consumption tax (VAT for example, excise tax, international trade tax, personal income tax, corporate tax etc go? Who follows up Auditors Reports related to Procurement anomalies for the Year 2006? Some of the same faces are still around and the question is why? How about the Undersecretary, when will the government account him for the over hyper expenditure each passing year? Recall Ministry of Finance closes the year with over 400-500% percent, isn’t that an abuse? The Minister should rise above party loyalty and serve the people of this republic faithfully. He needs a capable team around him so save our economy from collapsing. Economy isn’t politics but the two go hand in hand. If politics is stable there must be behind it a strong economy. Our country to get on well, our people ought to try hard to build first the economy, because a hungry man/woman is an angry one. Khartoum next door is an example through which we can borrow a leaf of how volatile is the politics when the economy is in trouble. The government quickly moved to calm nerves of the Sudanese people about oil by fixing the damage on Panthou oil facilities. They are now pumping our oil before our watch. We have lost Panthou due to poor handling by Mr. Kiir and the economy must not also be lost again. The ball is squarely with the Minister to figure out remedies by asking himself this question: how will the economy of this country look like in few months/years to come? Consumers will cry against the personality of Hon. Kosti Manibe Ngai if he becomes like his boss, who decides now and changes an hour later. Isaiah Abraham lives in Juba; [email protected] -- You received this message because you are subscribed to the Google Groups "South Sudan Info - The Kob" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. 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