South Sudan blames economic crisis on conflict, oil woes, and external factors

JUBA – South Sudan’s government is acknowledging its inability to fully implement the 2023/2024 fiscal budget, blaming a combination of economic woes, security challenges, and external factors.

In a statement readout by information minister Michael Makuei Lueth yesterday, the government outlined the difficulties the country faces.

It emphasized the ongoing legacy of internal conflicts.

“The negative impact of the infamous internal conflict in December 2013…remains to this day,” the statement said, stating that the activities of key institutions remain weak.

The statement also highlights the ongoing impact of flooding on oil wells, technical difficulties with pipelines, and threats in the Red Sea hindering oil exports – South Sudan’s primary revenue source.

“The National Revenue Authority is fragile, vulnerable and unable to build in Value Added Tax (VAT) to increase tax proceeds,” the statement reads.

To address the skyrocketing exchange rate and soaring prices, the government stated it “will control the market…to save its citizens from the jaws of opportunists.”

The government outlines plan for “resource mobilization” and fiscal reforms alongside monetary policy tightening by the Bank of South Sudan to stabilize the situation ahead of planned elections in December 2024.

The government’s statement reveals the depth of South Sudan’s economic crisis. While external factors play a role, the focus on internal conflict and institutional weaknesses suggests deeply rooted challenges for the world’s youngest nation.

The decision to intervene in the market indicates growing desperation, although the effectiveness of such measures is often debated by economists.