South Sudan blames economic crisis on foreign factors

JUBA, MAY 21, 2023 (SUDANS POST) – South Sudan’s central bank on Friday blamed the worsening inflation in the world’s youngest country on multiple external factors including the increase of interest rates by the US Federal Reserve Bank and the Russian invasion of Ukraine.

In a statement, the central bank said that the interest rate hike has made it more expensive for South Sudan to borrow money and also said the war in Ukraine has disrupted global supply chains and pushed up food and energy prices, which has put a strain on South Sudan’s already fragile economy.

“These developments are exacerbated, partly by widening balance of payment gap due to import dependent syndrome, and multiple external factors, such as the hikes of interest rate by the Federal Reserve Bank, global inflationary pressures,” the statement said.

It also said that the economic crisis is being exacerbated by “the geopolitical tensions especially in eastern Europe which has pushed up food and energy prices.”

The statement said that a committee will coordinate with the ministry of finance and planning “to ensure that Treasury Single Account (TSA) is fully and properly implemented in letter and spirit” to “enable BOSS to continue building foreign currency reserves to cushion the economy.”

Last week, the South Sudan Pound, plummeted to its lowest levels since independence from Sudan in 2011.

1 US dollar was traded at 990 South Sudanese Pound in its official rate, while over 1000 in the parallel market.

The world’s youngest country is still recovering from a civil war that ended in 2018, and it is struggling to meet the basic needs of its citizens.

The economic crisis is likely to make it even more difficult for South Sudan to achieve its development goals.