Reasons for the Devaluation of the South Sudanese Pound (Analysis)

Until the declaration of the Austerity Measures in 2012 by the government of the Republic of South Sudan, South Sudan was named as the third largest sub-Sahara country interim of huge oil reserves, it is also on record that the Republic of South Sudan ranks number five on the Africa oil index. So at this critical point, South Sudan is a country rich in oil with which almost 75 % of the world rely on, which will make it self-reliance interim of hard currency, it also export timbers wood although it contribute little to the national economy compared to the oil which provides the South Sudan economy with 97.5 % of the total national budget.

In respect to the International development and financial assistance to Africa, international aid flow to South Sudan increased starting from 2008 till the crisis in 2013. It is filed that in 2010 beginning from 2008, the financial assistance to South Sudan jump rapidly from US $ 696.5 million to US $ 1.3 billion with in this two consecutive years. So, until 2011 since 2008 through 9, and 10, the official financial development reached 3.8 billion United State Dollar.

Then when South Sudan is rich in all these, the question will be, why the government through the minister of finance and economic planning Aggrey Tisa Sabuni and the governor of central bank of South Sudan Kornelio koryom want to devalue the South Sudanese Pound (SSP) against United State Dollar (USD) from 2.96 SSP to 4.50 SSP? Or do they (Aggrey Tisa and Konelio) consider it as a political ambition for them they deserve to achieve? How will the legacy of these two men look like after all these attempts? And or is it an economic threat from the current conflict to the nation to must have its currency devalued?

But now it is too mysterious whether the devaluation of the currency is attributed to the current conflict inflicted on the nation by them ( government )now active in the country since it is not the first time for these two men the minister and the governor to rush to the proposal of devaluation of the currency. On Thursday which was by then the 19th of September 2013, Mr Kornelio Koryom who was and the current governor of the central bank of South Sudan wrote a letter to the president and parliament as well acknowledging them for the devaluation of the SSP which he has already declared and in force already. Inside that letter, the governor stated that with effect from now, the official price for the USD is 4.50 SSP/ 1 Dollar but did face criticism from the parliamentarians and within short period of time he lifted the devaluation.

Repeating what he had done with assistant plans from the minister , kornelio now has wrote a letter to president Kiir requesting him to approve the devaluation of the national currency after heated controversial debate in parliament in which he was backpedalled by the law makers in the country.

In fact the South Sudan’s Salva Kiir-led government has vandalised the national economy, the current conflict which did emerge out of Juba massacre has wreckage the South Sudan’s richest economy but it is not a natural calamity nor it was an external aggression and in fact that has resulted in to this disastrous economic hardship and has imposed radical setbacks to the nation’s already ruined economic progress. The country’s security sector has dilapidate almost the country’s 2014/2015 fiscal budget, the bargaining of foreign forces like the UPDF and the Sudanese Revolutionary Front as well as bribing international legal experts and organisations to help the government sell its controversial coup narrative cost the government almost US $ 4.92 million daily only on the national security sector. This entitle the UPDF to US $ 1.12 million, SRF US $ 0.70 million, and the SPLA-Juba US $ 3.1 million on daily basis. So at this point the government ‘s prodigality of the national resource lack the sustainable development policy because the South Sudan’s children of tomorrow the next generation is left in a ruined economic hardship which is must for them to face if the current economic setbacks are still being imposed by the government continue.

According to 2008 census, the population of South Sudan was put at 8 million people which mean the resources that today exist in the country and the oil in particular is twice more than the population of South Sudan and if ambitious leaders emerge in power, this mayhem Republic of South Sudan would be twice better than the former Gadaffi Libya.

The intransigency of President Salva Kiir for pursuing self-interest if not halted will drag the nation in to serious economic plug out.

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