South Sudan

South Sudan Suspends Independence Celebrations Amid Financial Meltdown

South Sudan President Salva Kiir touring Juba recently

South Sudan has deferred its 6th Independence Day celebrations due to “economic challenges,” Chimp Corps report.

The national celebrations are usually held in the Capital Juba every July 9.

Regional leaders usually jet in for the ceremony.

But South Sudan president, Gen Salva Kiir said the financial meltdown being experienced in the war-torn country could not allow government hold the annual function.

“My government and I owe you an explanation as to why for the second year running you will not have a public celebration during this 6th Independence Day,” said Kiir in a statement to the nation on Sunday night.

“We had to make the painful decision for us to only observe this Independence Day in recognition of the reality of the economic challenges our country is facing,” he added.

“We did not feel that it was appropriate to spend whatever little funds we may have to celebrate when our people are hugely affected by the economic crisis that has made it difficult for many people to afford even one meal per day.”

The renewed conflict in South Sudan continues to undermine development gains achieved since independence and worsen the humanitarian situation.

The current conflict has had a significant financial impact on South Sudan with 2015/16 GDP contracting by 6.3 percent.

With oil production disruptions and below-average agriculture production, the economy is expected to contract further in Financial Year 2016/2017, while fiscal and current account deficits will soar, spiraling domestic prices and the parallel market premium.

Poverty

According to the World Bank, extreme poverty rate has increased to 65.9 percent.

Export revenues decreased due to declining oil prices and lower oil production. Oil production is expected to decrease to about 120,000 barrel per day this fiscal year down from 165,000 barrels per day in 2014 and a peak of 350,000 barrels per day before independence in 2011.

Kiir said although the famine, which was declared in some parts of our country, has now been contained, “still thousands of our citizens are under threat” of food insecurity.

He, however, expressed hope that his countrymen would “understand our reasoning and pledge to work with us to return our country to economic recovery and growth.”

The decline in oil revenue has also had a negative impact on macro-budgetary indicators, requiring austere fiscal adjustments.

The current account has deteriorated considerably leading to depreciation of the parallel exchange rate and fueling inflation.

The South Sudanese Pound (SSP) depreciated on the parallel market from SSP 18.5 per dollar in December 2015 to reach almost SSP 80 per dollar by end September, 2016.

South Sudan is now in hyperinflation. The annual inflation increased by 661.3 percent from July 2015 to July 2016 and by 730 percent from August 2015 to August 2016.

Relative prices of food have increased and food shortages and hunger are the most alarming signal of the country’s larger economic collapse.

Rising food prices have put many households in both urban and rural areas in a very difficult position, as they are unable to afford the minimum food basket. According to the Ministry of Finance and Economic Planning (MOFEP), the Central Bank has no reserves and the limited oil and non-oil revenues are spent on defense and security loans.

The incidence of poverty has also worsened, from 44.7 percent in 2011 to 65.9 percent in 2015, with a corresponding increase in the depth of poverty.

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