South Sudan has one of the highest inflation rates in the world: 55% in one year, according to the International Monetary Fund (IMF). This is the consequence of the deep economic crisis experienced by this country ravaged by climate change and instability, and which imports almost everything it consumes. Its only source of foreign exchange comes from oil exports, but since March this year the pipeline has been at a standstill. Despite announcements of an imminent resumption of exports, the situation highlights the need for diversification of the economy, notes RFI.
The South Sudanese pound has lost four times its value against the dollar. Consequence: the price of basic necessities soars. The government announced in September the sale of food products at subsidized prices, and the Central Bank injected dollars into the currency market.
More than 90% of the country’s own revenues depend on oil exports, which are done via two pipelines that transport South Sudanese crude to Port Sudan, on the Red Sea. However, since March this year, the pipeline transporting 70% of the oil has been stopped because of the war raging in Sudan.
If the Ministry of Oil has announced the imminent resumption of exports, the president of the Central Equatoria State Chamber of Commerce also observes the limits of the measures taken to control inflation.
A diversification of the economy is all the more desirable given the uncertainty surrounding the resumption of oil exports, as Daniel Akech Thiong of the International Crisis Group (ICG) points out: “If the parties to the conflict in Sudan do not conclude If there is no ceasefire in the areas along the pipeline route, the scenario that led to the shutdown of the pipeline risks repeating itself. » The fall in the price of oil and sluggish global demand are also working against South Sudanese public finances, which are more than 90% dependent on black gold.
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