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Roundup: S. Sudan needs urgent reforms in public sector to regain growth

Xinhua, September 21, 2016 Adjust font size:

South Sudan needs to undertake urgent reforms in its public sector to restore its once vibrant economy, which has been battered by more than two years of conflict, toward positive economic growth path, experts have said.

The oil-rich nation was expected to achieve positive economic growth on average of about 40 percent prior to conflict by 2015, according to estimates of the African Development Bank (AfDB). However, negative growth has been registered since outbreak of conflict in December 2013.

The conflict has disrupted the oil revenue to finance 98 percent of the country's fiscal budget after production declined from 350,000 barrels a day (bpd) to less than 160,000 bpd.

This has in return affected the macro-economic stability with inflation reaching a whopping 663.1 percent. Meanwhile, the high exchange rate has seen the South Sudan Pound (SSP) exchange with the U.S. dollar as high as 80 in September from 40 in April.

Lual Deng, director of Ebony Center for Strategic Studies, a Juba-based think tank, told Xinhua Wednesday in Juba that for South Sudan to restore macro-economic stability, there is need to overhaul three key institutions of the central bank, ministry of finance and trade dockets.

"The government should focus on production of public goods like roads, electric power and security that will create an enabling environment for growth and private sector," Deng said.

Economist Alic Garang said the situation was dire and demanded immediate redress.

Garang underscored the need for the central bank to rein in the runaway inflation, replenish its fast dwindling reserves and enforce its laws on the books.

In June, the International Monetary Fund (IMF) advised officials to downsize on the bloated public sector, clean the payroll of ghosts, reform the exchange rate and increase non-oil revenue generation.

"To curtail inflation, government has to devote more time to revenue generation, especially on options that increase revenue in foreign currency terms to achieve currency stability," Garang explained.

Jacob Chol, head of the department of Political Science at Juba University, said there was need to downsize the huge public sector and create meritocracy and effective civil service.

He added that these reforms cannot succeed without funding from the international community. Endit