South Sudan: a false start
<
http://www.opendemocracy.net/author/dr-lam-akol> Dr Lam Akol , 18 July
2012
For all the Government of South Sudan's rhetoric, real investment in the
country's future has been slow to begin. Even before independence, there
were sufficient resources to truly begin building the nation, resources that
were squandered in Juba.
Aggrey Tisa Sabuni's article
<
http://www.opendemocracy.net/opensecurity/aggrey-tisa-sabuni/south-sudan-bu
ilding-foundations-of-world%E2%80%99s-newest-nation> South Sudan: building
the foundations of the world's newest state, gives the impression that the
building of South Sudan started with its independence on the 9th of July
last year. Nothing could be further from the truth. Since the beginning of
the implementation of the Comprehensive Peace Agreement in July 2005, South
Sudan was, for all practical purposes, fully autonomous economically and
politically. It ran its own affairs and enjoyed freedom of action.
Financially, it had a more than 50% share of the revenue of oil extracted in
the South, foreign grants, money from the Multi-Donor Trust Fund and funds
voted to it from the national budget. Added to this is the internally
generated revenue in South Sudan. It was also free to borrow money from
banks, local and foreign. The revenue from oil alone amounted to about 3
billion US dollars annually (including the 2% for the oil-producing Unity
and Upper Nile States) for the entire six years interim period preceding the
referendum on Self-Determination. These are enormous resources. They were
sufficient to set building the foundations of South Sudan on course. The
money was squandered in Juba and the population saw nothing of it in terms
of basic services and improved security; a missed opportunity.
As is well known, oil as a resource is problematic: not only do its prices
fluctuate considerably but it is also non-renewable and exhaustible. Relying
on it as the sole resource is the surest way to economic uncertainty. Common
sense would dictate that oil resources, while they last, should be used to
develop important sectors of the economy that are essential and sustainable
for the development of South Sudan, especially agriculture. However, this
was exactly the course of action that the SPLM-controlled government in
South Sudan eschewed from 2005 up until it shut down oil production last
January, six months after independence. South Sudan boasts no industry and
no private sector of any kind. What economy are we talking about? If South
Sudan had invested oil money in agriculture, both plant and animal, it would
have achieved self-sufficiency in food well before 2009 and would have
simultaneously started agro-industry, such as sugar and other food
industries, tanneries, etc. No country can develop without a viable
industry.
It must also be underlined that agriculture in South Sudan is not
modernized; it is still traditional and fully rain-fed. A lot needs to be
done in order to improve production and increase productivity. What Sabuni
presents as "not insubstantial achievements" - the rise in non-oil revenue
of 250 per cent since July 2011 - could have been achieved in 2006 or 2007
at the latest. This is an insubstantial chunk of the budget, it is only
raising the non-oil revenue to just 5 percent of the budget! How do you
cover the remaining 95 percent? It is mind-boggling how with oil revenue
unavailable the government in Juba would get the money to run its "austerity
programme" without borrowing money. In fact, after closing down oil
production, the country has been borrowing money against the oil underground
which does not augur well for future generations.
Sabuni is absolutely right when he averred that "Being the world's newest
country affords us one clear advantage in this respect: we can learn from
the past mistakes of other countries." The question is: did they learn
anything from those mistakes? Not at all. They slid into the same beaten
path most African countries traversed: rocketing inflation, total reliance
on imported goods including food, insatiable lust for foreign aid and
corruption - a word Sabuni could not dare mention in his article. Today,
more than half the population needs food aid and the World Bank has warned
of an economic calamity if nothing changes soon. By October, Juba may not be
able to pay its employees.
One would expect a newly born state like South Sudan to use its resources
judiciously before seeking assistance from others. What we saw and still see
is a government on a spending spree. The calls from the opposition since
2010 for a lean government after independence were contemptuously dismissed.
Now, South Sudan has a government, apart from the President and Vice
President, of 56 ministers and Deputy ministers; six Presidential Advisors;
two chambers of Parliament of too many members (one composed of 50 appointed
members and the other with 332 members, 49 percent of whom were appointed);
21 Chairpersons of National Commissions and a huge civil service. Sabuni
himself was until recently one of two Under Secretaries in one ministry. In
the Foreign Service, 91 ambassadors were appointed for a population of less
than 9 million souls. Compare this with Kenya's about 60 and Zimbabwe's less
than 40 ambassadors. These countries have been independent for 50 and 32
years, respectively, and hence would be expected to have established
relations with more countries than a newly born state would have.
In terms of pay, a minister in South Sudan, for instance, receives an
emolument in excess of 30,000 SSP monthly excluding other services and
perks, which is a staggering 100 times (or 10,000 percent) more than what an
SPLA soldier gets. Most developing countries are careful that the pay of the
highest paid government officials should not be far in excess of the minimum
pay. The huge government in South Sudan is not by accident, it is a
reflection of the distribution of patronage and clientelism in the ruling
party. No austerity measures will reverse that trend. This also appears to
be the biggest obstacle against fighting corruption, rhetoric
notwithstanding.
Let us take an example of how the priorities of the Government of South
Sudan are totally reversed. According to the 2011 budget figures, health and
education all over the country received 3.8 and 5.6 percent of the budget
respectively, compared to 3.7 and 5.1 per cent in 2010 (both ministries
received less than 10 percent of the whole budget over those two years). In
contrast, the Office of the President received 6.6 percent of the budget in
2010 and 4.8 percent in 2011. In other words, the Office of the President
has received more than what went for health in the two years considered, and
only marginally less than the share of education in 2011.
Another area of concern is the overspending of all ministries over and above
their budget allocations. A cursory look at the 2005 and 2006 audit reports,
the only two carried out so far, reveals how some ministries have spent in
excess of up to almost 2000 per cent of their budgets. These audit reports
also contain very worrying revelations such as outright embezzlement and
some government institutions refusing to be audited.
The biggest malaise of South Sudan's economy, all agree, remains what Sabuni
chose to ignore: rampant corruption. There can be no way "to continue laying
the foundations for long term economic prosperity" - as Sabuni puts it -
when corruption in the high echelons of government continue to eat into our
meagre resources. In addition to its crippling effect internally, corruption
has caused foreign donors to be reluctant in giving more aid money.
Regarding the difficult talks with Khartoum, could it be that "their
unwillingness to compromise" is based on the knowledge that South Sudan has
little options given its single resource "economy"?
The "South Sudan Development Plan" mentioned by the author, was not heard of
before the 9th of July 2012. What it is and for how many years, none other
than the government seems to know. A national plan cannot be discussed
behind closed doors; it is a matter for the whole nation to debate. It must
be discussed by both the Government and the Opposition, and also by the
civil society and other stakeholders, if it is meant to last for any
reasonable length of time and for it to deserve being termed a plan. How
come it was so shrouded in secrecy?
One would agree with Sabuni that "the foundations are the first step in
building a strong and resilient nation". But all the indications are that
the foundations of the newly born South Sudan were laid not on rock but on
sand. The challenges are not only economic; good governance with its six
pillars calls for action. South Sudanese of all hues and colours need to
return to the drawing board to get things right. The country's independence
will not be consummated until it enjoys good governance and attains economic
self-reliance.
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Received on Wed Jul 18 2012 - 18:05:53 EDT
