ECONOMY, S. Sudan tops 2020 fastest growth in Africa

By: Odongo Odoyo and agencies

South Sudan has been ranked among the top ten countries expected to perform and boost economic growth in the year 2020. In the ranking, the International Monetary Fund (IMF) lists the country among the expected performers with 8.2 percent growth immediately followed by Rwanda with 8.1 percent.

According to IMF, an associate of the Bretton Woods Brothers, last year, Africa had some of the world’s fastest-growing economies and 2020 won’t be very different.

A few of the countries on the top ten list may have changed but the IMF, World Bank and other institutions all expected above global average GDP growth.

The top performers will be South Sudan (8.2%), Rwanda (8.1%) Côte d’Ivoire (7.3%), Ethiopia (7.2%), Senegal (6.8%), Benin (6.7%) and Uganda (6.2%) along with Kenya, Mozambique, Niger and Burkina Faso all expecting 6% growth.

While these countries help push up Africa’s overall average economic growth rate forecast to 3.8% (or 3.6% for Sub Saharan Africa), these averages are weighed down closer to the global average (3.4%) by the two largest economies, Nigeria (2.5%) and South Africa (1.1%).

According to economic sources, the South Sudan situation has improved tremendously with the facts that some key players in the oil industry among them locally owned Trinity Energy and the money transfer system program introduced by Trinity Technologies had contributed immensely to the expected growth. The initial queues which formed the better part of the fuel distribution in the country had been greatly reduced and the electronic money transfer used in purchasing fuel and other commodities were clear indication of improved economic growth.

With the on-going peace restoration and assurance of well managed and operated security system investors were showing signs and had created confidence in the expected peace which would result in boosting up investments in the country with collective goals and aims.      

IMF forecasts that in its  Economic  Outlook for Africa has identified South Sudan to be the top performer in Africa, growing by 8.2% in 2020, followed by Rwanda (8.1%), Ivory Coast (7.3%), Ethiopia(7.2%), Senegal (6.8%), Benia (6.7%) and Uganda 7.2%, along-with Kenya, Mozambique, Niger and Burkina Faso all expected to grow at 6%.

It is not a coincidence that South Sudan is going to top the economic index, as 2018 and 2019 have been successful years for the South Sudanese economy as the markets have shown great resilience and indicators of growth are everywhere to be seen. The year 2013 saw South Sudan economy growing by whooping 35%, fastest growing economy in the world. Hence, it is not surprising that the South Sudanese economy will grow exponentially in 2020.

The signs are there everywhere if one drives through the city of Juba, one can see the green shoots of economy blooming. Fashion Stores, Coffees Shops, Restaurants, Boutiques, new hotels, petrol stations etc have been opened up in the last 18 months. Traffic jams are the order of the day. Add to this the City power which has started supplies to every nook and corner of the City, thanks to the US $ 48 Million funding from African Development bank (AFDB). The capacity of the distribution network which was a meager 10 Mega Watt (10MW) has been now upgraded to 140 MW with several feeder lines, sub stations and last mile customer service equipment. Even though the cost of power is very high compared to the region, the very fact that the City shall enjoy stable and continuous power is heart-warming. Kudos goes to South Sudan Electricity Corporation (SSEC) for completing the project within timeframe and commencing supplies. It will be prudent if SSEC invites investment in Solar Power Projects under BOT or PPP model so that the cost of power can be brought down from the current level of US Dollar Cents 45 per Kilo Watt Hour (KwH) to the regional levels ( Uganda – US $ Cents 18 / KwH and Kenya US $ Cents 13/KwH). It is in this context that the City dwellers should be happy that African Export Import Bank (Afrexim Bank) is funding US $ 45 Million for setting up of a Solar Power project by M/s Elswedy from Egypt.

The current team of officials headed by Salvatore Garang Mabiordit, the Minister of Finance & Planning should be given credit for bringing this economic transformation, which we are hopeful, will now percolate to the 14 Million citizens of the country. Take for example; all the arrears of salary for Government staff both at national level as well as the State level have been cleared. Similarly, the several years of arrears for South Sudanese Diplomatic staff in our Embassies abroad have been settled and the New Year is beginning with a clean slate. Also credit goes to the team in the Ministry of Finance & Planning in solving the fuel crisis that dogged the country during 2015, 2016, 2017 and the first quarter of 2018. Since May, 2018 and as of present date, there is abundant fuel supplies, Gone are the days when one has to wait for 4-5 days at petrol stations for filling the tanks. Credit also goes to the Ministry of Finance & Planning for taking several measures to increase the non-oil revenue collection. More than 150 Petrol stations that remained closed during 2015, 2016 and 2017 have now opened, thereby creating tens of thousands of jobs across the country. Each Petrol Station is a small economic eco-system, wherein several bread winners thrive, some making tea / coffee, some selling locally grown vegetables/ pea nuts and others washing boda bodas / cars. The indirect employment thus generated is stupendous. All these measures have ensured that the tax collection as well as Non-Oil revenues have gone up.

With abundant supplies of fuel in petrol stations, the agricultural / fisheries activities across the country have accelerated. For example, the Petrol Station that was opened in Terkeka last year has ensured that more fishermen are going into river Nile with their fishing boats and the farmers are able to pump the water to their agricultural land holdings. Steady and stable availability of fuel as a reasonable rate (SSP 180/190) at wholesale prices, the inflation that was shooting up into the sky in early part of 2018 has been stemmed. Food prices have stabilized and restaurants and super markets slashed their prices by 20-30%. The discipline in the fuel markets is another great achievement of the Government.

The two airport terminals are expected to be opened in the next few months and several international airlines are waiting in the wings to resume services from Juba International airport (Turkey airlines, Emirates, Qatar etc). Under US $ 25 Million funding from African Export Import Bank (Afreximbank) Securiport (a Swiss Security Company) has installed the most modern equipment for Security and they are expected to complete installation of security equipment in the two new terminals in tandem with the completion of work at the brand new airport terminals. Opening of the two brand new airport terminals shall bring in more foreign businesses and resultant investments.

The Central Bank has also come with several Monetary policies that are beneficial to the economy in addition to their proactive role in issuing licenses for mobile money transfer services like “m-GURUSH”, wherein South Sudan is aiming at being a cashless economy thereby contributing enormously to the growth of the economy (it is estimated that introduction of electronic money transfer service like m Gurush, will not only bring transparency, the economy shall grow by an average of 1%)

The reforms introduced by Ministry of Petroleum is quite commendable considering the fact that the full value from sale of crude oil is realized since resuming of global competitive tendering of crude oil cargoes. The Ministry of petroleum team is also striving hard to take the production to 350,000 Barrels Per Day (BPD) in the near future from the current level of 190,000 BPD. It is quite commendable that several wells in Unity State have resumed production in view of the hard work by Oil Operating Companies GPOC and SPOC (operated by Petronas of Malaysia and ONGC of India).

Most of the above facts have been factored by IMF/World Bank before coming with the forecast that South Sudan will the fastest growing economy in Africa. The Government has to engage in bringing in more reforms especially in its Fiscal and Monetary policies, so that the full benefits of the fruits of the economy percolates down to the citizens.

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