Maxwell School of Citizenship and Public Affairs, Syracuse University
What you need to know:
The Government of South Sudan has announced that it has run out of foreign reserves.
This was meant to happen, owing to too many malpractices that were born of incompetence, malfeasance and partly due to the huge revenues from oil giving the government the impression that these were limitless, a resource curse perhaps.
For a country that depends entirely on imports, the immediate effect of this will be runaway commodity prices and extreme suffering for the poor millions.
In the meantime, the government has appointed the same people who supervised and aided the mess to help fix it.
On August 18, 2020, the Central Bank of South Sudan announced that it had run out of foreign exchange reserves. This news was greeted with lots of discussions, debates and sharing among South Sudanese in online discussion forums, on social media and at other gatherings. “A central bank is not like the blood bank, you know. It is not like you can do a blood donation campaign when it runs out of blood… Officials at the Central Bank of South Sudan seem to have missed the distinction between the central bank and any other type of bank,” a university of Juba lecturer commented on the news. “For a senior official at the central bank to think it is a normal thing to go on radio and announce that the country is broke is callousness with such sensitive information that should have been considered classified,” said another commentator.
The news, though unsurprising, seems to shock everyone, understandably so, given this will lead to numerous economic challenges that will most likely affect the ordinary population, as they have already been battered by the civil war that started in 2013, and by corruption, the immediate consequences of which include the absence of goods and services. This news was not surprising because the way the bank had been run since it was established in 2005 had always left much to be desired in terms of its ability to be a trusted custodian of the peoples’ resources. There were too many malpractices that were born of incompetence, malfeasance and partly due to the huge revenues from oil giving many people the impression that these were limitless, a resource curse perhaps.
