Why investors shun South Sudan

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By AGGREY MUTAMBO
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South Sudan’s new policy to raise permit fees amid renewed violence could further curtail the country’s economic growth, an African Union team monitoring the country’s peace agreement say.

At a plenary meeting of the Joint Monitoring and Evaluation Commission (JMEC), chairman Festus Mogae reprimanded South Sudan President Salva Kiir and his nemesis Riek Machar for failing to rein in their lieutenants to respect the agreement.

But the former Botswana leader also warned that new permit fees could further discourage any useful workforce and curtail humanitarian assistance to a country already crippled with illiteracy, poverty and hunger.

“Such measures will affect both the public and private sectors in South Sudan by impairing future economic growth and development through a reduction in the transfer of skills and lowering foreign direct investment,” he said.

Three weeks ago, South Sudan declared famine in some parts of the country, saying about 100,000 people are at risk of starvation in Unity State which has been a rebel stronghold.

Yet last week, the government in Juba increased permit fees for foreign workers from $100 (Sh10,000) to $10,000 (Sh1 million), probably influenced by the lack of foreign reserves in the country’s Central Bank.

“Increased fees levied on foreign humanitarian workers will hinder the humanitarian relief effort in a manner that is inconsistent with the spirit of Chapter III of the Agreement. I appeal to transitional government of national unity (TGoNU) to reconsider these measures,” Mr Mogae said.

The JMEC an organ formed after Mr Kiir and Dr Machar signed a peace agreement mediated by regional bloc Igad, and supported by the African Union (AU) and donors, is responsible for monitoring the implementation of the peace deal.

In theory, Mr Mogae’s team which includes representatives from the warring parties and donors, is supposed to discover errant parties who fail to respect ceasefire and other provisions in the agreement and recommend sanctions, mainly to the government.

But his speech on Wednesday reflected the thoughts of a man frustrated by constant violations, impunity from the parties and a unilateral implementation of the peace agreement.

He accused the Salva Kiir administration of trying to force through their understanding of implementation, accused both sides of reigniting violence and called for errant perpetrators to be punished.

He has said this since the Commission was formed two years ago.

“There can never be a military solution in South Sudan. To find a sustainable solution, we must be willing to listen to all views, accommodate all constituencies and compromise,” he argued.

“Equally, a political solution cannot be imposed upon any one side by any other. We must be willing to find the appropriate solution that answers the interests of all and creates opportunity through a genuinely democratic dispensation,” he said.

The conflict is now threatening to tear the country’s socio-economic fabric. Apart from displacing more than three million people, the country’s economy is falling among rebels.

A World Bank overview paints a gloom picture. Oil production which financed 80 per cent of the national budget has dropped from 350,000 barrels per day in 2011 to below 100,000 in 2016.

In 2011, four in 10 people were considered extremely poor. Today, seven in 10 live on less than a dollar per day. Just three in 10 people can read or write, and only 16 per cent of literate people are women, according to the World Bank.

The country’s currency is routinely shunned even by its neighbours for lack of value and the Central Bank said recently it has no dollars left in its reserves. Its oil revenues are spent on repaying weapon debts.

In hyperinflation since 2015, inflation is currently at 730 per cent and hurtling towards 1000 per cent.

The agreement was supposed to bring to an end three years of war since 2013. But even after it was signed, human rights groups claimed more civilians were displaced, others killed. As late as last week, more were still being killed.

“Sadly, repeated calls for peace have gone unheeded. Those responsible must be held accountable for the continuous suffering of innocent civilians,” he argued.

For South Sudan, the problem has been that both leaders protect their foot soldiers from accountability, human rights groups say.

And when those fighters disagree with their bosses, they form rival rebel groups, complicating the conflict.


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