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Watching the Bubble Burst: Political Implications of Sudan's Economic Implosion

By Eric Reeves

Executive Summary

September 17, 2014 (SSNA) -- Despite very considerable evidence that the economy of Sudan is collapsing under the weight of numerous unsustainable pressures, there is no full extant account of these pressures at this critical moment in the political history of Sudan.  Understanding the human and political consequences of economic collapse in Sudan is also critical in making sense of the future of now independent South Sudan. Nominally tasked with monitoring the Sudanese economy, the International Monetary Fund (IMF), and to a lesser degree the World Bank, have failed to present a full or accurate picture—too often dancing around difficult issues and simply accepting at face value figures provided by the Government of Sudan. Every one of the eight key charts in the IMF'sJuly 2014 reportindicates as its source of data: "Sudanese authorities and staff estimates and projections."

Most conspicuously, the two organizations have failed to provide anything approaching realistic figures concerning military and security expenditures.  There is in the July 2014 IMF report not a single line item—not one—reflecting or indicating the scale of military and security expenditures.  We may learn about "Regulatory capital to risk-weighted assets"; but we will learn nothing about investments in weapons acquisitions from abroad or the growing domestic armaments production.  We learn nothing of salaries and logistical expenditures for the Sudan Armed Forces or the militias the government supports.  Since the Government of Sudan—essentially the National Congress Party (formerly the National Islamic Front)—is deeply threatened by a fuller understanding of the dire straits in which the economy currently lies, it has an obvious interest in doing what it can to minimize popular understanding of growing economic threats, and in particular the excessive budgetary commitments to the Sudan Armed Forces, various security forces, and militias.

Certainly there is no dearth of studies, statistics, or analyses of the economy (see Bibliography).  But none does enough to assess the impact of Sudan's growing economic distress on various crises within Sudan itself and the region as a whole, most particularly in South Sudan.  Continued serious fighting in Darfur, the Nuba Mountains of South Kordofan, and Blue Nile mean that the Government of Sudan is obliged to spend inordinate amounts of annual revenues on armaments, soldiers' salaries, logistics, and the security services that are an integral part of the military power wielded by the government.

Estimates vary widely, but the consensus is that significantly more than fifty percent of budgetary expenditures are directed to the military and security services.  Moreover, the oil revenues that fueled the decade of economic growth following the first oil exports (August 1999) are now only a fraction of what they have been.  This augurs extreme difficulties in negotiating with South Sudan over final boundaries, since many of the contested areas—including Abyei—have significant oil reserves.

In all the regions where fighting is occurring, agricultural production has declined precipitously, creating extraordinary ongoing humanitarian needs.  The government has made provision of relief assistance impossible in the most affected areas of South Kordofan and Blue Nile, and for more than a decade has harassed, impeded, expelled, and threatened humanitarian organizations operating in Darfur, where security has become so bad that further withdrawals by organizations are inevitable.

It is in the domestic political arena, however, that the economy is most worrisome for the NCP government.  Inflation remains extremely high—and likely a good deal higher than suggested by the figures coming from the Central Bank of Sudan—and the Sudanese Pound continues a rapid decline in value against the dollar.  There is exceedingly little foreign exchange currency (Forex), which has led to acute difficulties in financing imports of all kinds, even food and refined fuel for cooking (Sudan's refining capacity is not sufficient to meet very large demand).  Bread shortages earlier in 2013 and 2014 were a direct result of a lack of Forex for purchases of wheat abroad, exacerbated by the increased cost to bakeries of cooking fuel.  Looming over the entire economy is the massive external debt, which in August stood at US46.9 billion according to the IMF; the government can neither repay nor service this debt without reforms—economic and political—it has shown itself unwilling to make.

Last September and October, there was a serious, sustained, and occasionally violent public uprising to protest the price increases resulting from the government's lifting of subsidies for fuel (including cooking fuel).  The government response was swift and brutal, with "shoot to kill" orders in place from the beginning of the uprising according to Amnesty International.  More than 200 demonstrators were shot to death, and many more wounded; some 800 people were arrested.  The figures are likely much higher.  Despite the normalcy of IMF accounts of Sudan's economy, there can be little doubt that it has reached the breaking point; and continued inflation, which may reach to hyperinflation, will—as it has before in Sudanese political history—be the economic force that brings down the government.

The emergence of the National Consensus Forces as a coalition of smaller northern political parties committed to "regime change" is but one sign of growing determination to end the 25-year rule of the NIF/NCP.  The "Paris Declaration" between the National Umma Party (NUP) and the Sudan Revolutionary Front (SRF) is another such sign.  The NUP, led by Sadiq al-Mahdi, is one of the two traditional sectarian parties that have long had significant political support.  The SRF is a coalition of armed rebel groups from Darfur, South Kordofan, and Blue Nile that is also committed to regime change, by force if necessary.

The current Government of Sudan has no way to respond to both increasing political pressures and the consequences of a rapidly deteriorating economy.  As a result, it will almost certainly resist change, with violent repression, for as long as possible; for many of its leaders have been or will be the subject of arrest warrants for crimes against humanity by the International Criminal Court, and will have no recourse or avenue of escape once the government falls.  They are as a consequence especially dangerous, and the fall of the regime may well be very bloody.  The international community should plan now how to assist in the creation of a democratic, inclusive, and secular Government of Sudan, and should be prepared to address some of the most immediate problems, including widespread food insecurity.

Full text, including text, charts, graphs, and bibliography |http://www.enoughproject.org/reports/enough-forum-watching-bubble-burst

Eric Reeves' book-length study of greater Sudan (Compromising With Evil: An archival history of greater Sudan, 2007 - 2012; www.CompromisingWithEvil.org; review commentary at: http://wp.me/p45rOG-15S)

NGOs: Does Being a Foreigner Qualify Someone as an Expatriate in South Sudan?

By Deng Mangok Ayuel

September 19, 2014 (SSNA) -- Are foreign experts worth so much? I have kept contemplating, partially failed to understand why do western NGOs’ top managements bring along with them fellow Kenyans and Ugandans who schooled with some of us at the same schools as experts in our country? Where did NGOs open schools of experiences for East Africans? There is no need for organizations to spend huge amount of dollars on foreigners who have had been doing less than expected for quite long time.

Does being a Kenyan or Ugandan qualify someone as an expert in South Sudan?

These foreign aid workers are plain dealers who have bewitched South Sudan economically. They blindly failed to recognize the existence of educated nationals in the country.

However, Africans are almost educationally equal. The post-protracted civil war in Sudan shouldn’t be taken as an advantage for branding South Sudanese as uneducated. There are South Sudanese who had studied in the West, South Africa than Uganda and Kenya. Are these nationals unable to do anything in their country?

If Prof. Talban Liloyong had branded East Africa as a ‘desert of literacy criticism’, is it anything to celebrate and boast of being an expert from Kenya?

Many East Africans in South Sudan failed to understand that their presence in our country is based on our will and cooperation as neighbors or sisterly countries than their education. These people aren’t contributing something good but exploding our economy. They should acknowledge our generosity.

A Kenyan economist has termed a decision made by the Ministry of Labor, Public Services and Human Resource Development to fire foreign workers who are currently working for NGOs, companies and telecommunications or private sectors in the country as ‘premature and stupid decision’. So why can’t Kenyan government fire South Sudanese workers in Kenya for their stupid decision?

Besides, Babe Cool, a Ugandan singer has also stated on his Facebook page that he is ready to trouble South Sudanese in Uganda if the government in Juba implements its decision to sack foreign workers in the country. Why do Ugandans enforce themselves into South Sudanese affairs?

When the ministry of Interior took a decision to ban Uganda Boda-boda ridders in Juba, people felt it in Uganda as the boys used to send money home and they roared amicably. This is not going to be Boda-boda saga where South Sudanese were targeted in Kampala. It’s a national decision.

All in all, Ugandans are fond of meddling. It’s their nature! Any decision taken by the government regarding foreigners is always being personalized by Ugandans – are Ugandans they only foreigners in South Sudan? If the government in Kenya and Uganda can’t create jobs for you, then it’s not our problem. The decision made by our government to fire foreign workers doesn’t need any foreign reactions.

Deng Mangok Ayuel is a South Sudanese blogger and humanitarian worker, lives in Aweil, South Sudan.He can be reached via This e-mail address is being protected from spambots. You need JavaScript enabled to view it

The Labour Policy Change in South Sudan: Celebrated at Home but Decried across the Borders

By Jok Ayuen Mabior

September 19, 2014 (SSNA) -- The recent circular from South Sudan’s Ministry of Labour, Public Service and Human Resource that outlined the labour policy has raised eyebrows, even garnered fury with some people.  Indeed, it prompted what used to be a refutable news outlet, the NTV Kenya, to brand South Sudanese as “Thankless kids”.  And another Kenyan journalist exaggeratedly likened the policy to that of Idi Amin’s expulsion of Asians and Indians from Uganda in 1972.

Why the new policy has engendered such feelings from our neighbours? The policy (or lack of it) that favoured foreign nationals has existed for a long time. In addition, the breadth of the coverage of the new policy would make one understand why there have been such angry reactions in Kenya and Uganda.

Indeed, the government should not have expected that it would be all smiles with this policy change. If you have been offering food to someone for a long time, he or she will think something is wrong with you when you abruptly cease to do that. Therefore, government should have explained more the justification for the policy change, even when it is too obvious.

However, one would strain his or her nerves very hard to understand why Kenyans and Ugandans always react the way they do to events pertaining the interest of their fellow citizens in South Sudan. Their first favourite reaction is always a comical name calling that South Sudanese are blacker than they are. Although, it is literally a case of a kettle calling a pot black, it is a very unfortunate way of resolving disagreements.

Their other reaction is an emotional call for retaliatory measures. Indeed, the fact that there are thousands of South Sudanese residing and studying in Kenya and Uganda is always pointed out. However, one thing suffices to be said about this. Those South Sudanese who are residing or studying in Kenya and Uganda are spending their own money in Kenya—paying for rents, food, and education.

That South Sudanese are living in those countries is another life tube for the economies of Kenya and Uganda. So, expelling South Sudan’s citizens would not hurt South Sudanese the way it would to these countries (i.e., if established that residing and studying of South Sudanese in these countries was a quid pro quo for their citizens’ working in their South Sudan).

Further, the fact that South Sudan had received help from these neighbouring countries in the past has entered into the psyches of some citizens of these countries. They fail to find any rational argument whenever they feel aggrieved by actions of South Sudanese authorities. These people juvenilely argue that South Sudan must always respect and protect their interests at the expense of its own, simply because their countries had hosted (continue to do so) South Sudanese during their struggles. As for Kenyans in particular, the fact that Kenya midwifed peace agreement that led to South Sudan’s independence is taken a source of entitlement. A credit to be paid perpetually.

To be fair, South Sudan’s neighbours had helped her in one way or the other. Some had hosted our refugees and while others offered us political and military assistance. In fact, South Sudan as a country will always be grateful for that. However, the citizens of these countries, especially Kenyans, must be reminded that it was not every South Sudan who had been a refugee there had a pleasant experience.

The fourth reaction is around the fact that South Sudan is aspiring to join the East African Community (the EAC) shown by its application to join the bloc. This is taken to mean that South Sudan should have by now begun to treat any citizen from the EAC counties like its citizens. That is why those who are dissatisfied with the new policy argue that there should not be any restrictions on the employment of their fellow citizens.

However, they need to be reminded of these facts. First, the EAC has a long way to go as political integration is concerned. Equal treatment of member states’ citizens has to wait for that development. Indeed, the existing countries of the EAC do not have the open door labour policy. In this regard, South Sudan is not alone in preferring the interests of its citizens. Second, equal treatment of the Citizens of the EAC this is not requirement for joining the EAC. Thirdly, if joining the EAC have to be at the expense of South Sudanese, it would be easy for South Sudanese to say “to hell with EAC”.

Back to the complaint. Does South Sudan have to permanently subordinate its interests and obligations to its citizens to show gratefulness? The simple answer is no.

The long explanation of that answer is this. Every community, society or nation-state has a right to maximise the interests of its citizens. South Sudan, like any other country, has a primary obligation towards its citizens. This is the very reason for the existence of the state of South Sudan—protecting the best interests of its general populace. Its government has a mandate and a responsibility to make policy choices and regulations that best serve interests of the citizens. This includes allowing foreign nationals to work in South Sudan in areas where local expertise is lacking, and preferring the employment of locals where it is expedient to do so. 

However, South Sudan government has been a “no-show” in this endeavour since 2005, understandably so. There were few confident South Sudanese to fill in those positions back then. But that is different now.

Sadly, this open door policy has been abused. The NGOs and big business corporations have used this as unquestioned right to import workers outside the countries, and in most cases employing up to 100% foreigners as their staffers. Indeed, the flawed argument is that there are still no qualified South Sudanese for such positions. However, the only way to find out whether there are no educated locals is by opening those jobs to them. If no one applies for such jobs, then the NGO’s and business companies will be justified to hire outside the country.

Their other justification is that South Sudanese are lazy. Uncritical and insulting as it seems, it is a deliberate ploy to keep South Sudanese away from those lucrative jobs. However, it is a non-starter. It is the same South Sudanese so described who want those jobs! Why complain?

Overall, our neighbours need to know that South Sudanese are generous people. And they do not hate others. What is happening is that South Sudan is struggling with high unemployment. What can the government do?

Our neighbours need to enter inside South Sudan’s skin to understand the necessity of this policy. Ordinary citizens have been crying out for the change. However, the status quo was maintained due to inactiveness of the policymakers.

Two factors necessitate the revision of the labour policy in South Sudan. Let’s start from the obvious one. First, South Sudan economy that depends on oil has been badly affected by the ongoing senseless violence in the country. This has accentuated the unemployment situation in the country—awakening the government from its slumber-like complacency.

The second factor, and which depends on the first, is the level of youth unemployment in the country. There has been a steady increase in unemployment rate in the country. This coincides with the returns of educated South Sudanese from regional universities in Kenya, Uganda and Ethiopia. They have no places in these countries since the governments there are also struggling with high unemployment rates among their youthful populations. Indeed, all these years, South Sudan has been the one assisting these neighbouring countries with keeping down of their unemployment rates while its own skyrocketed.

Logically, South Sudanese had to return home in droves, but only to find no jobs awaiting them at home. The private sector and NGO’s jobs are the preserves the foreigners. At the same time, the public sector, which has overwhelmingly been the employer, had reached a saturation point long time ago. Still, this has been aggravated by the fact that its sole source of revenue in the oil sectors is now operating below its expected capacity.

Should the government have turned a blind eye to this as it have been doing in the past? No! A prudent government must look for ways and means of alleviating this acute problem. In fact, the function of the labour ministry is to minimise the impact of high influxes of foreign workers in its labour market. Therefore, a current shift in the labour policy is a good decision in a right direction. It might have come too late in the day, but better late than never.

However, some caveats have to be made about the circular. First, the language of the circular is an alarmist. It is tantamount to an ultimatum. Its language portrays it as a knee-jerk policy from someone who has been sleeping on the problem and has unjust woke up to the sound of alarm bell tied to his or her door post.

A policy of this nature should have been carefully formulated and communicated in a manner that would minimise misunderstanding that might ensue from it. The introduction of the policy should have a gradual process that would culminate in having certain percentages of NGO’s and corporations workers given to South Sudanese.

Secondly, the policy would have benefit from consultation. The NGO’s and business are equal stakeholders with the government in serving the people of South Sudan. The government needed to have consulted with these stakeholders. However, the nature of the circular—its language and presentation—suggests that little has been done by way of consultation with these stakeholders. It is a flaw that is noticeable.

Thirdly, the new policy affects real people with real financial fears. As such, a person responsible for this policy needed to have realised that those positions they demanded to be given to South Sudan are being filled by people with families to feed— even when they are foreign nationals. Thus, it was irresponsible to put out a circular that demanded termination of these jobs overnight.

Having mentioned those caveats, should our neighbours feel aggrieved?  Of course, they should. There is nothing wrong with their sense of entitlement, even though many South Sudanese may take exception to that.  But, of course, that sense of entitlement has to be regulated by the host government. Therefore pairing it with Amin’s expulsion of Indians from Uganda is a sensationist and over exaggerated characterisation of that policy. 

Therefore, the reactions from the neighbours are unwarranted. There is nothing xenophobic about the policy. Nobody is being expelled from South Sudan as some journalists in Kenya and Uganda are irresponsibly portraying in their slants.

This policy change will bring South Sudan labour policy in line with the practices in countries where employers have to seek work permits and to “show cause” why there is a need to hire staff outside the country. The existing practice in which South Sudanese are simply overlooked is not sustainable, given the circumstances the country is in. Maintaining the status quo is not only in ignorant of the change in South Sudan’s labour market, it also amounts to an insult to the citizens of South Sudan. Furthermore, preferring foreign workers to local people where there is no proper justification, as it is currently the case, is a gross injustice. A caring government (or even an opportunistic one) would see a reason for a policy change in these circumstances.

A policy change is warranted. The proposed policy will serve the interests of both foreign nationals as well as South Sudanese—making them both happy.

The author could be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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