Kenya and Uganda’s move to evacuate their nationals and the subsequent travel advisories against Juba saw South Sudan’s inflation more than double in July to reach an annual rate of over 650 per cent, the highest in Africa.
South Sudan’s presidential spokesman Ateny Wek Ateny acknowledged that the evacuation of traders from Juba has caused a massive food shortage, resulting in high inflation.
“When Kenya and Uganda decided to evacuate their nationals, we saw a gap, which is yet to be filled. We have also seen a massive reduction in supplies from these two countries, causing a food crisis in South Sudan. Three-quarters of goods and most of the traders come from Uganda and Kenya, and with the travel advisories from the two countries, we are now feeling the pinch,” Mr Ateny said, adding that diplomatic talks are underway with the these countries and Juba to stabilise supplies of goods to the country.
“I can confirm that we have had contact with both Nairobi and Kampala over this matter. So far, we have managed to provide security along the Juba-Nimule road for transportation of food from Uganda and we will do the same for trucks coming in from Kenya so as to stabilise the market supply,” Mr Ateny said.
At the same time, President Salva Kiir has asked the South Sudan military to escort both Kenyan and Ugandan traders delivering goods into the country to stem the skyrocketing food prices. Traders from the two countries have lost an estimated $12 million in business since the mid-July violence.
Figures released by South Sudan’s National Bureau of Statistics (SSNBS) show that inflation increased by 405 percentage points in the past two months to peak at 661.3 per cent even as traders from Kenya and Uganda struggled to move their goods to Juba.
Prices of basic items in Juba have risen, with food going up by close to 55 per cent on average. Data from SSNBS show that the prices of bread, cereals, meat, fish, fruits and vegetables have gone up fivefold since April. According to the latest estimates, a kilogramme of maize trades at $9, while onions are priced at $12 per kg.
Meat and fish are the most expensive with the average price and $20 and $36 a kilogramme respectively.
Uganda biggest casualty
Last year, South Sudan was the sixth largest export destination for Kenyan goods, even though the value of exports dropped to $170 million from $198 million in the previous year. The country exports food, edible oil, pharmaceuticals, electronic products and other manufactured goods. Juba also depends on the Mombasa port for most of its imports.
Uganda, which is South Sudan’s biggest trading partner, exports mostly agricultural produce with maize and vegetables topping the list. Other exports are sugar, iron and steel, cement, beers and soft drinks, motor and vegetable oils and soap and lubricants. Last year, the country’s exports to Juba stood at $353 million, down from $385 million the previous year and $414 million in 2013.
Already, the Ugandan government has set up a Cabinet subcommittee to pursue the matter of Ugandan traders who are still waiting to receive payment for goods supplied to Juba.
Uganda’s Minister for Trade, Industry and Co-operatives Amelia Kyambadde said the Ministries of Finance and Foreign Affairs were directed by the Cabinet to establish the modalities for repatriation of proceeds of Ugandan companies held in commercial banks in South Sudan.
“The sub committee will also engage with the authorities in South Sudan to expeditiously form a joint co-operation commission to arbitrate the pending claims of Ugandans against South Sudan so as to effectively address this issue,” Mr Tumwebaze said, adding that the region’s businessmen had lost up to $12 million so far as a result of the strife.
Analysts at Global Risk Insights said Uganda stood to be the biggest casualty of the political and security standoff in Juba due to its economic ties with South Sudan.
“These security problems are blow to Ugandan exports destined for its northern neighbour, which will contribute to currency volatility for the Ugandan shilling,” the analysts said in their note.
Last week, South Sudan asked China for a $1.9 billion loan, which it intends to spend on infrastructure and oil projects to spur growth.
Foreign Affairs Minister Deng Alor said the government was in talks with the Chinese government for the loan.
“We presented a list. Anything below $40 million, we ask the Chinese government for it to be a grant and anything above $50 million to be a concessional loan. So we are asking for $1.9 billion. We plan to use the money on infrastructure like roads, bridges,” Mr Alor said.