Monday, November 16, 2015

South Sudan Economy: The Best and Worst Case Scenarios

By John Apuruot Akec
All economies, large and small, experience periods of boom and bust. Like us humans, all
economies get sick; and from time to time, require fixing to bring them in line with respective national economic policy objectives: namely, maintaining low inflation, sustaining economic growth, and achieving full employment. Causes of economic crisis may differ from one country to another. Each demands appropriate diagnosis and right prescription in order to recover. And we all agree that South Sudan’s economy has been experiencing challenges for sometimes. Notable among these challenges has been the continuous hikes in prices of consumer goods. In economists’ jargon, we are experiencing serious inflation (due to rise in cost of buying dollar for imports, and aggravated by increase supply of national currency in circulation month after month). This inflation is so severe that it qualifies the description of ‘a crisis’ as prices of food and durable goods have tripled or quadrupled over the last few months. It is also seen in the disappearance of fuel from the market and the sights of long queues of vehicles and boda-bodas at petrol stations in nation’s capital, Juba.

The causes of this economic crisis are well understood. Briefly summarized, the drop in the global prices of oil has meant that very little revenue is accruing to the Ministry of Finance and Economic Planning. War has also led to shutting down of production of oil in Unity State resulting in reduction of total oil output by 30 percent. All factors combined have created a large deficit (or shortfall) in the government public finances. The shortfall which amounts to SSP 600 million a month or SSP 7.2 billion a year is being funded through central bank’s borrowing. Central bank borrowing, also known as deficit financing, is believed to be responsible for massive increase in the amount of national currency notes circulating in the economy, whereas the supply of hard currency (dollar) available for exchange remained fixed or somewhat reduced. In other words, deficit financing has resulted in “too many South Sudanese pounds chasing too few dollars.” Consequently, our national currency has fallen in value by almost 300 percent against dollar (from SSP 5.5 to a dollar in January 2015; to SSP 18.5 to a dollar by the end of October 2015). And since we are import-oriented economy, prices of imported goods have subsequently tripled. Some traders have shifted to US dollar as the preferred medium of exchange and better store of monetary value, first sign that our economy is about to dollarise.

The Best Way to Destroy a Nation
And to be sure, instability in value of national currency is a matter that deserves an utmost attention. It is no lesser critical than deciding to go to war; or declaring a state of emergency. History has it that Vladimir Lenin, the first leader of Communist Russia, once shrewdly observed that the best weapon for destroying a nation is to destroy its currency. Later on, history tells us, Adolf Hitler, having independently come to the same conclusion as Lenin, planned to fly airplanes over England not to drop bombs, but to unload tones after tones of counterfeited notes of British currency! No one is sure if those plans ever materialized. However, its mention here doe help to drive this point home –stability of national currency is a matter of life and death.
As a nation, we face two scenarios: the first is to absolutely to do nothing but sit back and watch our currency decent into insignificance, just as we have been doing so far, and be ready to pay the ultimate price for inaction. The second scenario is to wake up and take some corrective measures in order to restore confidence in our national currency.

The Best Case Scenario: Floating the Exchange Rate Irrespective of our Financial Standing
The best case scenario is to abolish the fixed exchange rate as soon as possible, irrespective of our financial standing. It is to be recalled that an economic workshop was organized by the government in May 2015. Many economists who attended agreed that the problem stems from deficit financing; and that the best remedy is to move away from the fixed exchange rate policy to a market-determined rate.  However, economists could not agree on pre-conditions for such measures nor the best timing. The result has been stagnation, and continuous decline of South Sudan in currency market. However, there are strong arguments against inaction.

For example, the pro-alignment camp argues that at the current parallel exchange rate against dollar of SSP 18.5 to dollar (as of Sunday 8 November 2015), the Ministry of Finance will fetch SSP 1.11 billion for USD 60 million, the estimated monthly oil revenue accruing to the government of South Sudan, or an estimated annual income of SSP 13.320 billion per year (on flexible exchange rate policy). That is, at the stroke of a pen, it does away with the huge deficit.
Add to it the tax revenue of SSP 1.44 billion annual tax revenue, and we have total income of SSP 14.76 billion of government annual income. That is, 4.75 billion additional funds that can be used on development and partly on increasing the salaries of workers on low income in order to reduce income disparities. This is better when compared to estimated SSP 3 billion annual government revenue at current fixed exchange rate of 2.96 to a dollar and a deficit of SSP 7 billion in the approved budget of SSP 10 billion for 2015/2016. It is important to note that these reforms can be implemented with or without foreign currency cushioning. Furthermore, reform of income tax (to include constitutional post holders) could raise additional SSP 2.4 billion per year, taking the total estimated revenue for this financial year to about SSP 17.16 billion.

Furthermore, additional measures include removing fuel subsidies. Currently, Nile Petroleum Corporation spends about USD 18 million per month on fuel or USD 216 million per year (SSP 4 billon) in real term at parallel market rate. A liter of petrol or diesel sells at SSP 6 or USD 2 at fixed exchange. In real terms and based on parallel exchange rate, it should sell at SSP 37 a liter.

Hence there is subsidy of SSP 31 per litter which works out to 83% fuel subsidies paid by  Nile Pet on our behalf. Still below the black market price of SSP 60 per liter which many are ready to pay.
Hence, removing the subsidies fully (for argument’s sake), the government can get back an estimated amount of SSP 3.3 billion (USD 179.3 million) a year. All in all, the government revenue can rise to SSP 20 billion without increasing the taxes. With these measures, it is possible to recalibrate and stabilize the South Sudanese pound.

The Worst Case Scenario: Doing Nothing
This is the favoured scenario by the majority of our economists and members of legislative assembly. They argue that we do nothing until our financial standing improves (a buffer to defend the pound when demand for dollar at market price increases. This is in complete defiance of inverse relation between demand and prices.  And doing nothing, fortunately, does not require lengthy explanation to understand. It means our Minister of Finance will continue to run a budget with large shortfall of SSP 7 billion a year; funded through central bank’s borrowing which means pumping more currency notes into circulation every month. The South Sudan pound will continue its free fall by an average of SSP 2 per month; and by February 2016, the exchange rate of our currency against dollar will hit or exceed SSP 25 mark. Millions of low-waged individuals will be squeezed out of the market as they will no longer afford to feed their families. Salaries (even for the best paid) will come to mean nothing. Fuel prices will continue to rise. Life will be unbearable for most with the exception of few. The successful implementation of peace agreement will only bring in additional USD 30 million per month (SSP 90 million per month at fixed exchange rate of SSP 2.96 to a dollar). That is, if production in Unity State resumes by December 2015, which is unlikely. Even that addition to government revenue will not make huge difference as long as the exchange rate remains fixed at SSP 2.96 to a dollar, the deficit will fall by SSP 90 to SSP 510 million per month (SSP 6.1 billion annually); and the fall of South Sudanese pound will continue unabated.

In the final analysis, serious political and social upheavals will ensue as a result of unresolved economic crisis. And most probably days and weeks around January or February in the new year (2016) could be troublesome to our stability. And if that happens, many of us will find ourselves agreeing with the economist John Maynard Keynes who expressed his frustration with the classical economists who would not advise their governments to intervene with stimulus in order to speed up economic recovery after the Great Depression which happened between 1920 and 1929.
To Keynes’ dismay, the established classical economists occupying White Hall in Britain and beyond, insisted that governments in Britain, Europe, and United States do nothing but allow their economies to self-correct (in the long run). Against which John Maynard Keynes argued that the long run argument is a misleading guide to current affairs as they existed then. And that in the long run all will be dead. Keynes also lampooned classical economists’ influence on political decision-makers to do nothing saying: “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist[s].”

And if our defunct economists could have their way, Keynes, Lenin, and Hitler would be shaking their heads in their resting abode, amazed that someone in the enlightened twenty-first century would still choose to ignore their wise insights.

Sunday, September 06, 2015

Saving South Sudan's National Currency will fix the economy and reclaim the state

By Pursuit of Fiscal, Monetary, Property Rights, and Institutional Reforms

By John A. Akec

The Economy Caught between a Rock and Hard Place?

"South Sudan… there is no more country", runs the title of a recent headline article in New York Times. The article was read in Juba and, not surprisingly, life went on pretty much the same – business as usual. "The economy of South Sudan will collapse," pronounced Tom Lanzar, the former Assistant to the UN Secretary General for Humanitarian Affairs in South Sudan, after which he was declared non-persona grata, and politely asked to leave the country. These pronouncements were somewhat exaggerated, I must confess. However, it is for our own good not to dismiss such outlandish observations out of hand and go to bed undisturbed, without pausing for a moment to reflect. Who knows, they could be the tips of an iceberg.
The New York Times article exhibits a country gripped in damaging civil war in which the state appears to be losing its monopoly of violence with the attendant negative consequences on the effective administration of justice and the rule of law. It echoes the warnings of the great 17th century English thinker and apologist of a strong centralized state, Thomas Hobbes, in his magnum opus book, Leviathan, that: "The obligation of the subjects (citizens) to the sovereign is understood to last as long, and no longer, than the power lasts by which he is able to protect them…the end of obedience is protection." Namely, any inkling by the citizens that their state is not able to protect them enough leads to the termination of social contract with the state; that is, the citizens may decide to renege on their obligation to obey the sovereign. Instead they will decide to take charge of their own protection and that of their properties. It follows from there that most will live in continual fear and danger of violent death. With the result that, as Hobbes describes it, "the life of man [becomes] solitary, poor, nasty, brutish, and short."
On the other hand, Tom Lanzar's unfortunate pronouncements emanated from the persistent decline of the value of South Sudan pound against US dollar in recent months, with no evidence in sight as to the possibility of new fiscal and monetary reforms that would arrest the fall. Left unchecked, an uncontrolled depreciation of our national currency has the undesirable potential of ruining our economy through hyperinflation. In state of hyperinflation, prices of consumer goods increase by the day, and in extreme cases, by the hour. That is, what you bought in the morning could cost more in the afternoon. That, I believe, was the gist of Lanzar's message. Alarmist as it was, but not far-fetched.
The two verdicts (that is, the New York Times article, and Tom Lanzar's statement), hasty as they may be, are reflections of two faces of the same coin: war ruins national economy; bad economy leads to social unrest, undermines the rule of law, and the legitimacy of the state.
By taking measures that will halt further decline of our national currency, and quickly raising the revenue through taxes as we continue to search for a sustainable and lasting peace; this writer believes the sovereignty, ostensibly pronounced 'lost' by New York Times, can be reclaimed; the feared collapse of our national economy through hyperinflation, can be averted; and the many skeptics and doomsayers can thankfully be proven wrong.
Here, through the implementation of some radical economic reforms, everyone stands to gain, even those who perceive themselves 'losers' to the inevitable forces of creative destruction such reforms are bound to unleash. And let us be assured that doing nothing is no longer an option. Neither will half-hearted, knee-jerk prescriptions do the trick.

The Origins of South Sudan Economic Owes

South Sudan government income is mostly dependent on oil revenue (accounting for about 98% between 2005 and 2011; decreasing to 96% by December 2014; and dropping further to 60% by June 2015 of the total revenue).
Around June 2014, the monthly oil revenue stood at around SSP 360 million (USD 120 million) per month. By June 2015, it has halved to SSP 180 million (USD 60 million) per month, using Central Bank fixed exchange rate. The drop in oil revenue is attributed to drop in global oil prices per barrel from USD 101.2 in June 2014 to USD 50.7 in May 2015.
In the meantime, tax revenues rose from SSP 75 million per month in 2013 to SSP 120 million per month by January 2015. This brings the total government revenue by June 2015 to at SSP 300 million per month.
At the same time, the government monthly expenditure by June 2015 stood at SSP 900 million per month. This leads to a gap or deficit of SSP 600 million per month or shortfall of 66%.  
This hole in the finances is being closed through bank borrowing, which economic experts believe will undermine South Sudan economy in short, medium, and long term by making the national currency  worthless against other currencies. Bank borrowing or monetization of deficit was responsible for causing hyperinflation in Zimbabwe and in DRC.
What's more, the Ministry of Finance and Economic Planning has not been collecting much tax and tax income has been low because of the very narrow tax base (mostly customs and excises, and personal income tax of basic pay excluding allowances.) Many constitutional post holders such as government ministers, members of parliament, governors, commission chairs and members, county commissioners etc are not taxed. Hence, despite the potential for raising the government revenue through taxation are significant, and yet it remains untapped.

The Possible Remedial Options to Pursue

There are effective remedies that our country can pursue to address the recent financial challenges. It must come as a surprise to many that we have not been able, until now, to use them so far. It reminds us of Sirr Anei Kelujang's prophetic lines in his poem written in the late 1970s that reads:  "South Sudan do not be like little Gaak (bird) who died of thirst in rich field of ground nut by  River Jel; Nor be like the  Jalaba who died of hunger in a cage full of gold." (Kelueljang, The Myths of Freedom and Other Poems).
According to Kelueljang, Gaak ate plenty of peanuts and became thirsty; unable to locate the river close by, died tragically of thirst. The unfortunate Arab trader was locked up in a cage (goodness knows by who), and therefore was not free to benefit from his valuable possessions and died as miserable cage-prisoner.
There is a strong moral lesson for us in the tale of the poem. First of all, the options for resolving South Sudan's economic challenges are quite straightforward, and yet appear so illusive, so remote and so unattainable to our finance decision-makers. Vested interests have always made sure the attention of our government is deflected to other matters.

Unifying Exchange Rates

The first line of attack should be to unify the exchange rate. In other words, to move away from the fixed exchange rate policy that has been maintained by the Central Bank of South Sudan since 2005, and adopt flexible, market-determined exchange rate. The Ministry of Finance can ask central bank to pay for its monthly oil revenue the equivalent of today value exchange rate of SSP 14.5 to a dollar. That means for the USD 60 million per month from oil sale, the Ministry of Finance will fetch at least SSP 870 million per month. Add to that the SSP 120 million that is raised every month from customs and excises, and the Ministry will have in its account a sum of SSP 990 million. It means market determined exchange rate will bring in additional SSP 690 million of income per month and create a surplus of SSP 90 million that we can spend on other things.

The Impact of Currency Realignment on the Economy

An important implication for such a step is that there will be no need for the Ministry of Finance to borrow from the central bank to pay salaries and other expenditures. Every time the exchange rate goes up the Ministry of Finance will get more for its oil revenue. The effect will be that those hording dollars under their pillows will sell it to the Central Bank and the exchange rate will start to stabilize or even falls according to laws of demand and supply. Prices of consumer goods will also stabilize. The cost of imported goods will rise and in long term, and set in motion the pressure on entrepreneurs to meet the demand for some imported consumer goods locally. Markets will adjust and eventually stabilize. The pound will be saved, and with it, the country. We do not need foreign currency reserves in order to "defend" the pound; or is it in essence the defending the dollar? As some experts would want us believe. Waiting or doing nothing to stabilize the pound is not an option.

Increasing Tax Revenues

Raising taxes is the base on which all modern states are founded.
Hence, the Ministry of Finance and Economic Planning needs to raise more tax revenues in order to improve to meet its national obligations. Suppose we as a country did not have oil in the first place to pay our public servants and provide public services, how on earth were we going to survive? In fact, many countries such as Germany, Israel, South Korea, Switzerland, and our neighbours Ethiopia and Kenya do not have oil and yet enjoy thriving economies. How they do it? The answer is simple: they use taxation in different guises and forms in order to fund government expenses, build infrastructure, fund development projects, and maintain national security.
Following the examples of many countries that do not depend on oil and yet thrive, the government of South Sudan could make a conscious strategic decision to fund it budget through tax (and only fund a small part of  by oil revenue, preferably infrastructure project funding). Tax reforms should include, a centralized tax revenue authority, a progressive tax that does not exclude constitutional post holders, and at least 95% of taxes should be collected by the national government represented by National Revenue Authority.
For example, based on the current public sector pay of SSP 600 million per month, and assuming an average of 30% personal income tax rate on the gross pay of all the public sector employee through the Republic of South Sudan, the Ministry of Finance can take back at least SSP 200 million per month as tax which leads to total tax revenues jumping to SSP 320 million per month. Add this to the oil revenue of SSP 870 per month (using current market rate of one SS 14.5 to a dollar), the government revenue will total to SSP 1.19 billion a month or SSP 14.28 billion a year. With widening of tax base to include private sector income tax, value added tax on luxury consumer goods and telephone calls, tax revenues can be doubled or tripled. The government will have no difficulty rendering the services and protect us and our property because it will have the resources it needs. South Sudan will be once again bankable to international finance bodies such as IMF and World Bank. Lost friends will renew relations with us.
To sustain economic stability and spur growth, other measures need to be taken in order to improve economic governance and create attractive investment climate.

Property Rights Reforms

The National government must enact speedy reforms to regulate and control land property rights across out ten states and one administrative area; while making sure that communities displaced from lands for developmental purpose are adequately compensated. The notion that community own and control land is responsible for current conflict over lands, land grabbing, and insecure property rights that scare away foreign direct investment.

Setting Up New Institutions for Improved Economic Governance

To ensure better and more effective economic governance the following institutions need to be set us as soon as possible. These are:

Independent National Revenue Authority

To be set up as lead agency responsible for collecting taxes and identifying new opportunities for raising tax revenues and improving tax collection efficiency. It should be responsible for collecting 95% of tax revenues throughout the country.

Institution for Strategic Planning

Every country must have strategic goals that define where the nation wants to be in the next 3, 5, 10, 15, 20 years and beyond. What we do at present will bear fruits in the distant future. What we do not do at present can be a missed opportunity tomorrow. Hence, South Sudan can do better with a little more strategic thinking and less with groping in the dark.
For example, where South Sudan finds itself today in terms of shortage and high fuel prices is hardly an accidental misfortune, but rather the ultimate prize for not thinking and acting strategically five or seven years ago. It is a living proof of the cliché: failing to plan [strategically] is planning to fail [strategically].
Institutions for strategic planning are vital for the survival and future prosperity of any country. All forward-looking nations must have institutions that specialize in scanning the horizons for risks, threats, and opportunities; then prod the governments to plan and act well ahead of time upon the findings in order to minimize risks, reduce threats, and exploit opportunities. The government of South Sudan must set up a council for strategic planning that consults and works with academic and research institutions, think-tanks, and civil society groups to conduct policy analysis and compile reports that inform government strategic policy design and long-term development plans.
That also means the government should avail funds for think-tanks, research and academic institutions, and civil society groups to build up their capacity to play their role in socioeconomic development. And more important still, the government must act upon their analysis and findings.
The designated institution(s) for strategic planning should monitor how developmental projects are faring and frequently publishes reports (internal and public), meets with the legislators and executive branch of the government to discuss the status of progress of major projects and performance of the economy; thus enabling the executive branch to take informed actions and corrective measures in good time. The institution(s) of strategic planning need to have specialized committees or department within it dealing with specific issues and ministries. Its membership should include heads of specialized committees in the legislative assembly, among others.

 South Sudan Economic Advisory Board

A multi-disciplinary body with secretariat hosted in the Presidency or Cabinet Affairs and works closely with the Council for Strategic Planning and the Ministry of Finance and Economic Planning, Academia and Civil Society to make informed decisions that affect the economy in the short and medium term.

Financial Allocation, Monitoring and Evaluation Authority

This works closely with Council for Strategic Planning, South Sudan Economic Council, the Ministry of Finance and Economic Planning, specialized committees in the national legislative assembly, anti-corruption commission, office of auditor general, statistics commission etc. It should report and publish allocations and use of funds at least once or twice a year.


In order to move forward, three keys words are central to the success of any radical economic reforms in South Sudan: strong political will. Such a strong political will was demonstrated recently when the SPLM party leaders took brave steps to implement Arusha Agreement and reunify the party. SPLM leaders can demonstrate such courage once more time by taking measures that will bring about serious and speedy economic reforms, to rescue the South Sudan pound, and save country. We are at critical juncture: to thrive as a prosperous and free nation, or suffer the immense consequences of a contracting economy.

Wednesday, July 02, 2014

Decentralization and Federalism are Faces of the Same Coin

By John A. Akec*
A Week Cannot be Longer than Seven Days
If you catch cold and seek medical advice, it will take you only a week to recover from it; and if you don’t see your doctor, the cold will last for only seven days to get over. This was how we would quip during our beautiful school days when we saw a friend struggling with cold.  What is the point to be made here, you wonder?  Simply put, some things mean the same thing, because a week and seven days measure up to the same length of time (68 hours and 0 seconds). A one-week old girl is not older than seven-days old boy.

Federalism will be no more "Just" or "Fairer" than Decentralisation or Devolution
And in the same way, the disaffection with the implementation of decentralization clauses in our constitution has driven many of our citizens to call for the adoption of federalism as a better cure for our political injustices, be they real or perceived. However, from a personal perspective, this debate is nothing but war of synonyms. It is a vain attempt to reinvent the wheel when we have plenty in the store, to create a bone of contention when none existed, and to pretend to be innovating when the real term for this kind of futile exercise is "recycling" the old instrument.  

Many self-confessed federalists, I think, do not seem to realise that decentralization clause in our constitution is meant to address the same governance concerns that are tackled by different brands of federalisms applied in other jurisdictions. First, by bringing government closer to the people (as stipulated by article 36 (1) of SSC 2011, and Local Government Act 2009). Second, by devolving power to three levels of government: national, state, and local (article 47 SSC 2011). And third, by accommodating diversity in terms of cultures, beliefs, languages, values, and economic resources (article 48 SSC 2011). Finally (by implication and extension) reducing complexity of governing a large expanse of land; and installing systems of checks-and-balances in the way a country is run by the executive.  

It means, amongst other things, local problems will be addressed using local solutions that are conceived and crafted by local people; as opposed to centralized, one-size-fits-all prescriptions that are handed down from capitals to states; or from states to counties; or from counties to payams and bomas.

Those who believe that appending the term "federalism" to our constitution will add value to our decentralized system of government have not shown us as yet as to how this could be achieved, unless they have other definitions of federalism in mind, which they have not shared with us.

It all reminds me of the saying: "in the land of the blinds, one-eyed man is king." And in South Sudan these days, I have never witnessed such a large number of one-eyed men and women, (in form of politicians bored out of their bones for the lack of challenges, and lazy intellectuals masquerading as federalism experts), misleading such a large number of us. And that is not acceptable. 

What is wrong with Current Decentralisation Arrangements?
According to some of the opinion writers (Refer to Jacob Lupai's article in Juba Monitor, June 12, 2014): "The present centralized system dubbed as decentralization mostly favour none other than Dinka."
The writer goes on to point out the percentage of presidential advisors, the chairs of commissions, the undersecretaries, and security personnel who come from Dinka ethnic group as higher than those from the remaining 63 ethnic groups that make up South Sudan. And as a matter of fact, this was a correct observation (the relatively higher percentages of Dinka occupying high political positions cannot be questioned or denied). However, the writer misses the point about the yardstick by which the "strength" of a federalist system of governance is measured (it should by how much power is centralized and how much is devolved to lower local levels or concurrent).

Furthermore, assuming that federalism is measured in terms of representation of different states/ethnic nationalities in the central government, the writer should have acknowledged the fact that for every 10 South Sudanese, 4 are Dinka. That in South Sudan's 10 states, 7 states have Dinka population. And in order for any system to be just and fair, the distribution of political and economic power should be reflective of such asymmetries (the 64 ethnic groups forming South Sudan have sizes ranging from several millions to a few hundred individuals).

Moreover, and tragically still, according to this same school of thought, being "favoured" by a system is measured solely in terms of ministerial portfolios held by members of an ethnic group and not by distribution of economic benefits and service enjoyed by each community.

This is because the graduates of this school overlook the fact that 85% of South Sudan government revenue is currently spent in Central Equatoria State (Juba); that Central Equatoria continues to lead the whole country in most development indicators:  according to the 2009 statistical year book,  it is evident that that it had the highest level of children immunized in the country (43% compared to 12% in Warap State, and 6% in Northern Bahr El Ghazal); recorded the highest rate of primary school enrolment (20% compared to 2% in Warap and 1% in Northern Bahr El Ghazal); the second highest percentage (30%) of households with  access to improved water resources after Western Bahr El Ghazal which has 37%, but higher than 12% in Upper Nile, 7% in Jonglie, 2.3% in Eastern Equatoria, and 6% in Warap. This is to say nothing about the number of kilometers of paved roads in Central Equatoria or access to better health services compared to the rest of the country.

These prosperity indicators are better benchmarks for measuring economic and social inequality/equality in any viable country, as opposed to a ludicrous headcount of how many Dinka or Non-Dinka are occupying how many ministerial portfolios, all of which bear no correlation to how our various communities are faring on the ground.

Federal Systems are Many Types
Although many opinion writers acknowledge that federalism as a system of governance differs from one country to another, they fail to acknowledge the peculiarity of our adopted version of federalism as a natural consequence of our peculiar political and cultural ecosystem.
In the United States, for instance, the central government is referred to as the federal government. Federalism in the US was a result of the move by the founding fathers away from previous confederal union of semi-independent states, to a tighter union (the United States of America). In fact, in recent years, the US federal government powers have increased at the expense of powers exercised by the states. The state governors in the US are democratically elected as they are in South Sudan. The federal government controls one state (the District of Columbia). Attempts to surrender (more persuasive and makes sense) control of Juba metropolitan area to central government were stiffly resisted by Central Equatoria State.

In India, there are three types of lists for areas of jurisdiction for the central and state governments. The union list contains items on which Indian central government exercises exclusive jurisdiction; a concurrent list shared by both central and state governments (but if there is a conflict between two levels of government, the central government's jurisdictions prevail); and a third list, called state list containing items for states' jurisdictions. Furthermore, where national interests are threatened, the government of the Union of India can dissolve the entire state government. States of India do not enjoy equal representation in the Parliament but depend on demography. Doesn't it make sense to weigh in the population size of each ethnic group?
In Germany, the central government, also called the "federal government", is much stronger than the US federal government and many other known federations.  

In Australia, the states governors are appointed and not elected. Like India, there are powers for individual jurisdictions and others for common overlapping jurisdictions. The Central government is called Commonwealth government. A high court rules whenever conflict arises between states government and Commonwealth government. More often than not, and in many high level cases in recent years, the Australian high court ruled in favour of Commonwealth government. 

As we can see, there are varieties of federalist systems, each dictated by individual countries' needs with some similarities and differences here and there. The Western federal governments and their associated democratic and economic systems that are being emulated today everywhere are a creation of centuries of intellectual debate and political activism and governance that dates back to times of Socrates in Athens; Thomas Hobbes, John Locke in England, David Hume in Scotland; Montesquieu, Voltaire, Jean-Jaques Rouseau in France; Benjamin Franklin, Thomas Jefferson, and James Madison, Martin Luther King in the US; Karl Marx, and Emmanuel Kant in Germany; and list goes on to no end.

In contrast, most African systems of governance, including our own, are second hand models inspired by Western systems and values. Our systems of governance lack originality to the extent that they could be fairly described as "copy and paste" democracies that are yet to stand the test of time (with apologies to Justices John Luk). It will take us decades in South Sudan to internalize, implement, and test-drive these systems, and modify them as our experiences using them grow and mature with time.  
The fact that in South Sudan the President can remove an elected governor is not unique as is the case of India where the central government can dissolve the whole state government. Should we disagree, we need to amend such clauses in the next constitution after a thorough debate, while ensuring that a provision is made about the measures that would safeguard our sovereignty from actions of unruly state governments. It is an issue which cannot be left to chance in the constitution.   
The Way Forward
There is much unutilized capacity in our constitution, especially in regards to devolution of powers to lower levels of government and delivering services to our citizens through a devolved power. For instance, local government act 2009 has not been fully implemented and that is why we still have appointed county commissioners as opposed to elected commissioners. County legislative councils have not been set up due to financial constraints. The central government in Juba has been trying its best to be inclusive in the distribution of political power with appropriate regional representation; representation of women, religious minorities, special interest groups as such army and business sector, those with special needs, and other minorities such as Muslims.

As far this author is concerned, the structures and forms of an inclusive society and representative if equitable government systems with generous provisions for federalism are in place. The challenge at the moment is to give it a substance and how to fund these arrangements function as well as how the whole structure orchestra (from federal, to state, to local) can be made to play in constructive unison in order to deliver prosperity to all our citizens; from Raja to Pibor, and from Renk and Abyei to Nimule.

 Our strength lies in discovering our shared patriotism and history, and as African Sudanese and not fretting over our ethnic differences. This is an ideal for which we as the citizens of this great nation should live to realize, or die to defend.

Sunday, January 05, 2014

South Sudan: Making Sense of December the 15th, the Political Causes of the Unrest – Part 2

By John A. Akec

It is a daunting task trying to sum up in one article the myriad of political causes behind three weeks of catastrophic violence in South Sudan in which over a thousand lives have been lost, tens of thousands displaced, incalculable damage inflicted on the national economy, and human rights and security undermined by the parties involved in the conflict

In the part 1 of the series, the author had highlighted how the conflict was started based on firsthand accounts of the military generals in the army division of the Presidential Guards in which the shootout began on the night of December 15th 2013 at around 10:17 pm before spreading to other army divisions and thereafter to state of Unity, Jonglei, and Upper Nile.
This is the second and the last part of the article series.

Not a while ago, I noted that everywhere in the world, lessons of history are learned to build a safe pathway into the future, except in South Sudan where events take place and are soon forgotten. And that, in my view, is a big mistake. And as Professor Abraham Matoc Dhal of Rumbek University's College of Economic Studies recently noted: "History is not for nothing."

Not only history, but in author's view, anthropology matters also in understanding the root causes and parameters of ethnic conflicts.

Writing on Development Policy Forum, a policy discussion forum managed by Ebony Centre for Strategic Studies, a think-tank, Samson Wassara, a professor of political sciences at the University of Juba observed:
"The causes of the crisis are rooted in historical legacies of the long civil war that seemed to have ended by the signature of the Comprehensive Peace Agreement (CPA) in January [...] can be traced back to the event. But causes of the current crisis are associated with the past. "

Thus, in order to find our compass into the present quagmire, a glimpse into our distant and recent past will be an exercise worth doing, albeit imperfectly.  

Dinka is the largest single ethnic group in South Sudan. They exist in 7 out of 10 South Sudan states: Northern Bahr El Ghazal, Western Bahr El Ghazal, Warap, Lakes, Jongeli, Unity, Upper Nile state, in addition to Abyei. They total around 3.2 million strong according to South Sudan Population Census 2008 (excluding Abyei). The Dinka outnumber the Nuer by a factor of 2 to 1; namely, for every Nuer, there are two Dinka. The majority of Dinka are found in Northern Bahr El Ghazal, Warap, and Lakes staes. In Unity State, Dinka are minority occupying just 2 counties out of 9; while they have significant presence in Upper Nile where they occupy 4 counties out 13; and in Jonglei state, the Dinka occupy 4 counties out of 11.
The Nuer, on the other hand, is the second largest ethnic group in South Sudan. They are found in Unity, Upper Nile, and Jonglei states with a total population of about 1.6 million strong. In Unity state, they live in 7 counties out of 9 where they are the overwhelming majority. In Upper Nile state, the Nuer occupy 4 counties out of 13, and in Jonglei state, they have 5 counties out of 11.

Between them, the Dinka and Nuer make up 4.8 million or 57% of South Sudan population.
The two ethnic groups share common culture, have similar languages, and practice agro-pastoralist economy. The Nuer ethnographers include Edward Evans-Prichard (The Nuer: A Description of the Modes of Livelihood and Political Institutions of a Nilotic People, 1940),  and Sharon E. Hutchinson (Nuer Dilemas: Coping with Money, War, and State, 1996), while Dinka were studied by Francis Mading Deng (The Dinka People of the Sudan, 1972), Geoffrey Lienhardt (Divinity and the Experience: The Religion of the Dinka, 1961) , and John Ryle (Warriors of the White Nile: the Dinka, 1982), among others. It is worth referring to these works to gain some background understanding of the Dinka and Nuer norms.

In one of his papers (The Nuer of Southern Sudan, 1940), the British anthropologist Edward Evans-Pritchard, who also described the Nuer as "wild offshoot of Dinka", observed:
"Every Nuer, the product of hard upbringing, deeply democratic and easily aroused to violence, considers himself as good as his neighbour; and families and joint families, whilest coordinating their activities with those of their fellow villagers, regulate their affairs as pleased."

The above accolade-imparting observation has a worrying side to it, though; namely, being "easily aroused to violence" and being "deeply democratic" do not make for good bed-fellows for advancing democratic values when Nuer interact with other groups in the state, for example. Pritchard also noted that while the Nuer do not follow leaders, they can listen to their spiritual/religious leaders such spearmen and rain-makers. Ngundeng is a good example of influential religious leaders.

The same could have been said about the Dinka, except that Dinka, in my view, are relatively slow to provoke to violence, although many of them have aggressive tendencies when interacting with others. This is what many outsiders find intimidating to say the least. And once provoked, are not easy to stop. What is more, Dinka communities maintain communal leadership structures with clear lines of communication; and it is not just anybody in Dinka society is considered a leader.

Moreover, leaders in Dinka society are heeded and the Dinka believe that people, even within the same family, are "not as equal as sticks in a match box," or "have the same height as the herds of giraffes." It means some are considered wiser than others. Some people deserve more respect than others, because of their age, education, or social status, for example. This stratification of Dinka society has positive implications for the way peace is maintained, conflicts resolved, and on how the society is organised and led.

Traditionally, the Dinka and Nuer raided each others' borders for cattle rustling especially during the dry season from December to May each year. More often than not, when Dinka raids Nuerland, it is likely to be retaliation for a Nuer offence. However, in recent years, and with spread of small arms, the raids have become increasingly deadly, and more of Nuer's Dinka neighbours increasingly taking the initiative to rob Nuer's cattle instead of confining themselves to counter Nuer raids. And what is disturbing about all this is that rarely had the disputes been settled or have anyone been brought to justice for cattle rustling offences that frequently involve lost of life including the killing of women, children, and the elderly in cold blood.

The politicians and military personnel from the two groups have often collaborated fruitfully at certain times, and clashed destructively in other times. In Sudan history on anti-colonial movement, for example, both the Dinka and Nuer made significant contributions to resistance movement against the British colonial rule in Sudan. The White Brigade was founded and led by Ali Abdalatif, a Dinka by origin, who was the political leader of the first Sudanese anti-British movement, and Abdalfadheel El Maz, a Nuer by origin, historically noted for bravery and a military heroism, and as martyr of 1924 armed uprising against British rule in Sudan. This is not to say that only Dinka and Nuer were the only active ethnic groups in the anti-colonial movement.
Furthermore, in author's time, collaboration between two former Sudan army officers Kurbino Kuanyin Bol, a Dinka, and William Nyuon Beny, a Nuer; led to staging of a mutiny in 1983 in Bor and Ayod respectively, and marked the beginning of the second wave of North-South conflict led by Sudan People's Liberation Movement (SPLM) that ended with signing of Comprehensive Peace Agreement (CPA) in January 2005, and the declaration of South Sudan independence in July 2011.

And while there has never been a complete divide along ethnic lines, power struggle between leaders from Dinka and Nuer ethnicities has also involved a component of ethnicity when mobilising support base, or as the unintended consequence or a by-product of such power struggle.

For example, power struggle and clashes of visions pitted John Garang (a Dinka), Kuribino Kuanyin (Dinka), and William Nyuon (Nuer) of SPLM on one hand, against Samuel Gai Tut (Nuer), and Akuot Atem (Dinka) of Anya Nya II on the other hand during the early stages of founding of SPLM (1984-1985), and led to one of the first bloody splits within the leadership ranks in South Sudan resistance movement. The dispute over power eventually took ethnic line in which thousands of lives were lost, mostly in suppressing Nuer-led mutiny against SPLA which also resulted in the victimization of innocent Nuer civilians; and through revenge  killings carried out by Nuer militia against Dinka, irrespective of whether or not the Dinka victims are armed combatants or unarmed civilians.

The conflict in SPLA began with killing of Samuel Gai Tut in an ambush by a force loyal to John Garang in 1984 while Tut was on his way to a meeting to settle differences with Garang's group. After the death of Samuel Gai Tut, William Abdalla Chuol, a younger Nuer officer, took over the faction (Anya Nya II) after executing Akuot Atem, a Dinka compatriot of Samuel Gai Tut. This was followed by a massacre that claimed nearly 2,000 Dinka SPLA recruits from Greater Bahr El Ghazal en route to Ethiopia through Upper Nile. Abdalla Chuol was later assassinated by SPLA forces after leading a fierce counter insurgency against SPLA with the support of Khartoum government after his forces became known as government "friendly forces."  In pursuit of Nuer counter insurgents, SPLA committed many atrocities against Nuer civilian population which led to mass migration to North Sudan, and deepening the hatred between the two ethnic groups.

Furthermore, in 1991, Riek Machar broke away from SPLM and formed a faction known as SPLM-Nasir. Starting as a broad-based splinter group, Nasir Faction increasingly became an exclusive Nuer outfit, especially after Bor Masacre in 1991 in which 2,000 Dinka civilians were killed by Machar's forces. In 1997, Machar-led South Sudan Independence Movement (SSIM), as Nasir faction was later renamed, signed Khartoum Peace Agreement (KPA) with Sudan government.

Machar forces, that were predominantly Nuer, mounted serious counter insurgency against SPLA  and allowed the Sudan government to exploit the oil from South Sudan fields in Unity and Upper Nile, with catastrophic outcome for South Sudan liberation war. After the collapse of Khartoum Peace agreement, Riek Machar quit to sign an agreement with SPLM and was reintegrated with some of his forces in 2001.  Paulino Matip and other generals stayed behind in Khartoum until 2005 when CPA was concluded before reaching a new agreement with SPLM.

Professor Wassara noted recently that the agreement was not good enough:
"The cosmetic reconciliation between the SPLM/A leading to the signing of the CPA did not heal the wounds of the 1991 rift."
Yet this question remains: What actually constitutes reconciliation in what is increasingly ethnic-based power struggle?

After the signing of CPA and setting up of the government of South Sudan, anti-government militia activity in Unity, Upper Nile, and Jonglei that lacked clearly defined goals had continued unabated and posed security challenges to the nation. The solution has been amnesty and integration of militia leaders and their armies into the rank of SPLA, only for many of them to re-defect months or year later. The government continued to apply the same cure to militia problem and with the same results!
And despite all above, it would appear no one has internalized the root causes behind the Nuer unrest so as to identify more sustainable resolution.

It would be a grievous mistake to say that the re-integration of Dr. Riek Machar into SPLM in 2001, and giving him the second highest stake in the government after the president had done nothing to keep power dynamics between the two groups in check, leading to a peaceful conduct of referendum and standing up to Sudan's intransigence over the post-referendum issue.

It is worth mention that the Nuer were given great stakes in the government across the board the level of which is commensurate with their size in the population. And as vice president of the republic for 8 years, it is understandable that Dr. Machar of late has began to set his eyes on the top job and to explore the political landscape to identify any obstacle to his political ambitions. And he did find many.

First, Dr. Machar wanted the term of presidency reduced to two terms maximum in the South Sudan interim constitution, but that wish was not granted. Second, he wanted the vice president to be acting president should the position fall vacant until elections take place. Instead, the job goes to leader of national legislative assembly as in the constitution. Although he had wanted to be nominated as the leader of the house, he was not. Next Dr Machar strove to remove the clause in SPLM constitution that gives SPLM chairperson to nominate 5% members to NLC and at all other levels of the party. That was roundly voted down in the last NLC convention (128 against 8). Again Machar want the decisions to be made in NLC using secret ballot rather than the show of hand (hoping to give the shy members to make their genuine choice without fear of intimidation). That was also defeated by a majority vote. Machar expected for a more reconciliatory speech from the SPLM chairman at NLC convention, but he got none.
Small wonder, Machar and his group walked out of NLC convention Saturday afternoon, and never to return. And the rest is history.

"Machar should have known better that using ethnic means as a strategy to get power will have many unintendend consequences", said a former SPLA combatant. 

The most obvious thing that Dr. Machar could have done was to form his own party and contest the next election. Having come close to the front of the queue, the rules of the game were suddenly changed and Machar found himself thrown to the bottom of stairs; and then the stairs taken away. Instead of ballot, Machar went for bullet, with the intent to right those wrongs. Not a good choice.

At the moment, 55 to 60% of the army is Nuer, while they are 20% of population. And given the high defection rate among Nuer in recent conflict, the trust in members of Nuer in the armed forces has received a terrible bashing. One former SPLA general was quoted as saying: " the dilemma for South Sudan is either the constitution disallows the drafting of Nuer in the army, or give them their own country." This would sound extreme but minimizing risk of defection of Nuer in future would be a critical concern in the maintenance of national security.

It would require the passing of legislation to reorganize the army on the bases of the states representation and population size, including increasing the representation of Equatorians and other ethnic groups.
It is unlikely that Machar will win the war and compromise from warring parties would be necessary. International community can work to get the parties agree on transitional period to an internationally organised elections. Machar and group need a free space to promote their vision through peaceful democratic means.

The government also needs to reform the army to be more professional, representative of the whole population, and trustworthy. Compulsory military service should also be constituted for all below certain age to be agreed.

Security organs need strengthening and improve its technological capacity to detect crime and fight terrorism at the bud. Security holes created by non-registration of all mobile phone numbers needs to be addressed as a matter of national security.

And above all, the government needs to improve service delivery in areas of health, education, transportation, electricity, drinking water, and food security to the whole population. Those are the things that worth fighting for, and not on who should be the ruler.