Finance and Development-Final Project

Poverty Reduction in Sudan

Poverty reduction in South Sudan is the issue at hand because I believe with poverty reduction there is economic and social stability. Poverty is endemic in South Sudan as 80% of the population is living on less than US$1 per day (Shimeles & Verdier-Chouchane, 2012). This is worsened by low literacy levels, boarder disputes, gender inequality, limited access to basic facilities, poor infrastructure and weak institutions.

Picture 1: South Sudanese woman and childreni

Despite this, it is endowed with natural resources such as the Nile River that can facilitate trade, administration and urbanization. It has oil, gold, silver, iron ore and copper. It has fertile lands that can grow cassava, ground nuts, sweet potatoes, sorghum, sesame, Maize, rice, finger millet, cowpeas and beans (UNDP, 2017).

Picture 2: Plastic bottles eventually find their way to the Nile Riverii

For South Sudan to get out of this situation there are certain areas that need to be transformed and emphasized: There is need for improved governance and investor confidence. This can be

i Guvele C, Faki H, Nur E, Abdelfattah H and Aw-Hassan (2012). A Poverty Assessment Southern Sudan, Poverty Assessment and Mapping in Sudan Part 2, ICARDA.ii Ibd.UNDP (2017) About Sudan. www.ss.undp.org

done by engaging policy makers to build capacity and strengthen the institutions charged with implementing the change.

Public-Private collaboration is needed to invest in infrastructure. This can be done by government guaranteeing the investors to repay their debt from the lenders since it’s a big investment that needs a lot of money yet has a lot of risks. The African Development Bank (ADB) is also focusing on infrastructural projects hence can be approached considering this has been a conflict area and is just trying to stabilize and put systems in place. This infrastructure will not only boost commercial agriculture but will increase on domestic resources since this can promote commercial agriculture by the produce transported to towns and even exported to the neighboring countries. It will also reduce on importation of food.

Government needs to upgrade financial literacy, capacity and creativity because there is a knowledge and data gap which discourages investors to enter the market. For example potential investors may not know that south Sudan has a variety of minerals since it’s mainly considered an oil producing country. This can be done with the help of the World Bank that is committed to broker exchange of knowledge between public and private investors.

South Sudan being a conflict area, attracting foreign investors is very hard. Therefore there is need to invest in agriculture since it has a lot of potential. There is need to diversify and change from entirely relying on rain fed and invest in irrigation farming since they have the Nile river traversing most of the areas in the country. This can be worked upon by sourcing a loan from the Multilateral Development Banks since it’s a big project with long-term profits.

There are a lot of South Sudanese people that have migrated to neighboring countries. This has increased illegal flows of finances and stolen assets outside the country. This reduces the domestic resources and affects the countries tax collections. Therefore, there is need to revise the tax policies if any to be supported with proper tax administration. Tax holidays and exemptions on investors have to be revised. Proper assessment of the projects and investments has to be done before tax exemptions are given. More tax collections will be made and the resources invested in other public services such as health and education since their situation is also wanting.

It is important to note that South Sudan’s stability has been slow and hence the investment climate isn’t stable as well. This threatens and scares away investors and business people who would contribute to its economic growth and poverty reduction. Therefore there is need to create stability and check on their processes with regard to registration of investments, acquisition of land, and above all provides security. This can attract the neighboring countries to invest.

With the above different issues worked upon, I believe South Sudan will not only have a stable economy but will achieve the Sustainable Development Goal of reducing poverty levels in the country.

References

Abebe Shimeles and Audrey Verdier-Chouchane (2012) Poverty Situation and Prospects in South Sudan. AFRICAN DEVELOPMENT BANK. African Economic Brief Vol.3 (8)