Juba, March 22, 2015 (SSNA) -- The United Nations (UN) has warned that the overall economy of the Republic of South Sudan is at its final stage of collapse as the new country began printing money since December of last year.
UN’s top humanitarian official in South Sudan, Toby Lanzer, on Tuesday warned that the economy could get worse as the young nation goes on printing rampage—printing money in an attempt to try to “meet a budget shortfall.” Lanzer also revealed that South Sudan’s central bank started printing money late last year.
“Since December South Sudan's government has resorted to the old trick of printing money,” Lanzer told reporters at a news conference in Juba.
"Printing money when there is nothing to back the value of that currency usually leads to hyperinflation,” he warned.
Many experts agreed that the continuous delay of salaries of civil servants and some central government employees is also a result of a vanishing economy.
South Sudan depends heavily on oil revenues and the price of crude oil has fallen, forcing many investors to withdraw their financial backings for fear of an economic collapse amid raging civil war.
Early last year, government officials stormed out of a meeting in Juba after oil investors, mostly Chinese and Malaysian companies refused to lend huge amount of money to Juba.
However, in May 2014, Juba was able to borrow $200 million from an unnamed Chinese oil company. In the same month, South Sudan began a process of repayments delay on nearly all domestic loans, raising many questions and put the young nation’s economy capability into question.
In February, an official with the Ministry of Petroleum and Mining told the South Sudan News Agency (SSNA) that oil export has been declining and that Juba is anxious about both the decline of oil production and current market price. The official further disclosed that March delivery is 4.6 million barrels of Dar Blend crude oil, down two hundred thousand barrels (just over 4%), compared to last month delivery of 4.8 million barrels.
South Sudanese President Salva Kiir at a political rally on Wednesday admitted that his nation economy faces serious problems.