RECORD INFLATION HITS NEW COUNTRY
While Ugandans are pondering the impact of a 30.5 percent inflation rate, across the Northern border in South Sudan the situation is much grimmer, it was learned earlier in the week. Driven by food prices and the cost of fuel, something the country has to import inspite of being a producer and exporter of crude oil, inflation has now reached 71.7 percent according to statistics availed by a regular source in Juba.
Making the situation worse is an ongoing short supply in hard currency which makes trading and importation of food and other goods difficult, as orders need to be paid in Dollars even when originating from neighbouring countries like Uganda and Kenya.
Food production for the fast growing population in South Sudan is said to be below capacity, fueling fears that the situation will get worse next year, as adverse weather conditions are already impacting on current harvests but will have a greater impact in 2012.
Foreign investment is also said to be slow in the face of concerns over legislative and regulatory uncertainties, which keeps institutional investors worried over legal safeguards, while the absence of a broad investment incentive regime and public rows over land ownership have put more brakes on the processes. Ongoing security issues and the threat of renewed conflict with the former slave masters in Khartoum have also done little to inspire confidence in the immediate future of Africas youngest country, as disputes rage across the border in areas claimed by the South but occupied by the North, like South Kordofan, Blue Nile and Abyei, where widespread ethnic cleansing has led to a renewed flood of refugees into the South Sudan. Challenging times ahead for sure.