South Sudan inflation doubles to 41 pct on soaring food prices

Reuters, Monday 10 Dec 2012

South Sudan's inflation rate doubles to 41 per cent, as its import-based economy continues to struggle

Inflation in import-dependant South Sudan shot up to 41 percent in November from 21.5 percent in October, increasing the urgency of sealing a peace deal to get its oil exports flowing again.

South Sudan won independence from Sudan in July 2011 after one of Africa's longest civil wars, but a dispute between the two shut down the South's oil industry in January, which usually makes up 98 percent of its state income.

One of the world's least developed nations, South Sudan needs to import almost everything. A top official said in August the central bank had currency reserves worth $300 million but diplomats question how long the country can hold out without oil revenues.

November's doubling of annual inflation is increasing the hardship for normal people tired after decades of conflict and war with Sudan. The South Sudanese pound has lost around a quarter of its value against the dollar since January.

More than a third of the 8 million South Sudanese will need food assistance this year, according to the United Nations. The country also needs to cope with more than 100,000 refugees who fled fighting in Sudan's borderlands.

There have been no large protests over food price increases with most people blaming Sudan for their hardship.

Some local analysts say inflation is actually higher than the official figures, especially in northern areas which used to get supplied from Sudan until the border got closed last year. Annual inflation in Malakal near the Sudan border was 53.5 percent in November, well above the national average.

On a national level, the cost of food and non-alcoholic beverages, which make up almost 72 percent of the index, rose by 42.7 percent year-on-year, official data showed on Monday. The cost for alcoholic drinks and tobacco rose 135.6 percent.

Month-on-month the consumer price index was up 19.2 percent in November, the National Bureau of Statistics said.

In September, the two sides signed trade and oil deals to resume oil exports from the landlocked South though Sudan but both have been unable so far to set up a demilitarized border zone as condition for oil flows.

Stalled talks have delayed the resumption for oil exports which had been expected for the end of the year.

Both countries still need to reopen the border as agreed in September, the United Nations said last month. Cross-border trade had largely stopped ahead of South Sudan's secession, severing historic supply routes to the north.

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