COVID-19, poverty strip consumers of purchasing power – economist

A senior economic analyst has said lack of money in circulation and the COVID-19-triggered economic pinch have resulted in low consumer purchasing power in Juba.

On Monday, traders in Juba complained of a lack of buyers despite the decrease in prices of commodities in the market.

They said since the lifting of the strike by the foreign truck drivers, the prices of goods have significantly dropped compared to the last months. But this has come with its fair share of downside- the lack of buyers.

“Things have changed for the better. The prices have dropped but I do not know what is happening, whether people are not having money or what? There are no customers,” Abdullah Azizi, a businessman at Konyokonyo Market said.

Azizi said the situation was worsening and sometimes he receives only three to five customers. Worst of it comes where some traders even spend the whole day without customers.

Dr. Abraham Maliet Mamer, a senior economist confirmed that people were not purchasing goods as they did before because they did not have cash at hand.

“It is not a surprise. [It’s] normal when such a situation happens, that means people do not have money, they do not buy, simple as that.”

“So when the purchasing power drops and keeps on dropping, that means people are not making or getting money, you cannot spend what you do not have and this comes to sources where people get money from,” Abraham said.

The economist explained that most people who work in the government have not received their pays for some months. This, he said, leaves them with nothing to spend.

“You are in a country where civil servants are going some months without pay, even if they are paid, the value of that money cannot do anything so it is not something that can surprise the traders,” he added.

He hinted that other factors contributing to the low purchasing powers in the country include the impact of the COVID-19 pandemic.

COVID impacts

Dr. Abraham stressed that the COVID-19 itself is one of the factors affecting the purchasing powers of the buyers in the country.

He said most people in South Sudan have been benefiting from their relatives who are in the diaspora such as the United States, Australia, and Canada.

“Those South Sudanese leaving in the diaspora in the USA, Australia, Canada, and rest of the world normally remit money to their families and friends back home,” he stated.

“So recently there were reports by the African Union that African diaspora remittance has dropped from $6billion to $4billion due to the coronavirus pandemic,” Dr. Abraham revealed.

 The report titled, “African regional review of the implementation of the Global Compact for Safe, Orderly and Regular Migration,” was produced by the Economic Commission for Africa (ECA) in partnership with the African Union Commission (AUC).

It builds from four sub-regional reports compiled by AUC and a summary from stakeholder consultations at the just concluded 2021 African regional review meeting on the Global Compact for Migration (August 26 to September 1, Morocco).

Remittances to African countries are expected to decrease by 5.4 percent from $44 billion in 2020 to a projected total of $41 billion in 2021, due to the effects of the Covid-19 pandemic, according to findings of the Continental Migration Report 2021.

The economist stressed the other reason could be that people started understanding that they can live on their own.

He said due to the relative peace in parts of the country, many households have moved to their villages to cultivate for themselves.

“Especially vegetables, most of them have been coming from Uganda, but now we are seen they are now being produced in the country. This could be one of the factors,” Dr. Abraham said.

“But the main factor is that there is no money, the government is not paying salaries, the government may not be paying contracts where companies get sub-contracts and get payment later,” he stated.

 Dr. Abraham said the market is always not constant and the buyers will buy whenever they have enough to spend.