It may not be feasible for South Sudan to immediately join the monetary union, as a member of the East African Community, according to a research group.

The East African Monetary Union is a stage in the process of East African Community Regional Integration which requires member countries to use the same currency.

Before achieving a common currency, the EAC member states are required to unite their monetary and fiscal policies.

They are also required to unite their financial accounting and reporting systems; standards on statistical information; and, establish an East African Central Bank.

The International Growth Center says joining the East African Monetary Union should not be the priority of South Sudan at its beginning due to the current economic situation.

In September this year, South Sudan deposited its accession instruments to the East African Community, making it a fully-fledged member.

In this context, the International Growth Center says South Sudan will be required to implement the provisions of the Customs Union and Common Market Protocols.

At the same time, it will now also partake in the negotiations on the forthcoming East African Monetary Union, scheduled to be implemented in 2024.

In a report, the IGC says South Sudan is currently facing a continuously worsening economy.

“Whilst the 5 (Kenya, Uganda Tanzania, Rwanda and Burundi) other member states rely on commodity exports and import oil, South Sudan’s economy is nearly wholly dependent on oil export,” it says.

“External economic shocks that affect the oil prices, therefore, will have the opposite effect on South Sudan compared to its member states,” it warns.

It says South Sudan should focus on restoring stability in its macro-economy.

“Peace can bring about the restoration of normal governance.  Normal governance would allow the cabinet to put in place a macroeconomic program with realistic fiscal targets that would limit borrowing to those funds that can be contractually borrowed abroad and monetary targets that would not be inflationary,” it states.

This would only be possible after restoration of peace in the country through full cessation of hostilities and restoration of discipline in the fiscal and monetary policies.

But for now, the IGC argues that the current economic and political situation make it unlikely that it will be feasible or desirable for South Sudan to join the union.