In Africa, the mobile phone comes first before even food— except in South Sudan

MTN to cut jobs in Africa's youngest nation amid economic crisis spurred by war--showing just how bad things there are.

THE story of mobile telephony growth in Africa can be compelling—playing the dual role of creating opportunity and mitigating social exclusion.

According to this study, most of Kenya’s poor would rather cut back on food expenses or walk to work than lack airtime—an operational phone may create more avenues to make more money.

In South Africa, poor residents would happily shell out cash for an expensive phone, even if it perpetually has no airtime or charge.

According to research, owning the phone was not a means to an end, but the end itself, serving as a “great equaliser” by allowing them to own a similar device as more affluent people.

But in South Sudan, the effects of the political crisis have been bad enough to transcend any of the two needs.

MTN South Sudan, a unit of Africa’s biggest mobile-phone company, has said it is cutting jobs and canceling expansion plans as the war-torn nation battles an economic crisis.

The workforce will be reduced from 170 people to just over 80, while plans to construct 40 communication towers have been shelved, according to Khumbulani Dhlomo, the company’s head of corporate services.

The company has invested as much as $170 million in the country over the past two years, without seeing profit, he told reporters Tuesday in the capital, Juba.

“We have seen a decrease in our customer base,” he said. “People now have to choose between buying a phone, buying airtime and buying bread.”

And the balance has tilted in favour of buying food, as a conflict that has claimed tens of thousands of people and given rise to the most macabre of war narratives continues to rumble, propped up an international community that has increasingly grown wary following the reticence of its leaders.

In the two years since war erupted in December 2013, oil-producing South Sudan has seen its currency collapse and inflation surge since conflict erupted in December 2013 and curbed crude output.

The International Monetary Fund projected the economy would contract 5.3 percent last year. The landlocked country has sub-Saharan Africa’s third-largest crude reserves and currently pumps about 160,000 barrels a day.

“The biggest challenge is the exchange rate of the US dollars,” Dhlomo said. “It’s either the US dollars are too expensive for the company or not there.”

—Additional reporting by Bloomberg

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