Dear Friend,
Five Talents program participants and trainers will likely face more economic challenges in the coming year.
According to the World Bank, Sub Saharan Africa, where Five Talents works, accounts for about 60% of the world’s extreme poor. Inflation is hitting this region that is already struggling even harder. It’s akin to throwing an extra weight to someone who is just barely treading water.
"Emerging and developing countries are facing a multi-year period of slow growth… Weakness in growth and business investment will compound the already-devastating reversals in education, health, poverty, and infrastructure and the increasing demands from climate change,” said World Bank Group President David Malpass.
Double-digit inflation rates hit some of our Five Talents countries particularly hard as fuel and other costs made it more expensive for our trainers to do their work, not to mention the higher cost of living for our program participants and in-country trainers and the rapidly dropping value of currency.
2023 Inflation rates for Five Talents countries in Africa were roughly as follows:
11% - Democratic Republic of Congo
16% - Burundi
28% - South Sudan
Since 2013, the economy of South Sudan has experienced a double whammy - a state of hyper-inflation and of ongoing conflict. In 2013, the value of the South Sudanese Pound (SSP) was 6 to $1. Now the value is around 950 SSP to $1 on the informal market. More acutely, in the last year, the SSP has devalued by more than 100%. It is harder to incentivize people in Savings Groups to save regularly if their cash savings lose value. Even a small drop in the value of the local currency is significant to the poor, let alone a period of acute hyperinflation.
Our program has had to consider ways to help Savings Groups manage periods of hyperinflation until the economy finds more stability. These strategies have included productively investing group cash in assets so that it keeps its value, or working with groups to convert their savings into a more stable currency such as US dollars.
Higher inflation makes Five Talents mission to reduce poverty through entrepreneurship all the more needed. We hope to increase the number of people we serve in the coming year thanks to your generous and ongoing support.
