South Sudan to introduce new currency to fight hyper-inflation
October 10, 2020
By Deng Machol
Juba – South Sudan’s government has resolved to replace the South Sudanese Pound with a new currency to mitigate soaring hyperinflation and help recover the ailing economy in the fragile country.
The decision was reached on Friday during cabinet meeting chaired by President Salva Kiir in Juba.
It is not clear what type of currency that South Sudan wants to introduce.
The South Sudanese Pounds has been depreciating drastically following the drop of the country’s oil revenues and irregularities in the collection of non-oil revenue.
Last month, the minister of trade and industry said there is nothing the government can do to stop the local currency from losing value.
This comes after the Central Bank of South Sudan had said the Bank had run out of foreign reserves.
President Salva Kiir then formed an economic crisis management committee to devise ways of revitalizing the economy.
As one of the measures, the economic committee reportedly proposed changing the currency, saying many people are hoarding money in their houses.
“The cabinet has decided that the currency should be changed so that anybody who does not take his money to the bank is left out and they will lose their money,” the government spokesperson, Michael Makuei, told the press on Friday.
“So this is an advice to those who are hoarding South Sudanese money in their houses to hurry [and take] them to the banks. Put them into the banks so that you don’t lose them. Put them into the banks as of now so that you avoid queuing up when the time comes for changing the currency,” he added.
This week, 1 US dollar sells at about 500 South Sudanese Pounds in the black market, while at the Central Bank, $1 dollar sells at 160 pounds.
Consumers have complained of a sharp rise in the prices of basic commodities while traders have also raised concerns over their inability to access hard currency for importing goods.
It is not clear how and when the decision will be effected.
However, the government spokesperson noted that the committee has been tasked to study the plan and report to the cabinet in seven days.
“More decisions will be taken next week when the committee finalizes its work to that effect,” he said.
“This is in order to improve our economic situation and the worse part of it is that our people have been spoiled and they don’t work. They’re accustomed to spoon-feeding and this is why the economy is in the hands of others. This is serious and our people are asked to work,” Makuei added.
The country’s economists have repeatedly called for structural and institutional reforms to address the country’s economic woes.
The government stated that the idea aims to improve economic challenges.
Reacting to this move, a South Sudanese observers said that the introduction of a new currency will not improve the country’s economy.
“Changing the currency is not going to be the solution for this economic’s crisis. The problem is not with the currency, the problem is with the way our economy is being managed by the leaders,” said Garang Atem, 40-year old, resident of Juba city.
Instead of changing the currency, the observers urges the government to come up with strategies on how to reform the economy situation in the country.
South Sudan, which relies almost exclusively on oil revenues, has not paid civil servants for several months due to a parlous state of its finances.
The country was just emerging from the five-year conflict that has killed nearly 400,000 people and uprooted four million people from their homes.
More so, it is not clear, how this will be possible with current violence, flooding that cutoff road accessibility and COVID-19 restrictions to reaches all Country.
Nkemnji Global Tech
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