Why the South Sudanese pound (SSP) continues to depreciates against the United States Dollar ($USD).
By Mathew Puoch,
December 08, 2019(Nyamilepedia) — Since the inception of South Sudan independence on 9th July 2011, the South Sudanese Pound (SSP) became the most and highly stable currency in Eastern and Central Africa if not the entire Continent. I once changed $USD 500 in Juba town in 2012 where I can only receives SSP 2,000. I remember vividly casting this amount into the required shape and have it in my pocket. It was never much unlike today in juba where $USD 500 can be carried in polythene paper because of the depreciating values of SSP. The second currency affected by hyperinflation after the Zimbabwe Dollars in 2009, I guess.
From the economic perspectives, inflation is manageable and there is always a choice to make it; the central Bank of South Sudan. However, someone is sleeping on the job or there is existence of an institution not executing its role to regulate this skyrocketing of prices of goods and service in the Country. In the year 2011 after the attainment of South Sudan Independence, the country was to improves its ravaged economy over the last 21 years of civil war; not mentioning the poor infrastructures and institutions in the newly established 55th State of Black Africans in the Continent. According to Pitia (2019), the official exchange rates in the central Bank stands at 42% until the darkest night of December 2013 when the driving force of creating new state was no longer to create viable and prosperous South Sudan; but power wrangles between the ruling elites.
Since the Central Bank of South Sudan has the sole responsibility of regulating the economy, the expectation of the citizens is high on this independent institution. In fact, the Bank has its own Act and framework to maintain its independence and discretion in regards to economy. It is stated that the Central Bank “shall not be influenced by any other institution whether being public or private owned while exercising its duties” (Bank of South Sudan Act, 2011). In contrary to this Act 2011, the Black-Market has influenced the economy in the country. In 2013 and 2015, the Central Bank of South Sudan adopted the “Black-Market rates” resulting into further increase of exchanges rates by Vendors of the Black-Marker (Pitia, 2019). This has posed negative views of the citizens on independency of the Central Bank in the Country. The bottom-line here is that neither Central Bank of South Sudan nor Government of South Sudan Cares to regulates the current inflation in the country. Could that means Government conspired with the Central Bank to further the sufferings of the South Sudanese people in the Country?
The high Government spending in the Country also imposed a great danger in the context of inflation in the country. This is demonstrated in funding of the civil war which has resulted into more money in circulation leading to general increase in prices for goods and services in the country. Due to weak fiscal policy currently, taxation is poorly runs with more bribery in terms of excise duty and customs duty at the entry ports into the country. This action by the Government officers will prompt traders to sells their products at high cost in order to get profits through forward shifting of the taxes to the poor citizens of South Sudan.
When you walk in the street of Juba, you could see cow dungs in the well tarmacked roads meant for vehicles. Can you imagine building roads for cows: but not vehicles in a hard won independence state for 21 years? This is the result of hyperinflation in the country because citizens cannot even afford to buy fuels due to low living standards in the country. I once told a friend that “Cow dung” in tarmacked road is an indicator of economic collapse of a state. This has now materialized in Juba and the only way is to restore peace and stability so that the institutions operate independently without political repercussion. Failure of Central Bank to execute its mandate in regulating economy without political interference and reduction in Government policy will continue to weaken the South Sudanese Pounds (SSP).
The writer is a concern citizen of South Sudan, Holder of Diploma in Business Management (Finance), International Computer Driving License (ICDL), Upcoming Financial Analyst and Currently Finalist Student of Bachelor of Commerce at St. Paul’s University in Nairobi and can be reach at Mathewpuoch@gmail.com
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