banking

Government says all transactions to be made in local currency

October 19, 2020

The South Sudan Council of Ministers on Friday adopted a resolution that all payments in the country should be made in the local currency, according to Information Minister Michael Makuei.

The move is part of efforts to overcome a crippling economic crisis. The local currency, the South Sudanese pound, has tumbled rapidly, driving prices of commodities higher.

The South Sudan economy, which relies almost exclusively on oil revenues, has been shattered by several years of civil war and this coupled with the disruptions caused by the COVID-19 pandemic has led to a drastic drop in oil prices.

“The ministry of finance is to make all payment obligations in local currency because this is one of the major problems,” Michael Makuei said. “All the contracts that are made, even rental houses, rental cars, rental what, everything here in South Sudan is in hard currency. Why should we use the hard currency at a time when we have our national currency?” He asked.

Makuei reiterated that all contracts are supposed to be in national currency, not in dollars, “houses are rented, when you go to the landlord he will tell you I want dollars. You want to hire a car, he will say I want dollars. Even the water from the river will soon be sold to us in dollars. If you go to any hotel, you must pay in dollars.”

“All these are problems that are created and this is why this committee has recommended that all the transactions inside South Sudan should be by local currency except for exceptional circumstances like embassies, those going abroad, and so forth,” Makuei added.

He said that all transactions should be done through the banks because this will help in controlling the economic crisis.

Makuei, who is also the government spokesman, said the cabinet listened to the report of the ad hoc committee which was chaired by Cabinet Affairs Minister, Dr. Martin Elia Lomuro. The committee was set up to look into the potential ways by which South Sudan can tackle the main drivers of currency depreciation and inflation in the country.

“The first part talked about measures to reform and strengthen the ministry of finance and planning. Part two deals with measures to reform and capacitate the Bank of South Sudan to combat the main drivers of South Sudan currency depreciation and inflation,” Makuei said.

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