S. Sudan changes currency to force hoarders to release cash
What you need to know:
- Information Minister Michael Makuei told journalists in Juba that the council reached the resolution following proposals from local banks on how to rescue the economy.
- In August, Central Bank’s Second Deputy Governor, Daniel Kech Pouch, said the financial institution had run out of foreign reserves but Governor Jamal Abdallah Wani denied the report.
South Sudan’s Council of Ministers has approved a change of currency in an attempt to find hoarded cash it claims is aiding the economic decline.
Information Minister Michael Makuei told journalists in Juba that the council reached the resolution following proposals from local banks on how to rescue the economy.
“One of the reports was that most of the citizens are hoarding currency in their houses for several reasons. Some fear that if they take their money to the bank, it will be confiscated,” he said.
“The Cabinet has decided that the currency should be changed so that anybody who doesn’t take money to the bank is left out and loses it. Those hoarding money in their houses are advised to take it to the bank.”
The Cabinet also formed a select committee made up of the Cabinet Affairs, Trade and Higher education ministers, Central Bank governor and representatives of commercial banks to study six papers presented by financial institutions highlighting problems affecting the economy.
“The committee is tasked with deliberating on issues contributing to the economic downfall and coming up with one the clear policy aimed at addressing [it]. It is expected to report outcomes in next week’s Cabinet meeting” he Mr Makuei said.
In August, Central Bank’s Second Deputy Governor, Daniel Kech Pouch, said the financial institution had run out of foreign reserves but Governor Jamal Abdallah Wani denied the report.
That same month, the Trade minister said there is nothing the government can do to stop the local currency from losing value.
South Sudan’s economy has been devastated by several factors since its independence in 2011.
Years of a civil war, a drop in global oil prices and the Covid-19 pandemic have brought the young economy to its knees.
Before the conflict and the pandemic, South Sudan was drilling over 250,000 barrels of crude oil per day but this has now dropped to 180,000.
Last month, the UNHRC accused some politicians and senior government officials of embezzling at least $36 million since 2016.
The report came weeks after President Salva Kiir sacked the Finance and Economic Planning minster as well as top officials in the country’s revenue and oil management offices, in sweeping changes that followed an economic crisis.
President Kiir’s move came days after a prominent civil society activist asked him to suspend heads of revenue-generating institutions implicated in corruption reports by the Crisis Management Committee, for the sake of investigations.
Mid September, the Economic Crisis Management Committee recommended removal of the Director-General of Customs Service, Major-General Ayii Akol, after his juniors accused him of corruption.
The committee also said it discovered that $3.1 million WAS missing at the Directorate of Nationalities Passport and Immigration.
It further accused the traffic police headquarters of not accounting for funds collected through issuing number plates, licenses, and logbooks.
That same month, the former Commissioner-General of the National Revenue Authority informed Parliament that the country had lost almost forty billion South Sudanese pounds in the previous three months alone..
In August 2017, South Sudan said it was considering a currency change to help fight corruption.
A technocrat in the National Assembly said the House was appalled by the Central Bank’s report about a cash shortage in banks, blamed on some corrupt politicians and military generals.
Some of the corrupt generals and politicians, the report claimed, buried the money in their compounds, making it impossible to pay civil servants on time.
Details did not surface on why the government did not implement the plan.