QUOTING – Prices in USD kills SSP
By Gilo Jr. Okwata and John Agok
Two prominent economists and three civil society activists yesterday revealed that the absence of regional inter-banking system and the high demand for US dollars has kept the basic commodities prices sky-rocketing in the local market.
In separate interviews with Juba Monitor, they all echoed similar sentiments, saying without the inter-regional banking system where the local currency, the South Sudan Pound (SSP) could be used to trade and transact business; the demand will remain constant until the Central Bank finds a way to cushion the high demand of the USD.
The respondents were Dr. Charles Oyo Nyawello, Jame David Kolok, Edmund Yakani, Rajab Mohandis and one of the leading economists (name with-held). The latter said the demand is high because of vested interests in the neighbouring countries where locals are required to use USD for any business including school fees, hospital bills and up-keep in dollars instead of SSP.
He pointed out that forex bureaus were required to sell the USD to customers instead of buying, a practice which should be controlled and regulated by the Central Bank.
Dr. Nyawello, the author of newly launched book titled “Banking in the Economy” slammed the tendency of price tagging items including local basic commodities in USD claiming that it has killed the local currency, the South Sudanese Pound (SSP).
He blamed the constant hike in prices to quotation of dollars in transacting businesses locally.
In a separate take, Kolok told Juba Monitor that the continued tagging of basic items in USD was a disaster in waiting which the Central Bank should not take lightly and should act to tame the situation.
Central Bank is the regulator and controller of the market economy that can necessarily put a system for both commercial banks and forex bureaus to operate within guidance and advice from the government.
Speaking to media after the launching of his book on Saturday at Crown Hotel Dr. Nyawello the author and also the Judge in East African Court of Justice cautioned the government especially the Central Bank to set a strong system to control the rampant selling of dollars on the streets of Juba.
“It is too embarrassing for us and every foreigner moving on the street being stopped by buyers of dollars, and these transactions supposedly would have been happening in the banks, not on the street.” he said.
Dr. Nyawello also revealed that quoting prices of some essential commodities in dollar really affects our local currency.
“It is not acceptable in other countries to tag prices of some commodities in dollar than the country currency, this is weakening the SSP and our government through the “Central Bank” has to come in to rescue the ugly situation of our economy,” he added.
However, through interview with Juba Monitor, Jame David Kolok the Executive Director of Foundation for Democracy and Accountable Governance (FODAG) decried the tendencies of the Central Bank in handling the auctioning of dollars in a bid to stabilize Exchange rates through some specific Forex Bureaus.
“This is not the first time to hear that, the Central Bank has injected money into the market to stabilize the market prices which does not yield fruit anymore, sometimes such adverts by Central Bank are meant to look for eligible bidders from forexes “seems to be a deliberate attempt for advertisement intended to glorify the image of the Central Bank.”
“There could be a possibility that the Central Bank has advertised to fifty forex bureaus bidding for “this money” but at the end of the day, this money will be given to some few selected forex bureaus that are attributed or aligned to certain individuals who are part and parcel of Central Bank itself,” Kolok underscored.
Kolok blasted government officials’ corruption in the country and asked the officials to convince citizens only through transparency and accountability.
“South Sudan needs to address the vice of corruption, look at the way Central Bank directed money to some forexes. The dollar rate is not coming down simply because this claimed money at the end of the day will be deposited or given to only 15 and 20 forex bureaus that directly attributed within the same system from Central Bank.”
“What we need from the Central Bank is to come out clearly and state how much they are injecting in the market and which forex bureaus are selected so far out of 50 forexes advertised by Central Bank. This is the citizen’s call for transparency and accountability and for officials themselves to rule out corruption when doing this transparency,” he explained.
Kolok took swipe at frequent change of Central Bank Governors.
“Not even economists trained or from Oxford University or Harvard University can improve our economic situation by appointing them into office of Central Bank as the governors, neither this frequent changing of the bank’s governors can solve the economy’s downturn, it is only the government to embrace this peace and implement it later in truth, it will definitely bring stabilization in our economy. Fighting is ruining the economy through hands of warlords and corrupt officials who are benefiting through such conflicts. And evidence is written on the walls of the country,” he concluded.
Kolok further said that to stabilize the country’s economy, the private sectors should be built and strengthened other than injecting money into forex bureaus in the name of stabilizing the market prices.
The activist was responding to some questions asked in response to last week’s presser by the bank’s Governor and on views of ordinary people on the streets of Juba.
Edmund Yakani the Executive Director of Community Empowerment for Progress Organization (CEPO) concurred with his counterpart’s assessment that money injected into the economy goes to certain individual pockets and forex bureaus affiliated to politicians with close connections to Central Bank high echelon.
“The reason why citizens are not feeling the effect is because this money is not injected into the economic sector, it is rather injected into Forex bureaus that are owned by politicians who reserve this money to resolve their personal demands rather than the local markets. Even if a billion dollars is injected, with this particular approach, we will not succeed,” Yakani stated.
Rajab Mohandis, the Executive Director of Organization for Responsive Governance (ORG) stated that the most unfortunate scenario for the country currently is trying to address the problem in parts but not in a simultaneous and comprehensive manner.
“Economic crisis in South Sudan is as a result of conflicts in the country, in fact the right word to say is that the economy has long collapsed. The economy is just a victim of conflict. You can not address the crisis by injecting dollars just like that, you need to go back to the root causes where it began. If conflict is not addressed to improve the business environment, promote investment and production, there is no way we can fix the economy,” Rajab stated.
Dr. Nyawello is the author of the book titled “Banking in the Economy”, designed and published in South Sudan by Konoro Enterprises Company Limited.
He is the senior lecturer, faculty of law at Star International University Juba Campus. He also taught Economic and Law in the University of Bahr el Ghazal and various institutions of higher learning in the past.
The launch was attended by over twenty invited guests from various institutions where as the main relevant institutions turned down their invitations according to Dr. Charles during his remarks.