Economist lobbies for bank to save battered SSP
Bank of South Sudan should control the flow of currency to protect the Pound against the dollar, an economist has advised.
Abraham Maliet Mamer, is advocating for the use of banking system for payment of salaries to save the economy from slump.
He argued that shifting the mode of payment from cash to banking system can help solved the problem.
Mamer stated that exchange rate snag was occasioned by the payment of employees and clients in hard currency which made dollar to strengthen against local currency.
“That’s why the dollar went up so quickly, you remember when this team came, and dollar was SSP 420 against 1 USD. So, now there is almost 50 per cent increase and if it goes this way, before the end of this year, you will be counting a thousand per dollar.”
“Intervention is what is required from both the Central Bank and the ministry of finance. And if they don’t do it soon, then everything now will go up and we will not be able to afford our daily bread.”
“What I recommend is first of all, when you are paying, you need to go back to the banking system. Don’t pay people in cash. Transfer the money to bank accounts of these people. If some of these people were outsourcing some of these contracts, then you pay into their bank accounts so they don’t have cash. You have to control cash by using the banking system,” Mamer advised.
He added that loans should be consolidated into a single bank account and that countries that trade with South Sudan in oil should pay money into that account only.
“Then now you are able to control your inflow of cash. But if you do the way we are doing it, then we are going to take loans from various people, those guys are going to charge us different interest rate and then we are not able to pay them on time. Then these people come and you pay them, you pump out the pound and then you lose the value. We need to have some control measures.”
He called on the two institutions to consult with experts and ensure that the decisions made are based on their input.
There had been an outcry as commodity prices continue to hike and South Sudanese Pounds weakens against US Dollar.
Last month, the Minister of Finance, Agak Achuil Lual, blamed high prices on illegal taxes, adding that traders incur exorbitant charges.
“Most of the prices are going up because of the war between Ukraine and Russia. This has affected fuel prices because refined [oil] products have gone up and the food prices that we import from other countries are coming in at higher prices.