South Sudanese Pound loses further value against U.S. dollar
April 12, 2017 (JUBA) – South Sudanese Pound (SSP) depreciated further against the United States Dollar (USD) in the second week of April, triggering hikes of market commodities.
$1 USD fetches SSP 146 on the black-market, up from $1USD for SSP 135 in the first week of April. Traders have attributed the increase to the Christian Easter holidays.
“Many people are purchasing United States dollars to send to their families for holidays in East Africa and those who receive their salaries in dollars are not selling because they are likely to spend the festival season with their families outside South Sudan,” a South Sudanese economist asking to be identified as John said.
Black-market dealers credit the economy’s deterioration to the government, who fail to boost the local circulation of money and pay civil servants timely.
“So money is just circulating in the hands of a few top politicians, those who have the connections to get from the Central Bank (of South Sudan) and send to their families. Everyone else is suffering in silence,” said Kun Majok, a black-market dealer.
On Tuesday, Jubek State civil servants, led by the workers union, stormed the office state ministry of labour and demand three months wages and an increment.
“We have not been paid for three months, since January this year (2017) and you are expecting us to continue to work,” said Andrea Felix, a state employee who claimed to have not been going to work for the past two weeks.
“It doesn’t make any difference at all. Whether you go to work, spending your small savings on transport, buying water in town or staying away from work,” said Felix.
Central Bank of South Sudan and the Ministry of Finance abandoned the fixed exchange rate in December 2015 from $1USD to SSP 2.96. The exchange has since doubled several times, with some economists estimating that the SSP lost more than 90% of its value since December 2015.
The inflation rate is estimated at 900%, one of the highest in the world. However, government employees, including teachers, health workers and other professional receive between SSP 600 and SSP 2,000 or $4 to $13 on the current black-market exchange rate.
President Salva Kiir fired both Central Bank governor and Minister of Finance last year and appointed new replacements with the hope of improving the economy but the situation continues to deteriorate.
“The situation will continue to worsen unless the government addresses corruption in the oil sector, designs clear and well managed local taxes and customs duties,” said an employee in the National Ministry of Finance, requesting anonymity to speak freely.
South Sudan depends on oil sales for 90% of the revenue but the low global oil price means less US dollars is received monthly. The finance official said the behaviour of tax collectors and senior government politicians has not changed for better.
“We are still in the same situation, where customs officials spend revenue and oil money as they wish, small as it might be, it is mismanaged,” he added.
South Sudan oil sales are managed by state-own Nile Petroleum (NilePet). This giant oil company has come under the spotlight for mismanagement, with junior employees leading lavish lifestyles despite the worsening economic situation in the country. In an article, published by Sudan Tribune last month, Juba resident and leading blogger Deng Kiir Akok under the heading: “Wedding in Juba – How can you tell if a bridegroom works for NilePet?” shed a grim light.
“In case you come across wedding cars out there on the roads, it’s easy to tell. One need not waste time guessing where could be his place of work. If the wedding cars are Land Cruiser V8, then automatically that bridegroom works for NilePet or simply call him a Nilepeter,” Deng wrote, adding that most employees, including himself, have suspended their birthday’s celebration, not to mention luxurious weddings.
NilePet declined to comment when contacted.
Deng, whose story was widely shared on social media by South Sudanese said he was warning locals about dangers of crossing the road on weekends between Freedom Hall, the main wedding centre west of Juba and Juba-On-Time photo studio.
“My message to Juba pedestrians is that they should be watchful of wedding cars while crossing roads on weekends, especially on the road that links Freedom Hall in Custom, Marx Studio in Nimra Talata and Juba-On-Time Studio at Mobil roundabout,” he added.
For the economy to improve, economists say the war between the government and the armed groups in various parts of the country has to stop.
(ST)