South Sudanese Pounds Depreciates Pass 1700 Per Dollar
In a disheartening turn of events, the South Sudanese Pounds (SSP) has plummeted past the 1700 mark against the US dollar, sending shockwaves through the market and causing prices to soar to unprecedented levels. The rapid depreciation of the SSP has created a dire situation for the people of South Sudan, with the cost of essential goods and services skyrocketing beyond the reach of the average citizen. The price of a kilogram of goat meat, which was SSP 12,000 last week has surged to an exorbitant SSP 14,000, placing a heavy burden on households already struggling to make ends meet. The alarming devaluation of the SSP has not only eroded purchasing power but has also exacerbated the challenges faced by the population in meeting their basic needs amidst this financial crisis.
As the SSP continues its rapid depreciation, the impact on the daily lives of the people is becoming increasingly severe. Beyond the exchange rate, the prices of other essential commodities have also skyrocketed, making it difficult for the average citizen to afford basic household items. Mary Kiden, a trader in Konyokonyo Market, exemplifies the struggles faced by many as she laments her inability to adequately provide for her two children due to the exorbitant cost of food. “I cannot provide my two kids with food because the prices are beyond reach”, said Mary. The inflationary pressures have created a dire situation where even the most fundamental needs are out of reach for many families, exacerbating the already challenging circumstances in a country plagued by economic instability.
John Mayen, a resident of Gudele, has raised concerns about the escalating cost of living in South Sudan. In a recent interview, Mayen emphasized the dire impact of this currency devaluation on the local population, particularly in terms of access to basic necessities. He highlighted the pressing issue of rising food prices, which are pushing many families to the brink of starvation. “ People are going to starve soon, the prices are very high”, said John.
Mayen is calling upon President Salva Kiir to urgently address this economic crisis and implement measures to alleviate the suffering of the people. He stressed the need for immediate intervention to stabilize the currency and control inflation, as the current situation is exacerbating poverty and food insecurity across the country. Mayen’s plea reflects the widespread concern among South Sudanese citizens who are struggling to cope with the harsh economic realities brought about by the depreciating currency. “I call on the President of the Republic to intervene, to save lives”, said John.
One of the most immediate impacts has been the surge in fuel prices, with a liter of petrol now costing SSP 2,400. This sharp increase in fuel costs has had a cascading effect on the prices of essential goods and services, pushing them higher than anticipated. Businesses, particularly those reliant on transportation, are facing increased operational costs, which are ultimately passed on to consumers in the form of higher prices.
The rise in petrol prices has also exacerbated the challenges faced by the average South Sudanese citizen, many of whom are already grappling with high inflation and limited purchasing power. As the cost of living continues to rise, households are forced to allocate more of their budgets towards basic necessities, leaving little room for discretionary spending. The government is under pressure to address the currency depreciation and its impact on the economy, as the situation threatens to further destabilize an already fragile economic landscape.
The Central Equatoria State Chamber of Commerce has raised a red flag over the alarming depreciation of the SSP. Chairperson Robert Francis Pitia has expressed deep concern over the impact of this rapid devaluation on local businesses and the economy as a whole. Traders are facing significant challenges as they navigate the volatile exchange rates, leading to a climate of uncertainty and fear of incurring substantial losses in their transactions.
Pitia emphasized the urgent need for government intervention to address the soaring inflation rates and stabilize the currency. The Chamber of Commerce is calling on authorities to implement effective measures to mitigate the economic repercussions of the currency depreciation and restore confidence in the market. Without swift action to tackle the root causes of this crisis, businesses will continue to struggle, and the overall economic stability of South Sudan will be further jeopardized
Last week, tensions escalated in various regions of South Sudan as traders in Rumbek, Wau, and Terekeka decided to take a stand against local authorities’ directives to reduce prices in the market. The decision to close shops in protest reflected the deepening economic crisis in the country, exacerbated by the significant depreciation of the SSP against the US Dollar. This move by the traders underscored the challenges faced by businesses and consumers alike, as they grappled with the impact of the currency devaluation on their daily transactions and purchasing power.
The closure of shops in these key trading centers highlighted the growing discontent among business owners who were struggling to maintain profitability amid the rapid decline of the SSP. The protest served as a stark reminder of the urgent need for sustainable economic policies and interventions to address the currency depreciation and its ripple effects on the local economy. As traders voiced their concerns through this collective action, it underscored the pressing need for government authorities to engage in constructive dialogue with stakeholders to find viable solutions to stabilize the currency and restore confidence in the market.
The recent announcement by the Governor of Bank of South Sudan (BoSS) regarding measures to increase non-oil revenue collection, including the opening of a BoSS branch at the border of Nimule, signifies a proactive step towards bolstering the country’s economic stability. However, the looming question remains whether the entrenched cartel that controls the resources of South Sudan will allow these initiatives to come to fruition. The presence of powerful entities with vested interests in maintaining the status quo poses a significant challenge to the governor’s efforts to diversify revenue streams and reduce the country’s dependency on oil exports. The success of these proposed measures hinges not only on their economic viability but also on the ability to navigate the complex web of political and economic influences that shape the landscape of South Sudan’s financial sector.
The ongoing depreciation of the SSP against the US dollar can be attributed to a multitude of factors, with a significant root cause being the failure of President Salva Kiir’s government to establish accountable institutions. The lack of transparent and effective governance structures has led to widespread corruption, mismanagement of resources, and a general lack of economic stability in the country. President Kiir’s admission on February 2, 2024, that there has never been a true government in South Sudan since 2005 underscores the deep-seated issues that have plagued the nation’s economy for years.
The absence of accountable institutions has created a breeding ground for economic woes, as the lack of oversight and regulation has allowed for unchecked exploitation of resources and rampant financial mismanagement. Without a solid foundation of governance and transparency, the South Sudanese economy will continue to struggle to attract foreign investment, maintain a stable currency, and provide essential services to its citizens. Addressing these institutional deficiencies and implementing reforms to promote accountability and good governance will be crucial to stabilizing the economy and reversing the trend of currency depreciation.
