How SSP lost pace against USD past decade

The South Sudanese Pound (SSP) has suffered a beating against the US dollar in the past decade as the country’s inflation rate skyrocketed more than a hundred-fold.

This unfortunate turn of events forced the country into economic depression with individuals initially earning as low as SSP300 and living comfortably, later on, became paupers in a short span.

South Sudan’s economist Dr Abraham Maliet Mamer recounted to the City Review how the country lost its precious strong currency.

“In 2011-2014, SSP300 could bring you US$100; the money that could cater for the family’s basic needs for the month,” Dr Mamer recalled.

For example, he recalled how between 2011 and 2014/15, the civil servants who earned SSP500 to SSP700 in a month managed to support their families without complaining.

“One SSP could buy you 10 pieces of bread which could give you complete breakfast.”

What went wrong?

But where did South Sudan put a foot wrong? According to Dr. Mamer, conflicts, corruption and lack of clear economic policies such as clear tax system drained the country’s gains.

He also mentioned that the country’s dependence on imports had also contributed to the high inflation in the country, through unfavourable balance of trade.

This, he said, could be solved through embarking on improving the volume of exports of products to other countries.

Despite the auctioning of the dollar to the commercial banks and forex bureaus; which has contributed to the appreciating value of the SSP, Dr Mamer argued that with no decrease in imports, the dream could remain a mirage.

 “The more you export goods outside the country, the more the exporters need the local currency so that they buy your goods and this how you make the currency stronger,” he cited.

He said the country could leverage on exporting fish, gold, timber or any other minerals to enable the country’s currency to gain permanent strength.

He added that it is based on the logic that the more they need the pound, the more country’s currency becomes stronger.

However, the economist argued that having a stronger or weaker currency is not a measure of whether you are meeting good performance in the economy because imports and exports are the main determinants.

“Our people out there saying now dollar has dropped, no, dollar hasn’t dropped, in fact pound is still weak against dollar,” he said.

 “The pounds gaining the ground now, for me I believe it is something artificial. I am not sure but I believe someone somewhere is holding the pound so it [there is] no total economic performance.

“Yes dollar has dropped down but again the prices remains high in the market,” he added.

He went on to say the “strength you are seeing these days is [an artificial strength]. Our pound would have defeated the market … in fact is actually losing because nothing changes in the market’’.

He said that as the country enters the next decade, there should be a candid conversation to craft robust economic policies to rejuvenate the strength of the currency.