President Salva Kiir on Monday fired the Governor of South Sudan, Dier Tong Ngor, and named Moses Makur Deng as the new governor to lead the charge in the country’s most crucial banking organ.

Tong was removed after serving only for one year. However, under his leadership, the Bank of South Sudan (BoSS) introduced a wide range of financial reforms, including a requirement that commercial banks quote a single foreign exchange rate to limit market distortions.

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When Tong came to office in November 2020, the country’s economy was severely injured by the impact of the COVID-19 pandemic, not to mention the low oil prices. The country’s currency had drastically depreciated, and $100 was sold at SSP 50,000 to SSP 60,000 in the black market.

The prices of goods in the market had even doubled due to the inability of traders to access hard currency for importing goods.

However, after his appointment, Tong was able to tighten the country’s monetary policy in a way that mitigated the rapid depreciation of the South Sudanese Pound against the US dollar, following the five resolutions made by the bank’s Monetary Policy Committee formed to tackle the devaluation.

The bank’s Monetary Policy Committee also increased the bank interest rate to 15 per cent, the bank’s reserve requirement rate for commercial banks; and the cash reserve ratio to 20 per cent was among the five resolutions made by the bank’s Monetary Policy Committee.

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However, during his leadership as governor of the Central Bank, the dollar exchange rate has remained stable for more than six months, for the first time in the history of the country. While there might have been some challenges or weaknesses, keeping the exchange rate stable was the major achievement of Tong that the citizens will never forget.

Many people were able to meet their Christmas needs simply because the prices of commodities in the market had also remained stable. In this regard, one would easily budget with a specific amount of money without anticipating weird behaviour in the strength of the local currency, which balloons the prices in the market.

Way forward

There is a need to maintain this positive achievement through the diversification of the country’s economy instead of depending directly on oil revenue. Oil is a non-renewable resource that can be used up in the future. So, the government needs to invest the oil revenue in the agricultural sector to produce more food for both domestic and export markets.

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Almost 90 per cent of the government’s revenue does indeed come from oil. One day, everything on this planet has its end, even if, surprisingly, one day the oil fields dry up. No doubt, the situation would be a disaster simply because the government has not been investing the oil revenue in other sectors.

Apart from the change of personnel, the government also needs to look for other alternatives to improve the country’s economy because the current stable exchange rate will not remain permanent. It is likely to increase at that time should there be a drop in the oil price or any circumstances that affect the production of oil since it is the major country’s hard currency generator.