President Salva Kiir on Monday terminated the services of Central Bank Governor Dier Tong Ngor ahead of his press conference to announce the 2022 plan.
Mr Ngor’s sacking comes exactly one year after he was reappointed to replace his predecessor, Gamal Abdalla Wani in November 2020, who was also his successor in the January 2020 kick-out reshuffle.
During Abdalla’s tenure, South Sudan suffered a drastic hike in the level of inflation, marred by the skyrocketing prices of basic commodities, with the dollar trading against the South Sudanese Pound at 600 in the black market.
Mr Ngor, who was believed to have amassed experience from his previous job as the country’s central bank boss, took some drastic steps to resuscitate South Sudan’s economy, following President Kiir’s directive during his second stint swearing-in ceremony.
“I appealed to you to work hard with your colleagues from the banking system and the concerned institutions to stabilise the market price,’’ President Kiir urged on November 2, 2020.
“It is upon all of us to work collectively as a team to recover the economy that has been affected by external factors.”
Battered local currency
Ngor would then commence the sanctioning of the dollars to mop out the foreign currency and give the local currency a facelift in mid-2021, pulling the exchange rate down to 400 SSP against the dollar by auctioning enough foreign currency to commercial and forex bureaus.
He increased the supply of the US dollar to curb the scarcity that has impacted market prices in South Sudan, by increasing the weekly auctioned amount from $5 million to $8 million in 2021.
Some economists, however, warned that the move would not solve the economic crisis of the country, but rather could lead to hyperinflation.
“The market has been controlled by the speculators, and these speculators buy the dollars, and they hoard them, and they do not circulate,” Dr Abraham Matoc Dhel, Vice-Chancellor of Dr John Garang University, said.
He added: “It is a matter of making the dollar a commodity rather than a medium of exchange, as it is expected to be.” In economic terms, money is useful when it is invested or when it is circulated.
“Still, this money will go into the hands of speculators who control the market, and this will not have an impact on the prices in the market.”
But Mr Ngor insisted and argued that “with the auction and the reform that we are doing now, we are also addressing that (black market dealers) because of those who are hoarding dollars. If we continue to supply dollars to the market, the exchange rate will stabilise and the pound will gain strength.”
In February, Mr Ngor took another strategic move by introducing SSP 1,000 banknotes, which he asserted would reduce inflation and stabilise market prices of basic commodities.
High market prices
Even though the dollar had stabilised, Mr Ngor was yet to stabilise the market prices, prompting some citizens to complain about the continued increment in prices of consumable goods such as rice, maize flour, beef, cooking oil, and onions, as well as beans and sugar.
Due to this, in December 2021, members of the Revitalised Transitional National Legislative Assembly summoned the line ministries and government institutions, including the central bank, over the skyrocketing prices.
“The prices of commodities in our markets are very, very high these days,” Paul Yoane, Member of Parliament, said, “We are supposed to be a mixed economy rather than a free economy. In a free economy, anybody can come and do anything that they want, but in a mixed economy, we can control the prices.”
However, Mr Ngor has become the only Governor of the Bank of South Sudan to serve twice, between May 2018 – January 2020, and November 2020 – January 2022.