The South Sudanese government reportedly banned transactions in US dollars and ordered that all local payments be settled in the local currency. Salva Kiir Mayardit’s government has reportedly said it also wants all commercial contracts signed to be based in the local currency.
South Sudan’s Economic Collapse
As part of initiatives to revive South Sudan’s war-torn economy, Salva Kiir Mayardit’s government recently banned US dollar transactions, according to a report. Instead of the greenback, the government has reportedly ordered all local payments to be settled with the local currency, the South Sudanese pound (SSP).
According to a report In East Africa, the decision of the government of South Sudan is likely to have a negative impact on the operations of importers and regional banks based in the country affected by hyperinflation.
Before banning transactions in dollars, the government of Slava Kiir had set up a committee to recommend measures to revive the South Sudanese economy hit by hyperinflation. However, despite the presence of the committee, South Sudan still suffered its worst economic crisis in 2022. This, combined with crippling hyperinflation, has now left up to 7 million people in South Sudan facing severe food shortages and possibly starvation.
Meanwhile, in addition to banning transactions in US dollars, the government of South Sudan has said it wants all commercial contracts signed to be based in the local currency.
“It is a clear directive from the Central Bank that all transactions in South Sudan must be done in our currency. Thus, all business contracts must be signed in our local currency,” Michael Makuei Lueth, the Minister, is reported to have said. country information.
Although it sits atop the largest known crude oil reserves in sub-Saharan Africa, the civil war as well as the continuous violent clashes between different groups have ensured that South Sudan remains one of the poorest countries. and the least stable in Africa.
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