Central Bank Governor Johnny Ohisa Damian on Thursday proposed a change in the South Sudanese currency to facilitate the government’s access to money stashed in households.
Governor Ohisa made this recommendation in response to queries from National Economic Conference participants regarding the lack of bank savings among the majority of South Sudanese citizens.
In his reponse, Governor Ohisa revealed that a significant number of people lost their savings during the 2013 conflict when the deposits in most commercial banks were retained by the Central Bank as part of a government policy. Consequently, many South Sudanese citizens lost faith in the banking system and resorted to storing their money at home.
The governor’s proposal comes almost three years after the South Sudan Council of Ministers in 2020 passed a resolution to change the local currency, aiming to bolster the country’s economy due to the continued depreciation of the South Sudanese Pound (SSP) against the United States Dollar (USD).
Minister of Information and Broadcasting Michael Makuei Lueth, who also serves as the government’s spokesperson, described this move as advice to individuals holding the local currency in their homes, urging them to report to the bank.
However, this resolution was subsequently revoked by the government, with Minister Michael Makuei stating that the plan to change the currency was merely a proposal.
Governor Ohisa emphasized that if the government intends to recover the money stored in people’s homes, changing the currency is imperative. He explained, “During the 2013 conflict, deposits in most commercial banks were retained by the Central Bank as per government policy. Everyone with a savings account claimed that the Central Bank had confiscated their money. So, will these individuals trust the bank again? No.”
Ohisa further elaborated, “This is why people have been hoarding their money at home. The only solution to retrieve this money from households is to change the currency. Once the currency is changed, everyone will deposit their money in the bank.”
Additionally, the governor attributed the preference for the US dollar over the South Sudanese Pound to the Ministry of Finance and Planning, suggesting that they collaborate with the Bank of South Sudan to formulate a joint policy to regulate the use of the dollar.
“There is a current problem where everyone demands the dollar. However, those who bring dollars from abroad do not contribute to our reserves. The Ministry of Finance and Planning should explore ways to regulate the use of the dollar,” Ohisa emphasized.