Central Bank Governor Johnny Ohisa Damian’s recent remarks before the national parliament on Monday where he contemplated the closure of underperforming commercial banks has received support from a prominent economist.
John David, the Executive Director of the Diversity Center for Economic Studies, said that the move could be instrumental in revitalizing South Sudan’s economy.
Speaking with Radio Tamazuj on Wednesday, David expressed concerns about the financial health of most commercial banks in South Sudan, labeling them as undercapitalized and underperforming.
“I think the statement made by the Central Bank Governor about closing underperforming commercial banks is right,” he said. “If you look at the banks operating in South Sudan, you will find that they are undercapitalized and performing poorly.”
“That is why the majority of people in the country have lost trust in the banking system and are keeping their money at home,” David added.
David went further and proposed the merging of underperforming banks with high-performing ones to create a more robust and efficient banking system capable of offering top-tier services to the public.
Regarding the Central Bank Governor’s proposal to change the national currency, the economist expressed reservations and said that given the current economic and political instability in the country, altering the currency might not yield the desired results.
Presently, South Sudan has approximately 12 licensed local commercial banks.