January 23, 2017 (JUBA) – Hundreds of small businesses have closed in South Sudan over the last year due to hyper-inflation and failure by the local population to earn any meaningful income.
- Women sell food at Konyo Konyo market in South Sudan (Reuters)
Shops, restaurants, lodges and transport businesses owned by foreigners were affected, citizens say.
One Hassan, a Kenyan-Somali, who owned a shop in Gumbo, a Juba suburb, has a dozen stocks.
“I am planning to close this shop by the end of this month and go back to Kenya,” said Hassan.
“There were many shops here ran by Kenyans and other foreigners but they have gone back to their countries because there is no profit here now,” he added.
Nearly all markets goods in Juba and other South Sudanese towns are imported from neighboring countries and that requires United States dollars to purchase.
“Right now, the value of SSP [South Sudanese Pound] is not stable. It keeps changing, losing value against the U.S dollar,” said James Obari, Ugandan trader dealing in food items imports.
Obari, however, said the Ugandan Shillings had strengthened against the South Sudanese Pounds (SSP), hence frustrating any prospects of exporting from South Sudan’s southern bordering country.
“In fact, selling my food items within Uganda is now much better than crossing over to South Sudan. It is waste of time and a financial loss,” he added.
Like Kenyans, several Ugandan businessmen left the country and never returned, Obari said.
“I don’t want close my shop but I will be left with little choice if the economic situation does not import,” he added.
Since exchange rate for dollar was floated against SSP in 2015, the local currency has left 80% of its value and inflation stroke 800% in October. The government promised many items to address the crisis but little has changed.
Last week, President Salva Kiir fired the Central Bank governor and his deputy and made changes in the ministry of finance in an effort, economists said, aimed at making shake up in financial institutions.
Experts, however, called for more action, including independence of the country’s Central Bank to ensure none interference from politicians.
“South Sudan needs an institutional reform – independent, accountable and transparent central bank. Otherwise, recent changes in Central Bank can be analogistic,” economist Garang Atem wrote last week.
Atem said government should not use the Central bank as a tool for money withdrawn at will, but “as an institution charge to pursue a long term macroeconomic stability, when used in short-term political machination, a result is hyperinflation.”