Economist urges Bank of South Sudan to re-direct auction money to spur production
By Editorial Team
The vice chancellor for Upper Nile University, Professor Marial Awou, an economist advises the government to re-direct the $13 million to production instead of releasing it to the market every week to try to stabilize exchange rate.
“It’s too expensive, it is a very serious cost to the economy, we can use this money, instead of using it to keep the exchange rate low, let us produce something to bring more dollars into the country, if we finance our banks like agricultural bank, investment bank, industrial banks, we will be doing a better service to our economy than spending it on keeping the exchange rate down.” Said Professor Marial.
The professor’s statement comes after the Central Bank of South Sudan announced that it would begin releasing $13 million weekly to keep exchange rate stable
That amount of money being released every week to the market means, the bank will be availing $52 million a month and $624 million a year.
South Sudan’s apex bank says it will be releasing the country’s monetary and banking policies for the year 2022 soon.
It further says the policies will endeavor to maintain the annual inflation rate at a single digit of about 8 percent
Professor Marial says the global food price has gone up and South Sudan’s efforts to try and reduce the price of food may be futile.
“The global food price rose by between 20-40 percent for cereals like maize, wheat, sorghum among others, so even if you pump money into the market here and the food price is already high from where we are importing, prices will not reduce.” Said professor Marial.
The governor of the Bank of South Sudan, Moses Makur Deng says one of the reasons as to why prices of basic goods have remained high despite the continuous injection of hard currency in the market is due to high and multiple taxes levied on traders, businesspeople and businesses by authorities.
Traders in South Sudan’s capital Juba continue to complain about multiple taxes.
Santa Ayot who runs a sole proprietorship food vending business in Munuki says some of the taxes include, money to the national revenue authority, state government’s revenue authority, city council service fees, town rate, rental value, certificate to acquire rubber stamp, letter of no objection from the police’s Criminal Investigation Department.
There are also fees for operations and trading license, chamber of commerce fees, fire brigade fees, monthly rubbish fees, certificate from the state health ministry among others.
On the multiple taxes, professor Marial proposes that revenue collection be professionalized, he says tax collection should be left to the national revenue authority and illegal roadblocks were money is collected be disbanded.
The professor says once the issue of multiple taxes are resolved, a proper public financial management system should be put in place then money should be used to produce goods and provide services that can bring in more hard currency.
