Some of the things the new governor of central bank and the government should do to revive economy
7 min readBy Longar Mathiec Wol, Nairobi, Kenya
January 17, 2017 (SSB) —- We know appointing and sacking government official is normal routine and everyone has to appreciate the chance given to him/her by the head of state. Congratulation to the new team though I don’t know their capabilities all eyes are on you. We also appreciate the services the outgoing team delivered to the people of south Sudan. It is time for the central bank to concentrate on regulation and the government look into clearing the mess pay sheet in all ministries. Stop paying people who don’t exist, people who don’t go to work.
The economic collapsed does not come as a surprise it was brought by mismanagement of financial institutions and lack of financial policies. Not just policies but strong policies with implementation mechanisms. There is a need to establish strong and robust economic system that works regardless of who is there. Yes, there is a need for people with economic background to put in place economic policies, but with the existence of cartels in finance sector still we will continue to have a problem. Policies in paper without execution will never work.
We thank president for his efforts to improve the economy but there is long way to go for him and the people he trust to lead this institutions. Because south Sudan economic has collapse, what every name we give to it, the truth of matter is it has collapsed but reviving it will not be easy, if we don’t take strong measures it will be just a nightmare.
There are thousands of cartels involved in this financial failure and for the credibility to come back to financial sectors this cartels have to be punish severely. In every change there has to be pain; without that then forget about change you are looking. It up to the government to accept that it has been overpowered by this strong cartels network or punish any one involve in this illegal practices.
If it was not because of the cartels between the central bank and the forex bureau business there could be no way where dollars can just be piled along the road within the city. It only a shameful thing that only happens in south Sudan. It does not happen anywhere in the world, but only in Juba and other cities in south Sudan. Our own carelessness has attracted thousands of thieves a cross east Africa. Some of these thieves/thugs never even touch dollar since they were born in their respective countries. They were delighted to see the country where money being hawk on the city streets day light.
The only know in their countries Mutumbo/Aliwara or second hands clothes but not United States dollars on streets. So they have to relocate to the land of milk and honey. When the economic collapsed they do not longer get what they got before, therefore, they are left with no alternative but to return back to their profession that is stealing and robing.
If they economic recovery need to materialize; there is a need for certain measures to be taken. Some for government and others for central bank.
Firstly, downsizing the work force. When we retire some of the unproductive work force in the system it will reduce the burden on government. There are some of the people who don’t do anything to the government they are just waiting for their retirement to come. It is up to the government to pay these people and send them to their homes and recruit young people with new ideas and technology to take over this challenge. There would be no progress if we don’t address the issues of retirement properly. It is a good practice for civil servant to retire anywhere in the world.
Secondly, vetting and firing unqualified staffs particularly in the ministry of finance and central bank of south Sudan. It does not make sense to get a medical doctor employ in central bank to do what? That person should be in hospital and help sick people. Sick people don’t stay in bank. If we don’t value the important of professionalism then we will not progress. Let give someone who knows what to do in that field do what he knows.
Also, there are thousands of ghost names in the pay sheet of almost every ministry in the country. Let stop this madness of when believing when I am a director in certain ministry then all my children become my staffs. That has a treatment, pay them using electronic system and get this unclaimed money back to the government treasury. Government should make sure that someone on duty is only legible person to get money.
For example, ministry of defense I quiet sure some of the names of soldiers who rebel 2013 still exist in pay sheet and there are people benefiting from these names. There is now where you can pay someone who is working. When there is no work no money. You are paid for hat you do. It is time for these godfather to tell their children to report back to work or no pay.
Thirdly, exchange rate system need to be look into. If we think our currency is not strong against any other currencies because we don’t export anything then it is a time for fix exchange rate to lead the way till when our economy become liberal. This devaluation will continue because we don’t export anything that bring in hard currencies to balance between the hard currencies going out and those coming in. when they are all going out and no in the imbalance will occur regardless of how much hard currencies we have still will have shortage.
Flexible exchange rate is only good in a situation where hard currencies are in and out. So that when the hard currencies become more, the value of hard currency drop and raises when they become scarce and vice-versa to local currency that is why it is call flexible exchange rate. It is flexible based on the law of demand and supply.
When you look at famous Asian financial crisis, also called the “Asian Contagion” that happened in 1997 it was due to currency devaluations and other events that spread through many Asian markets. Reason being a failure of currency market in Thailand as the result of the government’s decision to no longer peg the local currency to the U.S. dollars that led to the failure in the whole system. The similar situation that happened in south Sudan. We need to learn from such case study and come up with some recommendations that will help the economy in south Sudan to come back to its feet.
Fourthly, Strong regulation and interlinked financial payment system. This type of financial payment system helps the government to monitor the daily transaction across the country. I can’t imagine the type of system you go to the forex bureau and you are given hard currency without receipt.
How that forex going to account for that money when there is no receipt to indicate the name of a customer who exchange that money and the forex remain with copy for accountability purposes. A lot of money is uncounted and the government is losing millions of not billions of tax. Customer does not know whether the exchange rate price given to him or her is what the government given to that forex or not, whether I am pay less and someone benefit.
The most importance thing the south Sudan economy needs now is the diversify economy, put in place strong rules and regulations to regulate the malpractices in financial institutions. Clear all the ghost names in the system, introduce the new financial payment system. All the best.
The author, Longar Mathiec Wol, is a South Sudanese student at United States International University-Africa, Nairobi, Kenya, where he is pursuing Bachelor degree of Science in International Business Administration and Minoring in International Relations. He can be reached through email address: longarmaxiech@gmail.com.
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