The Bank of South Sudan as We Know It
By Malith Alier, Perth, Australia
Saturday, 6 April 2019 (PW) – The Bank of South Sudan (BSS), originally a regional branch of the Bank of Sudan took over the responsibility of being the central Bank for the newly formed country in 2011. The 2011 Act, establishing the BSS, authorised it to regulate all the financial institutions in the country including the commercial banks.
The late Elijah Malok Aleng, was the first governor of the Bank of Southern Sudan up until shortly after independence. He stayed in the office for a few months after July 9, 2011 and was replaced by Cornelius Koriom Mayik, his former deputy.
Fact or fiction, Mr. Aleng was rumoured to have given a symbolic broom to the country’s ruler during handover. That was not the “new broom sweeps clean,” literally according to the rumour. It might have meant a licence for clearing whatever he built and sustained during the six-year interim period by the new and untested governor. The new governor-designate to take over had previously presided over the collapse of a private bank in the immediate past.
With independence euphoria and oil prices at the peak in 2011, there was never been a better time in the country. This was short lived. Upheaval erupted over the oilfields located at the border of the two Sudans in April 2012 leading to total shut down of oil flow to the north. South Sudan accused Sudan of stealing its crude and a fresh agreement was needed to put the records straight.
That agreement arrived in September 2012 but most South Sudanese weren’t happy about its conclusions as demonstrated by lukewarm reception of the negotiators at Juba International Airport. At this point, oil prices began to experience downward spiral as a large chunk of price proceeds was given away to Sudan by way of the September agreement in form of fees and what was known as Transitional Financial Arrangement or TFA to compensate Sudan for the loss of oilfields to the seceding state. These were some of the series of bad luck to the nascent state. By December 2013 the country was engulfed in self-immolating conflict ignited by old bush political rivalry in the SPLM Party.
The Bank of South Sudan ominously turned out to be a public cash cow before and after independence. A frontier for American Dollar (petrodollars), the same generals and Very Important Persons (VIPs) flocked to the bank to look for short term gains to satisfy the insatiable bush needs. Without uncomfortable uniform, an eerie army ranks and above all the subservient body of guards one won’t gain unhindered access to the gated institution. The BSS and Ministry of Finance are the two institutions where the generals come in full military fatigues as if they are going to war. The war of liberation ended in 2005 but economic self-emancipation-war has just begun.
With brief case companies created, the search for Dollar for pre-emptive imports or education abroad reached a crescendo before the bank ran out of foreign currency. Long queues before foreign exchange bureaus became the new normal. Mothers slept on the road curbs in Juba town so as to be ready for first shot on the queue on Tuesday or Friday mornings.
A true game of a cat and a mouse developed between the Bank of South Sudan, commercial banks, foreign exchange bureaus on the one hand, and the public in various sheds or walks of life on the other. At one point, the Bank of South Sudan instituted what it called competitive bidding for Dollars by financial institutions to be sold at a deregulated price in the market in an attempt to kill what became known as “black market.” It was the black market which drove the increased demand for foreign currency on top of the chain, the US greenbacks.
Fast forward to 2013, the Bank ran out of US greenbacks and therefore, something had to be done to address the situation. Mr. Koriom, the Bank of South Sudan governor embarked on an attempt to float the US Dollar against the South Sudanese Pound but met a steep resistance from the public and even the country’s parliament. The ordinary folks and the parliament, most of whom known as the VIPs were the beneficiaries of the differential rate between the currencies.
The famous palpable clapping in parliament when Koriom gave in baffled the economists and other observers alike. Koriom and the Board of Directors rightly observed the direction the country was heading to, demanded the floating, and it was a matter of time for this to happen. By 2015, the gloves were off and South Sudanese Pound accepted to float! Today in 2019, one US Dollar exchanges for 275 SSP compared to just 2 SSP in 2011.
Between 2014 & 16 some daredevils from the office of the president decided that the time was rife for them to milk the country of meagre US reserves and the little Pound remaining in the vault, that may be keeping the hopes alive.
A signature of the very president of the country was forged and presented to the gullible governor in the Bank. Over 14 million US Dollars was siphoned by the fiends through the collaboration of the so-called Chief Administrator in the office of the president. Convictions followed but the culprits were released from custody within a year.
The emptying of the Bank (BSS) by the crooks in proximity to power fulfilled the prophecy of the “Elijah’s broom!” Elijah was a straight talking guy who wasn’t afraid to call a spade by its real name.
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Yes fact not fiction Comrade Alier, Aleeng was not my bear and my position types of leaders that we have today, he always look ahead and see the heavy load that South Sudanese people will borne in term of sad administrators nominated base on their linage and not what they will deliver to the public.
Shame on them who led the most wealthy country in the region into all time dreaded poverty.