By Mamer Abraham
Central Bank governor Dr. James Alic Garang has said the bank will encourage government institutions to demand payments in local currency.
The United States Dollar has been widely used for domestic and cross-border transactions, including payment of salaries for some international NGOs, making it difficult for South Sudanese Pound to compete.
In a statement on Friday, the governor stated dollar could not be ditched completely because it would still be necessary for the purchase of some merchandise abroad.
“So, we will ensure that we will encourage all the government institutions to demand payment in local currency,” he explained.
“But like I said earlier, there are exceptions, that do not only apply to us but anyone else that manages the economy; and that includes products that you need to buy abroad.”
Dr. Alic maintained that the use of local currency domestically was very important stressing that the US dollar as a vehicle currency must still be used at the actual time when its usage is needed.
“That means there is no way to completely ditch the foreign currency, but you can selectively decide when to use it and when not to use it,” he continued.
“So, for domestic transactions, we will maintain that order, and we will encourage the government agencies to seek payment in local currencies.”
Early this year, the former governor issued an order for institutions to adopt payments in local currencies instead of the rampant payments in dollars.
However, the order did not seem to materialize as the use of dollars continued despite the order.
In June, a Kenyan member of parliament in the East African Legislative Assembly (EALA) David Sankok moved the motion that the use of local currencies would pay incentives, especially for cross-border trade.
“Inter-country trade [amongst] EAC partner States and between the EAC members and other economic blocs is becoming expensive, punitive, cumbersome, inconvenient and troublesome due to the [use] of the US dollar,” Sankok said in a statement.
In August, the newly appointed minister for finance and planning Dr. Bak Barnaba Chol said he would de-dolarize the economy for the suffocating pounds to have a sigh of relief.
The minister stated that inflation and high exchange rates were unrelenting because the locals had adopted the use of US dollars to sign contracts and other financial contracts.