Africa-Press – South-Sudan. The Central Bank has announced a raft of fiscal measures meant to slay the dragon of the runaway inflation that keeps the economy stunted as the cost of living remains higher than the roof.
The strategy is based on the increment of US dollars to be auctioned to the commercial banks and forex bureau to lower the exchange rate in the country. The increase is from an $8m to $13m weekly injection of the foreign currency.
The bank has also announced other new monetary and banking policies to revamp the economy. Moses Makur Deng, the Governor of the Bank, said the new policies aim to achieve a single-digit inflation rate of 8 per cent.
The country’s inflation, stood at 13.2 per cent as of December 2021, a figure that represents a reduction from 58 per cent in December 2020. Makur promised to lower the inflation rate further to a single digit this year.
Despite the fact that the auctioning of the dollars to the commercial banks and Forex Bureau has managed to stabilise the foreign exchange rate, the gambit has not helped reduce the prices of goods in the market.
The prices of goods and other basic commodities are still very high in the market. Several times, the traders have complained of over taxation and unnecessary roadblocks as the major causes of the high prices in the market.
Imagine, the Central Bank will be auctioning off the US $13 million weekly. This is a huge amount of money, and if roadblocks are removed from the highways, they will have an impact on the market.
Apart from the high dollar rate, over taxation and unnecessary roadblocks have been the major causes of the skyrocketing prices in the country. This has to be resolved to realise the effort of the central bank in reducing the inflation rate.
Secondly, you also sometimes wonder why it takes the government three to four months to pay the salaries of its civil servants, yet it is able to issue a sanction for the amount of weekly auction.
The majority of the employees in the country are civil servants, but most of these people have limited purchasing power due to delays in their salaries.
So, the reduction in the foreign exchange rate may have little effect on the lives of ordinary people who go over three months without receiving their salaries. The reduction in the exchange rate does not necessarily improve the living standards of the common people, but rather the power to purchase goods. Citizens must be able to meet their basic needs in order to benefit from the auctioning of the dollars.
The ministry of finance should ensure that the civil servants who make up two-thirds of the employees in the country are paid promptly. The auctioning of dollars could be one way of reducing the high inflation, but the government should also ensure that multiple taxes on imported goods are reduced. It makes no impact if the traders get dollars from the commercial banks at a low rate, then after importing the goods they sell them at high prices to the consumers.
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