South Sudan's English Daily Newspaper
"We Dare where others fear"
By Okech Francis
On Thursday, President Salva Kiir directed the much sought for right of the Bank of South Sudan as an independent institution.
In an order read on South Sudan Broadcasting Corporation that evening, President Kiir said the Bank of South Sudan will operate without interference from other government institutions or any individuals.
Broadly, the primary goal of a Central Bank is to provide the country’s currencies with price stability by controlling inflation. It also acts as the regulatory authority of a country’s monetary policy and is the sole provider and printer of notes and coins in circulation.
Time has proven that the Central Bank can best perform in these capacities by remaining independent from government fiscal policy and therefore uninfluenced by the political concerns of any regime.
On its website, the Bank of South Sudan says it’s an autonomous central bank with a primary objective of maintaining price stability and promoting a healthy domestic economy.
It says this is achieved through ensuring a stable and efficient market based financial system with strong liquidity and solvency. It also says its achievement is through promoting a secure and reliable national payment system that contributes to overall financial system stability.
Falling in line with that, President Kiir’s order directed that “the Bank of South Sudan is independent in terms of its powers and functions without any interference from other government institutions.”
The order demanded “individuals to ensure that the bank independently implements monetary policies that promote domestic price stability, currency issuance, regulations of the financial sector, holding and managing the official exchange reserves of the country as well as implementations of its independent recruitment policy.”
On social media, South Sudanese picked it up with much compliments.
“The order is in place. Even before this order, and the nature of the central bank internationally explains those policies,” a South Sudanese, said on a social media platform.
Another was quick to point at changes on the bank’s governors, noting that “the first step is to stop constant firing of governors of Central Bank.”
“The first thing to ensure the independence of the Central Bank is to make sure that the tenure of the governor of the Bank is not subject to the whims of any Minister of Finance appointed,” the commentator said.
The independence of the Bank of South Sudan has always been questionable with many believing that it operated under the direct supervision and instruction from the Ministry of Finance.
Proper monetary policies have been overlooked and spending highly above capital coming in led to difficulties to the Central Bank in implementing its monetary roles.
“The Central Bank is independent from day one. The biggest problems or issues are interferences from the senior government officials,” according to another commentator.
Section 8 of the Bank of South Sudan act states that “the bank shall be independent in its statutory, supervisory and financial functions.”
That independence “will minimize the massive corruption that is going on in the institution,” a social media commentator said.
“This decree will allowed the Central Bank to do the monetary policy that will support the policy of Ministry of Finance and Economic Planning.”
