South Sudan's English Daily Newspaper
"We Dare where others fear"
By Okech Francis
President Salva Kiir issued an order recently on the independence of the Central Bank of South Sudan.
While many would have passed it on as one of those executive directives aimed at institutional changes or plans, Dr James Alic Garang, the Governor of the Central Bank however thought it better to explain how it would benefit the country.
In a press conference last Friday, Garang highlighted accountability, transparency and independence itself, of the Central Bank in his explanation.
Many times presidential orders have been issued with no one to break it down for effective understanding by the people.
A trait very much noticeable in Garang is driving home plans and programs of the Central Bank, to ensure everyone grasp every bit.
It’s not easy to quickly reverse the state of the economy in South Sudan but it’s always better to let people clearly understand it and efforts being exerted.
His explanations at the press conference unraveled what that order entails.
It was clear and simple to understand and reminiscent of the three pillars the order unveiled. In fact he categorically broke down the impact of what that order would have on the economy, the country and the banking industry.
Let’s have a look at his explanation on the benefits of the order below, according to Garang.
First and foremost, Garang said, the independence of the Central Bank globally arose out of a realization that monetary policy decisions should be based on the best interests of the economy, rather than being influenced or swayed by short-term political considerations.
In line with that, he said, that order brings to mind three principles of the Central Bank highlighted as follows.
Ensuring accountability to the public and delegating authority, where the Central Bank regularly reports to the leadership, including the parliament, on the conduct of monetary policy, as stipulated in the Bank of South Sudan Act, 2011, amended 2023.
Moving towards greater transparency where the Central Bank would always seek to deliver regular communication with key stakeholders, share relevant information with market participants, prioritize quality over quantity when exercising transparency and embark on upgrading systems and infrastructure, in line with the global and EAC standards.
The third is on exercising Central Bank independence. Under this principle, the prime objective is to assign instrument independence to the monetary authorities, with the Central Bank assuming independence in formulating and setting operational targets of the monetary policy, apprising complementarity between responsibility and accountability, as enshrined in the Bank of South Sudan Act, 2011 amended, 2023, while contextualizing transparency and independence.
The Central Bank will also ensure greater transparency in communicating policy objectives and intent to strengthen credibility, while influencing expectations of the banking industry and the private sector.
I would look at that order, if all institutions observe it, as the platform that will recast the foundation for the rebuilding of the economy of South Sudan. Having said that, I believe even governor Garang knows the enormous task before him, task of scaling down inflation and strengthening monetary policies when basically the backbone to rely on is nonexistent. Garang has no magic wand. It will not be easy if we are continuing to import even gwede gwede and okra or tomatoes from neighboring countries without local production. This goes to the public.
Whatever the case may be, Garang is currently similar to a doctor presented with a patient suffering from a curable disease minus medicine.
All eyes are on him to tame the dire economic situation but he is only in charge of the Central Bank and not the economically productive units of South Sudan.
He has the same monetary tools prescribed and which every Central Bank on earth uses.
To make matters tough, in South Sudan, the state of the economy is no different from that of a patient who has developed full blown HIV/AIDS.
At the HIV status, ARVs can help to tame viral load and even drop them to zero but once the body degenerates into full blown, the best is to treat opportunistic diseases since the white blood cells would have gone, and turn to God.
While he has his ARVs in foreign currencies which he can auction to gag inflation, and keep South Sudan afloat, Garang can only get respite if the country responds to his rallying cry of production.
South Sudanese must stop sitting put and complaining while they are heavily contributing to the problem by failing to produce even vegetables which are simple to cultivate.
And finally, the government institutions, especially the Ministry of Finance, try to give that space and distance to the Bank of South Sudan to operate within its independence.
