South Sudan's English Daily Newspaper
"We Dare where others fear"
By Awan Achiek
In Juba, small businesses are locked in a fierce battle for survival as the devaluation of the South Sudanese Pound and soaring inflation push them to adapt or risk closure.
At the heart of this struggle is Amer Juma, a shop owner in the bustling Custom Market. Her store, which sells spare parts and other products, is facing severe challenges as prices skyrocket and customers dwindle.
“Everything here is controlled by dollars. We buy goods in dollars, and if we attempt to purchase in pounds, the wholesalers raise the prices,” Juma shared.
With the South Sudanese Pound losing value against the dollar, he sees customers unable to keep up with rising prices, leading to slow sales and tighter margins.
“Sometimes, a trader goes the entire day without a single customer,” Juma noted, highlighting the growing desperation in the market.
Despite the high cost of imports and limited spending power among citizens, Juma calls on the government to create a more business-friendly environment and reduce the heavy taxes that burden traders.
South Sudan’s economy is heavily dependent on oil exports, leaving it vulnerable to international price fluctuations and regional instability.
Economic disruptions, compounded by inflation and a volatile exchange rate, have drastically raised the cost of living for the country’s 12 million residents.
Charles Arike, who runs a cosmetics shop in Custom Market on 22 October 2024 (Photo by Awan Achiek)
Another trader, Charles Arike, who runs a cosmetics shop in Custom Market, has also seen the impact of a depreciating currency on his business.
Arike started his store with high hopes and a significant investment of $13,500, but today he grapples with mounting costs.
“The rent alone is $1,000 per month, and that’s without counting other operational expenses,” he explained.
Multiple taxes from the Juba City Council, as well as service fees and security fees, have increased his operating costs, reducing profit margins even further.
“Every month, we’re hit with service fees of SSP 60,000 and security fees of SSP 50,000,” Arike added, noting that customer demand is too low to cover these escalating expenses.
For businesses like Juma’s and Arike’s, the depreciating pound has led to price hikes that have significantly impacted consumer purchasing power.
As of Tuesday, the Central Bank set the official exchange rate at SSP 3,157 per U.S. dollar, while the black market rate soared to SSP 440,000.
The rising cost of dollars directly drives up the prices of essential commodities, creating a vicious cycle where fewer customers can afford to buy, and businesses struggle to stay afloat.
Since gaining independence in 2011, South Sudan’s currency, the South Sudanese Pound (SSP), has undergone several changes.
Initially fixed at SSP 2.91 to the dollar, the pound’s stability has since deteriorated.
In 2015, the Central Bank adopted a managed float exchange rate to combat inflation, but the economy remains in flux.
Prof. Abraham Matoc, professor of economics and Vice-Chancellor Dr. John Garang Memorial University [Photo: Awan Achiek]
Professor Abraham Matoc, Vice Chancellor of Dr. John Garang Memorial University, suggests that currency reform might provide some relief.
He proposes replacing high-denomination notes to encourage price stability and confidence in the pound.
Economists have urged the government to intervene and stabilize both the exchange rate and consumer prices.
Dr. James Alic Garang, Governor of the Bank of South Sudan, pointed out that global events, including oil production disruptions, COVID-19, and geopolitical tensions, have worsened inflation.
He noted that while the bank has occasionally injected U.S. dollars into the market, interventions are limited by available foreign reserves.
Alic underscored the need to support local production across agriculture, mining, and industry to reduce reliance on imports and enhance economic resilience.
As the currency weakens, business owners are left wondering how long they can withstand the pressures of rising costs, weak consumer spending, and the daily uncertainty that has become the new normal for small businesses in South Sudan.
