Changing South Sudan Currency: A Best policy or Blunder? First thing Fist, Trust and Confidence, Destructive Announcement and Institutional Capability

Alier Maker Ghai Duk
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Alier Maker Ghai Duk: PhD student, Finance, University of International Business and Economics (UIBE), Beijing, China

International Journal of Science and Business, 2020, vol. 4, issue 12, 1-20

Abstract: This article focus mainly on alternative policy mechanism as opposed to the government plan to change national currency as it lack the solutions to core economic problems facing South Sudan economy today. For example, hyperinflation, unemployment, poor investment climate, low aggregate GDP and GDP per capita, corruption and economic sabotage. The way out of these economic phenomenon has been elaborated beyond mere statement in the article, and these includes investment in both private and public sector, agricultural productivity to create food surplus in the country as well as fixing the exchange rate in order to reduce spread between the black market rate and official rate. The important of fixing exchange rate as a starting point is to enable necessary conditions to make South Sudan attractive for investment in order to increase productivity and purchasing power of local currency, restore orderly market mechanism, improve livelihoods, sustained rapid economic recovery efforts and mitigate uncertainty and marker risks. The paper has also express concerns over institutional weakness to handle this costly project in terms of cost of minting and printing of new currency to invalidation and monitoring of counterfeit money during the process. Additionally, the article recommends that South Sudan should closed potential channels through which money leave the country, by reviewing the employment percentages of foreign based nongovernmental organizations and industries, their mode of payment and make sure that all payments in the country are made in local currency. These also include government payments to foreign nationals and companies. Furthermore, government must demonstrate strong position against corruption as South Sudan rank worse at 179 out of 180 most corrupt countries in the world and 180 out of 190 countries where doing business is not easy. This is embarrassing and contradiction to the idea of making South Sudan attractive for the investment. The paper view currency change plan as dangerous economic blunder than a solution.

Keywords: Currency; Policy; Blunder; productivity; investment; institutions; announcement and corruption (search for similar items in EconPapers)
Date: 2020
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