Economist doubts BoSS-Finance institutions’ deal, cites insufficient banking system
An economist has expressed concerns over the just signed MOU between the central bank and finance ministry aimed at reducing the carrying of bulky cash and promoting digital transfer, citing insufficiency in the country’s banking system.
Yesterday, the Bank of South Sudan and the Ministry of Finance and planning signed a memorandum of understanding aimed at discouraging physical transportation of bulky cash and promote digital transfers.
The deal was inked between Samuel Yanga Mikaya, the 1st Deputy Governor of the Central Bank, and Malual Tap Dieu, the 1st Undersecretary for Finance.
In a joint statement, the two officials said the framework is a significant development for the financial sector, adding that it would pave the way for substantial reforms in the banking system, improve efficiency and security in financial transactions.
Reacting to the MOU, economist Dr. Ahmed Morgan says if the deal is to be effectively implemented, the existing gaps in the financial systems where individual ques, should no longer be acceptable.
He, however, said this will depend on the efficiency of South Sudan banking system, which he believes is currently lacking.
“The way the Central Bank operates in handling government claims, especially to individuals, should have not been the way South Sudan’s Central Bank is operating where individuals who have claims from the government will have to go and line up with the Central Bank. That is not how it’s supposed to be,” he said.
Morgan stressed that this agreement should serve as a guiding principle for modernizing the country’s financial system.
The economist added that in a modernized financial system, the Central Bank, as the government’s bank, should facilitate digital transfers rather than requiring individuals with government claims to queue for cash withdrawals.
“In the modernized way, the Central Bank has to make just transfers to the individual accounts wherever they are. You are not supposed to go and line up with the Central Bank. You cannot just carry a million US dollars or above and move with it.
“The limit, I think, in South Sudan, the lowest it has ever been there, supposed to be $10 ,000 and downward. You’re not supposed to carry more than $10 ,000 in your pocket and crossing, going around with it.”
According to Morgan, the Ministry of Finance is responsible for managing government revenue and expenditures, while the Central Bank’s role is to handle financial transactions on behalf of the government.
He emphasized that this relationship should be streamlined to reflect global banking practices.
The new MOU is expected to improve the financial operations between the Central Bank and the Ministry of Finance, promoting safer and more efficient transactions through digital means.
