Salvatore Garang, Minister of Finance and Economic Planning during an interview at J1 in Juba July 9, 2019 Credit: Joakino Francis/Eye Radio

The government has advised the hospitality industry to stop the use of hard currency and only deal in local currency.

According to the Minister of Finance and Economic Planning, hotel owners should not charge clients in US dollars or other forms of foreign exchange.

The hotel industry in South Sudan is quite saturated -especially in Juba, the capital city where most of the businesses are headquartered.

Jumia Travels, Africa’s leading hotel booking website, has listed over 125 standard hotels in South Sudan.

Some of these hotels in the country have often accepted the US dollars from clients for accommodations, dining, meetings, and events among others.

Salvatore Garang believes this is contributing to the circulation of the hard currency in the black market.

He said the norm should be discouraged by the use of the South Sudanese Pounds, against the dollar -just like elsewhere.

“If you go now to Addis and you give the hotel managers dollars they will say no, you go and exchange it into birr and then you come and pay us,” said Garang.

South Sudan does not, however, have a functioning forex exchange trading system.

The central bank rate is often lower than the black market rates. The prices of goods in the market has often been determined by the value of the local currency versus the US dollars.

This was exasperated after South Sudan surrendered its currency, the SSP, to trade freely in the market against the US dollar and other foreign currencies in 2015.

The move was approved by the national parliament, but no law was enacted to that effect.

Dealers in the clandestine market do not have licenses and have resorted to secretive dealings after several crackdowns by the government.

“There must be a law because you cannot have parallel currencies to be paying, it should be in SSP… even our budget is developed in SSP, not in dollars, and it is translated by the exchange rate,” Salvatore added.

He argues that this will help maintain the circulation of the pounds in the market.

Recently, South Sudan printed a huge amount of SSP because of what Salvatore Garang called “scarcity of pounds in the market”.

However, it has been observed that the US dollar is scarce in the market and it is difficult to buy dollar from any forex bureau.