There seems to be outright confusion in South Sudan’s capital of Juba over an announcement by the country’s Central Bank that their foreign exchange reserves have run out, in other words that no foreign currency is left in the vaults. Foreign exchange bureaus and banks are said to have received no foreign currency to supply the market for a while now, raising additional questions of which way the economy is set to go in the absence of hard cash.
Left with dwindling oil revenues and cash draining away in the ongoing civil war, the country has literally go broke. Regime leader Salva Kiir only last week categorically rejected mediated deals which would have seen a power sharing agreement.
With tourism revenues near zero, too, in spite of some major wildlife resources and natural attractions which could easily see tens of thousands of foreign visitors flock to those sites like Boma National Park or the Sudd, there is little hope of an early economic revival, as other exports are few and far between.
Suppliers of goods and services from the region are said to be nervous over their clients’ ability to pay their import bills. Whatever credit terms have in the past been agreed on, have reportedly been altered into cash upfront or else no deliveries.
The development will also have an impact on travel by South Sudanese abroad, as airlines now insist to be paid in US dollars, and fuel shortages are anticipated as the country simply lacks the money to pay for further deliveries. In addition, an inflationary tsunami is heading to South Sudan as the value of the local currency on the black market is expected to drop rapidly, making purchases of goods in Juba and other towns ever more expensive.
In 2012, a similar forex shortage resulted in Kenya’s Jetlink airline going broke as they were unable to repatriate over US$2.5 million worth of ticket sales money back to Kenyan banks, at the time affecting diplomatic relations as the business community in Nairobi demanded action from their government to protect them against such arbitrary defaults and refusals to pay outstanding bills citing the lack of foreign exchange.
