In a bid to minimize cash outflows, South Sudan on Tuesday said the maximum amount that could be allowed for travelers abroad is only 10,000 dollars in cash, as the country continues to work towards stabilizing its weak economy following years of conflict.
Michael Makuei Lueth, Minister of Information and Broadcasting, said the cabinet recommended this new measure following findings by the economic cluster committee which was set up by President Salva Kiir to investigate mismanagement of non-oil revenue collection.
While speaking to journalists after the weekly cabinet meeting in Juba, Makuei said “in a bid to minimize cash outflows, The maximum amount that could be allowed for travelers abroad is only 10,000 dollars because it is realized that most of the people travel with lots of money. Any other amount should be done through official banks.”
Since the revitalized peace deal to end over six years of conflict was signed in 2018, the South Sudanese Pound (SSP) increasingly depreciate against the U.S. dollar as the country’s economy struggles with hyperinflation.
In addition, revenue from crude oil which is the country’s major source of income, has reduced because oil-producing countries have had to cut production due to drop in global prices which was caused by the COVID-19 pandemic.
In August, The Central Bank of South Sudan announced that its foreign reserves had hit their lowest point, which now puts more strain on efforts to achieve economic recovery.
“The issue of over-drafting was one of the issues that depleted the resources and weakened the Bank of South Sudan, so the issue of over-drafting has been completely stopped and the minister of finance has been directed to stop the issuance of an overdraft,” said Makuei.
He further disclosed that tax exemption on non-essential goods entering the country will be scrapped, as the government aims to widen non-oil revenue collection.
“It was agreed that there should be no more tax exemptions which are taking away revenue from us,” said Makuei.
The minister revealed that in order to to cushion the economy from the effects caused by the COVID-19 pandemic, the country had secured 250 million dollars from African Export and Import Bank (Afreximbank).
“This amount of cash will be used to cover all the costs and to facilitate payment of all outstanding debts and then after we start afresh from the very beginning. The payment of the loan will be in the form of oil and this will be in installments,” said Makuei.
He also made it known that a 5 percent cash inducement to staff working in the various revenue-generating institutions had been approved, as an incentive to help tame corruption and boost revenue collection.
“These revenue-generating institutions at times you find that there is misappropriation and as such, it is passed that 5 percent of whatever revenue generated by that institution should go to the working force at that institution. This would go to them as motivation so that they continue to produce more,” said Makuei.