Pound losing against Shilling in Kajo-Keji County
21 November 2011 - With no banking facilities in Central Equatoria State's Kajo-Keji County, the value of the South Sudanese Pound (SSP) against the Uganda shilling has dropped sharply and dollars are hard to find.
After the Nile Commercial Bank branch in the county was declared insolvent in 2010, leaving no other banks to set exchange rates, it became difficult to determine monetary values and obtain hard currency.
"It is hard to get dollars here," said Charles Lodu, a small-scale trader at Wudu Trading Centre, the county's main outlet. "Anyone who wants to buy dollars has to go to either Juba or to Yei before he goes to Uganda to buy his goods."
Mr. Lodu said that 1 SSP ($0.37) was worth about 1,000 Uganda shillings ($0.40) according to the bank rate, but that 1 SSP came to only 500 shillings ($0.2) in the county, about half the value of the pound.
Kajo-Keji County Commissioner Muki Batali Buli blamed traders for overcharging goods, adding that he saw no reason for that as the county was nearer to Uganda than Juba and prices should be less.
"In business, you gain from one product and lose in another," Mr. Buli said. "To the contrary, our people only want to gain."
He noted that a 300-millilitre bottle of water cost 2 SSP ($0.74) in the county, but that it went for only 1 SSP ($0.37) in Juba. "One wonders why such a huge difference exists. The problem is that traders determine every price based on dollar market rate."
Mr. Buli further observed that the free market economy adopted by the South Sudanese government undermined its capacity to dictate market prices.
But World Bank Private Sector Development Consultant in Juba Spencer Kenyi said in a recent interview that there was nothing like a "pure" free market economy on earth.
"Most economies dangle between 'free market' and 'mixed market' systems," Mr. Kenyi said. "All we need is a good mix of free market principles that pertain to our trade environment and some good qualities of mixed economy."
Yet favorable competition from other nationalities could help curb skyrocketing prices (in Juba), said Commissioner Muki, which had been made impossible by the lack of roads to the town.
The road to Juba is poor and its skeletal bridges covered with stones. Vehicles jolt heavily as they strain to reach the other side.
"It is my prayer that once the road to Juba is finished, it will allow for investors to flock to Kajo-Keji for business," he said.