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Black Market, MPs spot on

On Monday finally the people’s representatives presented to parliament the real problem affecting the people. Festo Faustino Kumba the MP representing Ezo County of Western Equatoria state moved a motion seeking parliamentary   intervention into the now booming black market in the foreign exchange sector. Kumba was taken aback by the presence of double exchange rate, which exists in the country. Actually what exists today is not double exchange rate; it is one and that is the black market.  Officially the exchange rate of the South Sudanese Pound to United States dollar is 2.92. But this is all on paper because on the streets where more than 90% of money exchange transactions takes place,  the dollars buys as of yesterday, 490SSP for every 100US dollars. In real sense it is the black market is the one that governs the country. A common person cannot move to the central bank or these other outlets to get dollars; but those who have the right connections. This explains why the black market persists even when some time ago the authorities in Juba city had started crackdown on those involved in the illegal trade but never succeeded. The reason they did not is simple; because those behind it are very powerful. We get stories that the boys who sell foreign currency on several streets of Juba city get it from big men and women who pay them 10SSP for every 100US dollar sold. The existence of the black market that is stronger than the formal market is detrimental to the country because it completely erodes the central bank’s control of the exchange rate and also of foreign currency. The bank cannot know how much money has entered the country and how much is leaving because it cannot exercise control over those small boys who know nothing about monitory policy and money supply and demand. The fact that our economy is largely import based, it increases the prices of the imports, which in turn is a burden to our already burdened and poverty stricken citizens who pay the final price of the commodities. Black markets also lead to the repatriation of the hard earned foreign currencies, which the country badly needs for both recurrent and developmental expenditure. It has also contributed to the instability of the SSP because the black market operates in a speculation. Our currency is one of the most unstable in the region. In one month, the price of the dollar can increase more than 10 times because the black market survives and flourishes with hoarding to create artificial scarcity. Actually foreign workers and some locals prefer to be paid in dollars because for it predictable and relatively stable more than the pound whose stability is determined by people who don’t know how money markets work like. The time is now for the central bank to purge all loopholes that lead to the high hemorrhage of our foreign exchange. If there are elements that allow these absurd anomalies to go on; the weep must be cracked. We are under no illusion that some of the MPs are part of the beneficiaries, but we need them to be patriotic to arrest the situation before our economy collapses under our own watchful eyes. It was the parliament which frustrated efforts by the central Bank address the black market domain. It should first stop being the part of the problem before pointing figures against others.

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