For the last few weeks transfers of money from southern Sudan to the rest of the world has been hampered due to the latest directives from the Bank of Southern Sudan. This has restricted the sending of money, especially with the Forex Bureaus operating in Juba. Miraya journalist Shila Keji Modi investigates the situation.
Transcript
‘We are suffering getting dollars is a problem sending is a problem now all the bureaus are closed they are saying the target is over...'
Bancy Wanja is one of the customers of Dahabshil Forex bureau... She explains her frustrations after finding the forex bureau closed due to the Bank of south Sudan‘s latest policy.
Recently the bank of south Sudan introduced some foreign exchange controls, restricting commercial banks and forex Bureaus from enjoying huge margins on foreign exchange transactions they'd been used to, and implementing strict reporting systems that will ensure that the bank of southern Sudan controls the movement of hard currency within this market. The Bank of Southern Sudan (BOSS) which is the Central Bank of Southern Sudan supervises the banks and forex bureaus operating here. Elijah Malok is the president of the Bank of southern Sudan...
Elijah Malok clip
"There are some of those forex bureaus who have authority to transfer money out meaning if you have your money and you are transferring money you go to X or B forex Bureaus you deposit your money and it is transferred to the account of the interested persons, this is to avoid the possibility of people having money in their pockets and selling money in the black market. We have become aware that everybody else sells dollars in Jebel kujur and some unwarranted places and this lands itself to an abuse in terms of the economy therefore we have become more strict about the use of foreign currency. I want the public to know that it is not enough with the little money we get from the selling of Oil is strictly the one we receive for the running of the government services. Therefore the forex bureaus have instructions from us not to overcharge and we are following them that if we sell the dollar to them at 2.33 Sudanese pounds then they should add only point 004 it means that they will sell it at 2.36 and therefore it becomes cheaper is not terrible expensive."
According to Paul Gitahi the chief executive of Equity bank southern Sudan limited, this policy will certainly make business more difficult but it will have a positive impact on the economy.
Paul Gitahi clip
"This economy is a net importer we solely need hard currency to support import business, in the long run there is a good impact on it because it will streamline trading, most of the trading now will be formalized and people who never used to go through the banking system and banking system and commercial banks now support import trading the effect will be felt in the short run but in the long run the economy will benefit. So as a bank we are adjusting ourselves to this changes we've started reporting on a daily basis to the bank of southern Sudan and we are getting close guidance on how this is going to be implemented."
When I visited Dahabshil Forex bureau, there was a long queue and the customers there were complaining since they didn't seem to understand, why the forex bureau was not operationing as it used to and they are now only allowed to send a maximum of five hundred dollars.
Some customers tell their story:
Customer 1: Am even surprised that Last week they didn't work, today that they were given a limit.
Shila Modi: Did they give you any reason why this is happening?
Customer 1: aaaaah no no no.
Customer 2: Am called Riak Jonin, I come in the morning at around 8:30am and I found there was a queue so many people were waiting so I've tried to enter but it has been impossible, and I was told that the government has made a restriction that people should be sending a hundred dollars and the bank should be working once a week that is Monday.
Shila Modi: is this policy going to favour other people who have families outside South Sudan?
Customer 2: No, that is already a problem to all of us who have families, who have children we are supporting. It has been a critical situation. I've been trying since Friday but I've failed.
Shila Modi: So where are you transferring your money to?
Customer 2: am transferring to Kampala and Nairobi.
Customer 3: My name is Bancy wanja we are in fact having a problem, because now we have queued from morning, the line has been so long and now they have not helped us and they are already closing. They are saying that their target has reached an end.
This policy is expected to have adverse effects on the forex bureaus because of the margins they have been realizing on cash transactions which will drastically go down. Zeinab Bilal is the manager of south Sudan forex bureau and the vice president of the forex Bureaus in southern Sudan.
Zeinab Bilal clip
"The limit as I said a day if they give us twice a week we can offer some people two hundred, three hundred, four hundred. The rate is quiet good in the forex now its 2.41 that is for a dollar but if you go outside its 2.80 and we are trying to control that but we talked to Boss if they can assist us with more money that will destroy the market outside."
With this new policy banks have been asked to open letters of credit. Alemu Muabara, the managing director of Buffalo Commercial bank says this is a good start and he has started implementing the regulations by the Bank of southern Sudan.
Alemu Muabara Clip
"This is not a peculiar role in south Sudan this actually the letter of credit is implemented and being worked out actually though out the world. So this is in line with best practice in Banking and the international standard and it shouldn't be a problem or accordingly we have to only raise awareness among our customers because for so long all imports have been handled in southern Sudan particularly in Juba by transferring money fast and then getting their goods later on."
Nile Commercial Bank is one of the biggest indigenous Southern Sudanese banks the acting manager Michael Marino says his bank has been offering the letters of credit for the past six years
Michael Marino Clip
‘Nile commercial bank I think is the first here in south Sudan to deal in this trade we are opening letters of credit we are giving people letters of guarantees. And so to encourage the importers to do deal through the channels of the financial institutions like banks we are also encouraging they open account'.
This new policy is eventually expected to benefit the community so that the prices can be regulated and the economy of the south can grow. But the impact is likely not to be immediate... and it will take some time for Forex Bureau managers and customers to get used to these recent measures.
