(JUBA) – The South Sudan government has ordered businesses and individuals to use the South Sudan Pound, SSP, for all commercial transactions, ending the widespread use of the United States dollar in local trade and contracts.
The directive, issued through the Bank of South Sudan, requires all commercial agreements, payments and transactions within the country to be conducted in local currency as part of wider efforts to address the country’s economic difficulties and stabilise the financial system.
South Sudan’s Information Minister Michael Makuei Lueth said the order from the central bank was clear and applied to all commercial activities across the country.
He said all transactions and commercial contracts must now be conducted and signed in South Sudan Pounds.
The move is expected to have a major impact on businesses operating in South Sudan, particularly importers, hotels, restaurants, travel companies and regional banking groups that have traditionally relied on the US dollar because of inflation and instability in the local currency.
Banks operating in South Sudan, including subsidiaries of Kenyan lenders such as KCB Bank, Equity Bank, Stanbic Bank and Co operative Bank, are likely to face operational adjustments as businesses transition towards mandatory SSP transactions.
For years, the US dollar has remained the preferred currency for many businesses and consumers in South Sudan due to rapid inflation, exchange rate volatility and declining confidence in the SSP.
Economists say the heavy use of foreign currency in domestic trade reflected broader concerns about price stability and purchasing power in the local economy.
The latest policy forms part of recommendations proposed by a committee appointed by President Salva Kiir to respond to South Sudan’s worsening economic crisis.
Business operators are now expected to review pricing systems, supplier agreements and payment structures to comply with the directive.
Analysts warn the decision could create short term pressure on businesses that depend heavily on imports, as many suppliers outside South Sudan continue demanding payment in US dollars.
Importers may also face additional exchange rate risks if access to foreign currency remains limited through official banking channels.
South Sudan’s economy continues to face pressure from years of political instability, conflict related disruptions and heavy dependence on oil exports.
The country’s oil industry remains the main source of government revenue and foreign currency earnings. However, production has faced repeated disruptions since the outbreak of conflict several years ago.
South Sudan currently produces about 170,000 barrels of oil per day, although the government reportedly receives net revenues equivalent to about 50,000 barrels per day after contractual obligations, transit fees and payments to oil companies are deducted.
Economic experts have repeatedly warned that dependence on oil revenues leaves South Sudan vulnerable to external shocks, including global oil price fluctuations and production interruptions.