JUBA, March 15 (Xinhua) -- South Sudanese central bank on Thursday launched an ambitious five-year strategic plan to tackle hyperinflation and revitalize the oil-dependent economy battered by more than four years of conflict.
Bank of South Sudan Governor Othom Rago Ajak said the Strategic Plan Year 2022 will help transform the central bank, regain lost credibility and help in fostering and ensuring price and financial system stability within five years.
"It has taken a year for the Bank of South Sudan to produce this plan which we hope will culminate in required transformation during the coming five years.
"We have taken into consideration the fact that the ongoing conflict has adversely affected our production in the non-oil economic activities causing serious decline in national output and great disruption in the lives of people," Ajak said during the launch of the plan in Juba.
The strategic plan involves among building a new bank headquarters, increase public exchange reserves, organize its system and operation and build its diplomatic capability as well as its human resource capacity.
This came after President Salva Kiir conceded on Tuesday during the swearing of the new Finance Minister Salvatore Garang that his government has not yet found an effective solution to the economic troubles facing the world's youngest nation, amid warning by humanitarian agencies that seven million people risk starvation in the country.
"The attempted forceful taking of power has brought us now to this stage where we have no money in our bank," Kiir reportedly said.
Ajak disclosed that low-oil production, lack of diversification in the economy and drop in international oil price have led to significant reduction in the central bank's international reserves and also affected commercial banks negatively.
"Our economy's high dependence on oil and low growth and contribution of non-oil sector has impacted on government budget and public service delivery. Unpaid arrears have been accumulating and fiscal deficit has been widening, leading to an increase in money supply and rising inflation," he added.
Finance Minister Garang said the strategic plan is a good development that will ensure the bank becomes an international institution.
Vice President James Wani Igga called for respect of the apex bank's rules and guidelines, warning against the continued interference in the bank's affairs.
"Interferences can disable any central bank," Igga said and pointed out that the central bank should use the interest rate as a tool to accomplish its goal, noting that modern economies are intrinsically linked to interest rate levels.
South Sudan descended into violence in December 2013, after political dispute between President Salva Kiir and his former deputy Riek Machar led to fighting mostly between Dinka ethnic soldiers loyal to Kiir against Machar's Nuer ethnic group.
The 2015 peace agreement to end the violence was again violated in July 2016 when the rival factions resumed fighting in the capital forcing Machar to flee into exile.