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18:32:09, Saturday, 25 Mar 2017
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Pound for pound

A brand new currency will rank high among the trappings of sovereignty that the Republic of South Sudan is expected to acquire after the formal proclamation of its independence in early July.

 

The National Congress Party and the Sudan People’s Liberation Movement (SPLM) reached an agreement in March giving the south a green light to issue its own national currency after last January’s Southern Sudan referendum on self-determination produced a landslide vote in favour of secession from the rest of the country.
 
The South Sudan pound will feature the visage of the late SPLM founder John Garang de Mabior on the front of the bank note. A variety of well-known landmarks like the White Nile River and illustrations depicting some of the new country’s natural resources will adorn the back.
 
The currency will be issued in six denominations ranging from one pound to 100, and four different coins will have values of one, five, 25 and 50 piastres.
 
The South Sudan pound will become the world’s 161st national currency, according to the World Factbook of the U.S. Central Intelligence Agency’s website. Some currency experts have already hailed its imminent debut.
 
“Great news for banknote collectors, there will be a new currency coming very soon,” trumpeted the Jays World Banknotes website last March. “This currency could possibly circulate as soon as this summer!”
 
Finance and Economic Planning Minister of the Government of Southern Sudan (GoSS) David Deng Athorbei told In Sudan that printing the bank notes has already commenced in a foreign country that he declined to disclose on grounds that its identity was “confidential”.
 
But press reports of a 29 March news briefing he addressed in Juba quoted the minister as saying that printing is taking place somewhere in Europe. Initial deliveries of the bank notes are expected after Southern Sudan officially becomes an independent country on 9 July.
 
Introduction of the new currency will gradually bring to an end the use of today’s Sudanese pound in the south that was created under the terms of the 2005 Comprehensive Peace Agreement (CPA).
During the Kenyan-mediated peace talks, SPLM negotiators insisted on replacing the Sudanese dinar as one more symbol of the Arabization that successive governments in Khartoum had sought to impose on southern Sudan.
 
Mr. Athorbei said the SPLM had tried to print its own currency before the end of the country’s second civil war. “We almost succeeded, but it was blocked because the Sudan government threatened to sue companies that were printing the money for us,” he said.
 
Sudan’s current monetary unit had a value of 2 Sudanese pounds to the U.S. dollar when it began circulating in 2007. Bank of Southern Sudan President Elijah Malok declined to say in advance at what exchange rate the new currency would be fixed when it makes its first appearance later this year.
 
Mr. Athorbei said that the South Sudan pound’s value would be subject to a “managed float” regime under which its exchange rate will be permitted to fluctuate on a daily basis.
 
But the degree of that fluctuation will be controlled by the South Sudanese central bank’s purchase and sale of currencies.
 
“This is going to protect our money because we have just come out of war,” said the GoSS finance minister. “I expect the South Sudan pound to be strong.”
 
The Sudanese pound should be completely phased out in the south by year’s end, while it will be retained in northern Sudan. Awad Abushouk, general manager of the Central Bank of Sudan’s (CBoS) issuance department in Khartoum, denied earlier reports that Khartoum might convert to another currency or revert back to the dinar, in use until 2007.
 
Mr. Abushouk noted that northern and southern finance authorities were discussing means of “resumption”, or compensation for the amount of pounds accumulated at CBoS’ Juba branch, which could be in US dollars or Euros, for instance.
 
While Juba was preparing for its new currency, North Sudan was aiming to issue the “second edition” of the Sudanese pound around July, said the issuance chief, based on CBoS’ forecasts about new currency demand.
 
Demand was calculated based on several variables, including trends of inflation rate, gross domestic product, increase in commercial activities like gold mining, and deterioration of existing banknotes, which in turn had to be destroyed.
 
While Khartoum would issue no new denominations of banknotes, the one-pound note might be changed into coin, said Mr. Abushouk. It has a fast rate of deterioration, becoming unusable within six months of circulation, which makes it a rather costly commodity.
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