[OPINION] – South Sudan’s Currency Gamble With UAE

South Sudan’s UAE Currency Deal: Promise and Peril

The deal between South Sudan and the United Arab Emirates has two very different sides. One looks promising, the other risky.

The potentially positive side
Technical and security benefits: The UAE has advanced currency printing and anti-counterfeiting technology. This could improve the physical quality and security of the South Sudanese pound (SSP), reducing counterfeiting and helping restore public trust.

Payments modernisation

A national payment card system could reduce dependence on cash, speed up transactions, and strengthen the banking sector, all positive steps for long term monetary stability.

Capacity building

Training staff at the Bank of South Sudan could enhance governance and financial management skills.

The dangerous side
Inflation risk

Printing more money when the economy is not growing fast enough almost always reduces the currency’s value. For South Sudan, where production is limited, imports are high, and confidence is fragile, this could fuel rapid inflation or even hyperinflation.

Perception problem

Even if the UAE prints secure notes, the real question is why more money is being printed. If markets believe this is just “monetising” a deficit i.e. covering government spending by creating money, they will expect the SSP to weaken further. That expectation alone can drive inflation.

Dependence

Outsourcing currency printing and payments infrastructure gives a foreign partner influence over critical monetary tools. This could become a geopolitical vulnerability.

Bottom line
The technical upgrades and banking modernisation are welcome. But if the real purpose of this deal is to print more money to cover fiscal shortfalls, inflation is almost inevitable. The stability of the SSP will not come from better quality notes but from disciplined monetary policy, controlled government spending and genuine economic growth.

If South Sudan combines the UAE partnership with strict limits on money supply and pursues real reforms, the deal could help. If not, the new notes may end up being nothing more than better looking paper in a weaker currency.

Malek Deng Arop is a South Sudanese political and economic commentator.