(Juba) – A senior economist has attributed the persistent liquidity constraints in South Sudan’s banking system to entrenched structural weaknesses, calling for coordinated monetary and fiscal reforms to restore confidence and cash circulation across the economy.
Dr. Abraham Maliet, a macroeconomic analyst, told media in June 2025 that the scarcity of liquidity at the Bank of South Sudan and across commercial banks stems from a combination of weak productivity, informal revenue management, and public distrust in formal financial institutions.
“When there’s no economic activity, there is no money. It’s a linear relationship,” he said, warning that the country’s cash flow problem is symptomatic of broader inefficiencies in the macroeconomic environment. He noted that limited production and inadequate commercial banking incentives have eroded public participation in formal savings and deposits.
Citing fragmented fiscal practices, Dr. Maliet criticised government institutions for failing to consistently bank collected revenue.
“If there are no goods being sold in the market, there is no cash return. Even public institutions are not depositing money. That’s disrupting circulation,” he explained.
He emphasised the importance of developing customer-oriented banking services and restoring confidence in the financial system. “If depositors cannot access their money or gain any benefit from banking, they simply will not participate. At least 50% of deposits should remain accessible to encourage engagement,” he said.
The economist recommended that monetary authorities, including the Central Bank, collaborate with the Ministry of Finance to digitise payments. However, he warned that digital initiatives must reflect the country’s economic structure, where nearly 90% of the population operates outside formal channels.
“Digital finance is necessary, but we must acknowledge our reality. Inclusion is key,” he said.
Dr. Maliet further called for structured public education and robust regulatory oversight of mobile money platforms to protect users and stabilise informal monetary transactions. “There should be public awareness and regulation of digital money. The market cannot remain unregulated,” he said.
Addressing recent revelations of misconduct within the Central Bank, Dr. Maliet voiced concerns raised by the regulator’s current leadership, which alleged that staff solicit informal commissions of up to 10% when processing obligations. He attributed this to institutional breakdowns, economic stress, and a culture of preferential treatment.
“These practices stem from lack of control, poor management, and the perception of privilege. It’s harmful to national development,” he said. “The Bank should review internal policies, provide small incentives to improve staff behaviour, and embed training in financial ethics.”
He outlined a clear separation of responsibilities between core financial institutions. “The Minister of Finance must lead on resource mobilisation. The Bank of South Sudan should concentrate on protecting reserves and maintaining monetary stability,” he advised.
Dr. Maliet urged the Finance Ministry to strengthen external financing strategies by leveraging the country’s underutilised natural wealth. “We have immense resources. They must be promoted. That’s where the money is,” he added.
He concluded by underscoring the need to formally integrate more citizens into the economic framework to ensure resilience and equitable growth.
“We must actively move more people into the formal economy. That’s the foundation of long-term liquidity.”
The comments come as South Sudan continues to face chronic cash shortages, limited credit availability, and declining trust in its financial institutions. As of June 2025, the South Sudanese Pound trades at SSP 4,650 per USD at the official rate, and up to SSP 7,000 per USD on the parallel market, an indicator of persistent pressure on foreign reserves and institutional credibility.