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JUBA / WASHINGTON - South Sudan's central bank said Friday that it planned to ban the use of foreign currency nationwide to prevent further depreciation of the South Sudanese pound against the U.S. dollar after prices of food and other basic commodities have skyrocketed in recent weeks and months. 

Juba resident Saida Juan said prices were higher each time she headed to the market. The mother of seven said a kilo of meat, which sold for 700 South Sudanese pounds a few months ago, now costs 2,500 South Sudanese pounds, an increase that means her family can afford to eat only green vegetables these days. 

She called on government officials to do everything in their power to stabilize prices. 

"Traders selling goods in the markets have been blaming the price hikes on the increase in the exchange rate of the South Sudanese pound and the U.S. dollar. My message to our leaders is that they should try by all means possible to not allow foreign currency to dominate our markets, because the dollar is not our currency. We are really suffering," Juan told South Sudan in Focus. 

FILE - A man walks past several mobile money kiosks in Juba, South Sudan, Sept. 10, 2019.

On Thursday, the Business Committee of South Sudan's National Assembly summoned Bank of South Sudan Governor Gamal Abdallah Wani, Finance Minister Salvatore Garang Mabior, and Erjok Bullen, deputy commissioner of the National Revenue Authority, to answer questions about the depreciation of the South Sudanese pound.  

Wani attributed the country's high inflation rate to the 62% drop in international oil prices, ongoing violence in parts of the country, and increased military spending.  

South Sudan earns only $4 to $6 per barrel of crude today, or $30 million a month. In 2011, South Sudan earned $900 million a month from oil exports.  

Wani told the committee the Bank of South Sudan would issue new regulations banning the use of foreign currency, adding "everybody is carrying foreign currency illegally." 

Government-approved exchanges should be the only entities exchanging pounds for dollars, Wani said. 

"That is why we need the national payment system, because we don't know how much is going out in terms of the outflow and we don't know how it is coming in terms of the inflows. The outflows, 50 million, hundreds of millions, what is it for? Is it to buy weapons to come and overthrow the government, or what is it for?" Wani told the committee. 

On Friday, the exchange rate was $1 for 500 pounds on South Sudan's black market. 

The official rate hovered just above $1 to 55 pounds.  

Economic state of emergency in Sudan

In Sudan, the government declared an economic state of emergency to curb the country's skyrocketing inflation and rapid depreciation of the Sudanese pound. The government has formed a joint security force and special courts to arrest and punish people who engage in smuggling or illegal trading of foreign currency. 

Sudan's acting Finance Minister Hiba Mohamed Ali blamed the steep drop in the value of Sudan's currency on smugglers and currency traders who she said are deliberately trying to sabotage Sudan's economy and stifle the transitional government.

"The dollar has increased at a maddening rate on the parallel market," she said. "We have followed this with our colleagues in the security sector and their reports have indicated this is a systematic plan of sabotage through the use of forged currency, speculation in gold prices, and buying at high costs and refusing to sell," Ali told reporters Thursday in Khartoum. 

FILE - A merchant in the Central African Republic shows Sudanese bank bills, Dec. 20, 2017.

In July, Sudan's Central Bureau of Statistics recorded an annual inflation rate of 143%, after June's inflation rate of 136% and May's rate of 114%. On Friday, $1 was selling for close to 300 Sudanese pounds on Sudan's black market.   

The Sudanese government is enacting urgently needed security and legal measures to crack down on smugglers of gold and subsidized goods, Ali said. 

"We hereby activate a state of economic emergency, the formation of a joint force to protect the Sudanese economy, which will be comprised of the army, the police, the rapid support force, the general intelligence, and the customs authorities," Ali announced Thursday.  

The unprecedented move was triggered by the rapid depreciation of the Sudanese pound against the dollar, said Suliman Baldo, a senior adviser at the Sentry, a Washington-based organization that tracks corruption in African governments.   

"In the space of some 40 days, the dollar has passed from 150 or 140 Sudanese pounds to the dollar to some 300. Therefore, the rate of depreciation was very ominous," Baldo told South Sudan in Focus. 

Baldo said the government must do more than crack down on illegal traders to turn around Sudan's "economic crisis."  

Sudan's Central Bank should implement restrictions on the amount of money people can withdraw in a day, monitor the circulation of cash in the country and bring military spending under the oversight of the finance ministry, said Baldo.   

"The government really needs to take tough actions to try to basically stop dealings in cash, you know, Sudanese dealing in big sacks of Sudanese pounds," Baldo told VOA.