Can the South Sudan Finance minister “walk his talk” by stopping the issuance of bank overdrafts?

The Minister of Finance and Planning said that he would no longer provide bank overdrafts and will instead inject additional US dollars into the market. Dier Tong Ngor also said that in order to stabilize the economy, the government would raise non-oil income.

“The reason for the volatility in the currency rate is due to a large number of overdrafts that were issued before,” he said. “We have decided that all overdrafts will be terminated immediately.”

An overdraft is a bank account shortfall produced by withdrawing more money than the account has. It happens when there isn’t enough money in an account to fund a transaction or withdrawal, but the bank nonetheless authorizes it.

Minister Dier Tong blames the decreasing economy on the issuing of overdrafts and says the scheme would be discontinued immediately. South Sudan is now dealing with high inflation and commodities prices.

The local currency has plummeted to the ground, leaving people scrambling to make ends meet. Finance Minister Dier said that his ministry and the Central Bank would also grant hard money to dealers for the importation of basic goods in the markets in order to stabilize prices.

“The Ministry of Finance and the Bank will work together to ensure that we pump enough foreign currency into the market to stabilize the exchange rate,” he added. “We also need to undertake steps to boost revenue collection, both in non-oil income and in ensuring that all cash generated by oil sales is sent to the government’s coffers.”

“As a result, we would be able to ensure that these resources are distributed to match the country’s spending objectives.” After meeting with President Salva Kiir, Dier spoke on state-run television, SSBC, yesterday evening.

President Salva Kiir asked Minister Dier Tong to restore the economy last week. However, academics claim that one of the problems impeding the country’s economic recovery is a lack of a diverse economy, as seen by the soaring costs of commodities.