Dr James Alic Garang, the Governor of the Bank of South Sudan during awareness- creation conference in Juba February 2024 - Eye Radio/Lou Nelson

The Governor of the Bank of South Sudan stated that the government is committed to spending within its means to prevent budget deficits.

Dr James Alic Garang described the current economic situation as an “overdraft,” a term used to indicate a deficit caused by withdrawing more money than is available in an account.

He emphasized this as part of efforts to strengthen the economy amid South Sudan’s struggles with inflation and soaring commodity prices.

The local currency has significantly depreciated, impacting families’ ability to make ends meet.

To address this, Dr Alic announced that, as part of fiscal prudence, the government is implementing a zero-overdraft policy through its financial sector.

This approach ensures that government spending remains within its available revenue.

“The bank is an advisor to the government, the bank takes pride in fiscal discipline, fiscal prudence, and strengthening the tools that are within our powers,” said Dr Alic told Eye Radio in an exclusive interview over the weekend.

“When we are implementing cash and liquidity management framework, that’s a policy position that we know already is helping to regulate how much SSP is in the economy, so that’s one thing in our power,” he said.

“The second one is this attempt to work with all institutions, but particularly the minister of finance to reduce any attempt to play around with overdrafts, and the ministry of finance,” he said.

“The government has committed to zero overdraft that we will spend within our means if we don’t have we don’t spend, if we have we spend.”

Meanwhile, Governor Dr. Alic noted that the war in Sudan and other external factors have constrained the central bank’s ability to intervene in the market.

Despite these challenges, he assured that the government is actively working on various measures to address the issue.

“The war in Sudan has made it such that whatever little that we use to receive has become too small, and we are a country that depends so much on imports from other countries, and for you to import you need the US dollar,” Dr Alic said.

“The lack of hard currency has meant that our ability to intervene in the market has been limited, but this is not to say that we are totally out of our tools kits, no, we still have the tools, but it is just that they have been affected,” he said.

“While there is a crisis, while there is the issue with currency depreciation, we are not just holding our hands and calling it quit, we are working.”

Governor Dr Alic added that the government is focusing on strengthening the pound by enhancing the monetary policy framework.

This includes adjusting interest rates and reserve requirements to better control the money supply.