South Sudan continues to face persistent liquidity challenges and a weakened South Sudanese Pound (SSP), reflecting deeper structural problems in fiscal and monetary management. Frequent dollar shortages, inflationary pressures, and limited confidence in the local currency have constrained private sector activity and eroded household purchasing power.
While these issues may seem unique to South Sudan’s post-conflict context, similar liquidity crises have confronted other nations such as Zimbabwe, Ghana, Nigeria, Argentina, and Rwanda. Their reform experiences offer valuable insights for South Sudan’s economic stabilization and growth strategy.
Zimbabwe: Restoring confidence through currency reform
The crisis
In the 2000s, Zimbabwe experienced a near-complete breakdown of currency and liquidity. At its peak, annual inflation was estimated at 89.7 sextillion percent in November 2008. Monthly inflation at one point even reached “79.6 billion percent” in November 2008. In more recent years, inflation averaged ~354 percent annually between 2019-2023.
One commentary note:
“Prices were doubling every 24.7 hours.”
And: The real hyperinflation happened … economy couldn’t produce more goods … more money chasing the same goods.”
Reform Measures
In 2009, Zimbabwe abandoned its own currency and adopted a multi-currency system (including US dollars and South African rand), which helped stabilise prices and restore some confidence. More recently, attempts to reintroduce a domestic currency have been accompanied by tighter controls and efforts at monetary discipline.
Key takeaway for South Sudan
Public confidence in currency matters as much as policy. Printing money without productive backing destroys liquidity. South Sudan must avoid monetising fiscal deficits and consider temporary multi‐currency flexibility while rebuilding macro-economic discipline and credibility.
Ghana: Managing liquidity through market and exchange rate reforms
The crisis
In the late 1970s and early 1980s, Ghana suffered severe foreign exchange shortages and a collapse of confidence in its currency (the cedi). One study found that exchange-rate volatility had significant negative effects on Ghana’s growth performance during that era. For example, the currency–deposit ratio rose to ~70% by the end of 1983 as people preferred holding cash to deposits.
Reform measures
Under the Economic Recovery Programme (ERP) launched in 1983, Ghana implemented structural reforms:
- Currency devaluation to align with the market.
- Liberalisation of foreign exchange and trade.
- Fiscal tightening and export support (especially cocoa).
More recently, the International Monetary Fund (IMF) noted that Ghana’s economy “is showing signs of stabilization thanks to the authorities’ steadfast implementation of its IMF-supported economic program.” And by May 2025, the cedi had “jumped more than 40% versus the U.S. dollar this year”, improving the country’s foreign debt burden.
Key takeaway for South Sudan
Exchange-rate realism and fiscal–monetary coordination are essential. South Sudan must ensure that the official exchange rate reflects market dynamics and supports non-oil exports to strengthen its foreign reserve base.
Nigeria: Oil dependency and the importance of market-driven foreign exchange access
The crisis
Nigeria has faced recurring liquidity stress tied to oil price collapses, foreign-exchange shortages, and distortions from multiple exchange-rate windows. The evolution of Nigeria’s foreign-exchange market shows that when supply tightens and controls are heavy, liquidity constraints and parallel markets emerge.
Reform measures
In April 2017, Nigeria introduced the Investors’ & Exporters’ (I&E) FX window to enhance transparency and liquidity for eligible transactions, allowing market-determined exchange rates. More broadly, the move to a managed floating system helped unify FX access.
Key takeaway for South Sudan
Like Nigeria, South Sudan’s over-dependence on oil exposes it to foreign-exchange shocks. The government should pursue non-oil export diversification (e.g., agriculture, livestock, fisheries) while implementing transparent, rule-based management of oil revenues and foreign exchange access.
Argentina: Building credibility through transparency and external support
The crisis
Argentina has endured repeated liquidity crises due to fiscal imbalances, high inflation, and loss of currency confidence. While not Africa-specific, the lessons on institutional credibility and external anchor points are relevant.
Reform measures
Argentina has relied on large IMF-supported programmes combining capital controls, fiscal consolidation, inflation-targeting frameworks, and institutional reforms. These efforts aim to rebuild trust both domestically and with international investors.
Key takeaway for South Sudan
Transparency, credible institutions, and central bank independence matter deeply for liquidity recovery. Investors and donor partners respond positively when public finances are transparent, and policy direction is clear.
Rwanda: Discipline and diversification in post-conflict recovery
The crisis
In the aftermath of the 1994 genocide, Rwanda faced near-total economic collapse. The currency had lost most of its value, public institutions were severely weakened, and liquidity was nearly non-existent.
Reform measures
Rwanda’s recovery hinged on:
- Strict macro-economic management and credible budgets.
- Export promotion (coffee, tea, tourism) to build foreign-exchange inflows.
- Financial-sector reform, building savings and investment capacity.
Key takeaway for South Sudan
Stability is built through institutional strength, not only monetary tools. Rebuilding trust in the banking system, strengthening governance, and diversifying the economy are fundamental to sustainable liquidity and growth.
Lessons for South Sudan
South Sudan can draw important lessons from the experiences of other countries that have faced similar economic challenges. To restore confidence in the South Sudanese Pound (SSP), the country can learn from Zimbabwe and Ghana by maintaining strict fiscal discipline, avoiding excessive money printing, and ensuring transparency in the operations of the Central Bank. To address dollar scarcity and distortions in the parallel market, lessons from Nigeria and Ghana suggest introducing foreign exchange (FX) windows, adopting market-based exchange rates, and ensuring transparent management of oil revenues. Like Nigeria, South Sudan should also reduce its overdependence on oil exports by diversifying the economy into agriculture, livestock, fisheries, and small-scale manufacturing to generate foreign currency. Drawing from Zimbabwe and Argentina, tackling inflation and economic instability requires a focus on macroeconomic stability through coordinated fiscal and monetary policies supported by credible institutions. Finally, Rwanda’s experience highlights the importance of strengthening institutional trust by building the capacity of economic governance bodies and enforcing strong anti-corruption and oversight mechanisms.
Policy recommendations
- Adopt a dual-liquidity strategy:
Maintain a temporary multi-currency regime (SSP + USD) to stabilise transactions while gradually rebuilding confidence in the South Sudanese Pound. - Enhance central bank credibility:
Strengthen the independence of the Bank of South Sudan (BoSS), publish regular monetary-policy reports, and refrain from deficit financing through money printing. - Diversify export earnings:
Accelerate investment in agriculture, livestock, and fisheries to generate non-oil foreign-exchange inflows. - Reform foreign exchange management:
Establish a market-based FX auction/window system for private-sector transactions, like Nigeria’s I&E model. - Improve fiscal transparency:
Publish oil-revenue reports, strengthen the Public Financial Management (PFM) system, and ensure open data to attract investor and donor confidence. - Deepen regional integration:
Strengthen financial cooperation with the East African Community (EAC) to benefit from regional liquidity mechanisms, currency stability frameworks, and development finance partnerships.
Conclusion
Liquidity crises are not insurmountable—they reflect both structural weaknesses and confidence deficits. Countries that have overcome them did so through discipline, diversification, and transparency. For South Sudan, the path forward lies in restoring trust in its currency, strengthening fiscal governance, and leveraging its natural and human capital to build a resilient and inclusive economy. Economic stability is not born from oil revenues alone, but from sound institutions, prudent management, and a shared national commitment to reform.
The Author, Simon Kuony Jial, can be reached via kuonyjial@gmail.com.
The views expressed in ‘opinion’ articles published by Radio Tamazuj are solely those of the writer. The veracity of any claims made is the responsibility of the author, not Radio Tamazuj.