Hon. Johnny Ohisa Damian
Governor of the Bank of South Sudan
During the COVID-19 epidemic, just like several other nations across the world, the Bank of South Sudan, BoSS, under the leadership of Hon. Johnny Ohisa Damian swiftly employed some strategic measures that stabilized the country’s economy.
Commercial banks were allowed to reschedule loan repayment with clients in other to maintain the stability of the financial sector; the imposition of the Minimum capital requirement for a period of one year was suspended.
The Bank embarked on building international reserves by signing a memorandum with the Ministry of Finance to carry out all payments of government in local currency other than US dollars to ensure the accumulation of the reserves to intervene in the foreign exchange market.
Hon. Johnny Ohisa Damian, The Governor of the Bank of South Sudan in an exclusive interview with African Leadership Magazine reveals his intricate journey to personal and career success and expressed optimism on the economic growth rate of the African nation as well as the expansion of the commercial bank’s credit to the private sector.
Additionally, the Governor gave a quick insight into the purported ban on the US Dollar in the country.
The interview.
1. Please tell us about yourself, vis-a-vis your journey and career in the politics of South Sudan.
• My name is Johnny Ohisa Damian, the Governor of the Bank of South Sudan. I served in various capacities within the institution, notably as the Director General for Currency and Banking Operations in the Bank of South Sudan from May 17th, 2019, to April 30th, 2021. Then as the first Deputy Governor and acting Governor, leading to my current appointment as Governor by the President of the Republic, H.E. Gen. Salva Kiir Mayardit.
• Prior to joining the Bank of South Sudan, I worked as the Deputy Managing Director and later as Managing Director (MD) of the International Commercial Bank (ICB-SS) where I served for years. Prior to joining ICB-SS, I was employed by the United States Agency for International Development (USAID) as a Program Budget analyst and later as an Assistance Specialist and later a Senior Acquisition and Assistance Specialist for the United States Agency for International Development (USAID) in Sudan, Kenya, and the Democratic Republic of Congo (DRC). I also worked for World Vision International in Kenya.
2. According to Trading Economics global macro models analysis expectation, GDP Annual Growth rate in South Sudan is expected to reach 4.00 percent by the end of 2023. What are some of the policies and reforms of the bank to strengthen economic and public financial management systems in the country?
• We project that annual GDP will grow by 3 percent in 2023. To achieve this, the Bank targets to maintain inflation at around 8 percent and growth in broad money at around 11 percent by end of 2023. In addition, the limits the statutory minimum reserve requirement ratio (SRRR) at 20 percent. This will allow adequate liquidity for commercial banks to expand private sector credit from 20 percent to 40 percent by end of the year.
• The Central Bank Rate (CBR) has maintained the CBR between 10% and 15%. This is done to encourage commercial banks to lower their lending rates so that people can be encouraged to borrow money from them to boost the economy by the end of 2023.
• Open Market Operations: The Bank uses foreign exchange and term Deposit auctions to manage liquidity optimally. The Bank’s sale auctions withdraw liquidity from the system, while the purchase of foreign exchange injects liquidity into the system.
3. In recent years, Africa had to contend with economic shocks from the Russia war in Ukraine and the COVID-19 pandemic which affected millions of people dependent on the informal economy, and contract and casual workers in the formal sectors. What has been the response of the bank in cushioning the impact of the pandemic and building resilience against future shocks in South Sudan?
The Bank took several measures aimed at mitigating the adverse effects of COVID-19 Pandemic as follows:
• Reduction of the CBR by 500bps from 15% to 10%. Suspend the imposition of the Minimum capital requirement for a period of one year. Commercial banks were allowed to reschedule loan repayment with clients. That helped maintain the stability of the financial sector
• The Bank embarked on building international reserves by signing a memorandum with the Ministry of Finance to carry out all payments of government in SSP other than US dollars. This allowed the Boss to accumulate international reserves to intervene in the foreign exchange market.
4. Kindly tell us about the regulatory environment and some of your reforms to strengthen and inspire confidence in the country’s banking and financial systems.
• The Banks stepped up to strengthen the regulatory environment by introducing Risk-based supervision. The rescinded license of two banks.
Banks must meet the regulatory requirements of supervisors and manage their affairs accordingly.
5. The Bank of South Sudan recently suspended the use of the US dollar and instead directed all transactions be executed in the local currency, the South Sudanese pound (SSP). How has the economy responded to this policy, vis-a-vis other policies aimed at strengthening the SSP?
• The Bank did not suspend the use of dollars as stated by the media but emphasized the need to use the SSP as legal tender for all types of transactions. This is the requirement by the law. However, US dollars and other foreign currencies are trading freely in the South Sudan market. Following that announcement, many businesses are pricing their goods and services in SSP equivalent.
• The economy did not react because the transactions which were being affected in US dollars like rent, fees, traveling industry, hotels, entertainment services, restaurants, commercial outlets, and as well as the private services contracts and monetary dealings remained the same because BoSS still has not put the monitoring mechanism to affect the directives.
6. Since your appointment as 1st Deputy Governor and Governor of the Bank of South Sudan, what would you say are some of your achievements?
Achievements:
• Stopped issuing of all overdrafts to the government of South Sudan which has significantly reduced the growth rate of broad money.
• Introduced and operationalized for the first time, an indirect monetary policy tool. The Term Deposit Facility (TDF) is now complementing the use of FX which affect our reserves badly.
• Signing memorandum of understanding with the Ministry of Finance to operationalize setting up single treasury account in BoSS.
• Initiation of Term deposit Facility (TDF) as a monetary policy tool to mop
up the excess liquidity in the markets.
