Part 2 - Letter to Dr. Marial Dongrin Ater: addressing cash shortages, a strategic roadmap for the Ministry of Finance and Planning and the People of the Republic of South Sudan

By Baak Chan Yak Deng, Wau South Sudan

Date 04^th July 2025

Dear Hon. Dr Marial Dongrin Ater,

Minister of Finance and Planning,

Republic of South Sudan - Juba

In times of financial stress, when the nation faces a shortage of cash in banks and public reserves, swift and effective action is crucial. Such challenges not only threaten economic stability but also erode public trust. To navigate this complex situation, it is essential for the Ministry of Finance and planning, in collaboration with the central bank, commercial banks, the business communities and the people, to adopt a comprehensive and strategic approach.

Short-term Measures that restoring Immediate Liquidity

When the cash shortage is acute, immediate steps are necessary to ensure the flow of money, below are the personal opinion under the short-term to be taken into consideration:

Enhancing Bank Lending:  If the shortage is due to a lack of available credit, the Minister might announce measures to increase bank lending to businesses and individuals. This is one of the quickest ways to alleviate cash shortages is to stimulate lending to businesses and individuals. This can be achieved by lowering reserve requirements, offering government-backed loans, or providing incentives for banks to extend credit, thereby boosting economic activity and liquidity.

Central Bank Intervention: The central bank plays a pivotal role by injecting liquidity directly into the banking system through open market operations, reducing interest rates, or providing emergency loans to struggling banks. These measures help stabilize the financial system quickly.

Emergency Cash Releases: The Ministry of Finance can release additional cash reserves from the treasury to banks for immediate circulation. Clear guidelines on the use and management of these funds are essential to prevent misuse and ensure they serve their intended purpose.

Temporary Suspension of Certain Regulations: The Minister might temporarily suspend certain regulations or relax certain regulations, such as capital requirements or interest rate caps, to facilitate the flow of cash. However, this must be carefully considered as it can have unintended consequences if not managed correctly to avoid potential adverse effects.

Increased Currency Printing: While this is often a last resort due to its potential inflationary impact, increasing currency circulation through printing may be necessary but it must be approached with caution due to a risk.

Medium-term strategies, building resilience and preventing future shortages

To addressing cash shortages at their root caused it has required sustained efforts from the government and the public and below viewpoints are recommended;

Modernizing Banking Infrastructure: Investing in digital payment systems like MOMO, M-Gurush, including modernizing ATM networks, and expanding access to banking services especially in underserved areas are vital steps toward a more resilient financial system.

Strengthening Financial Regulation: Implementing robust regulation the minister might announce measures to strengthen financial etiquettes to reduce systemic risks and improve the overall stability of the banking sector.

Driving Sustainable Economic Growth: Sustainable economic growth is essential by promoting investment, increasing employment, and boosting economic confidence will naturally increase demand for cash and reduce the likelihood of shortages.

Promoting Digital Payments: Encouraging the adoption of digital payment methods can reduce the need for physical cash transactions, making the economy more adaptable and less vulnerable to shortages. This often requires building public trust and addressing concerns about security and accessibility.

Key Principles for Success and crucial consideration

Any intervention must be guided by fundamental principles as suggested below;

Transparency: The Minister's report should clearly outline or communicate the causes of the cash shortage and the rationale behind the proposed measures. By doing this it will build public trust and understanding.

Accountability: The measures should have clear timelines and performance indicators to ensure accountability and track progress are effective and any adjustments can be made as needed.

Collaboration: The successful solution or resolution and collaboration will depend on the coordinated efforts of the central bank, commercial banks, the Ministry of Finance and the public as well.

Impact Assessment: The proposed measures should be rigorously assessed or evaluated for potential unintended consequences including inflation, market volatility.

In Conclusion, While the specific circumstances of each cash shortage may vary, these broad strategies offer a resilient framework for governments and citizens alike. By acting decisively, transparently, and collaboratively, the Republic of South Sudan can overcome current challenges and lay the foundation for a more stable and inclusive financial future.

Let us commit to these principles and work together towards economic stability and growth.

Best regards, 

Baak Chan Yak Deng (MAF)
South Sudan Economics Commentator
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Part 1 - Letter to Dr. Marial Dongrin Ater: Request for Strategic Framework to Regulate the Banking System in South Sudan