Traders at the Ugandan border town of Bibia have complained that the introduction of separate currencies for Sudan and the new Republic of South Sudan has had a crippling effect on cross-border business transactions.
In July, Sudan introduced a new currency, the Dinar to replace the Pound, a currency previously used in the entire Sudan before the south seceded and celebrated its new found independence. The new nation also introduced its currency, the South Sudan Pound.
The traders now say that the changes have boosted the value of some currencies and lowered that of others considerably thereby affecting trade across the border. Richard Avola, a businessman at Elegu market, near the South Sudan border says that the introduction of separate currencies for both South and North Sudan has made it increasingly difficult to get a common currency for exchange.
Avola said previously, the dollar was commonly used as the major currency for transaction between the Sudanese and Ugandans. But this has since changed. He says the matter is compounded by the fact that officials in South Sudan consider it criminal for their citizens to carry or trade in Dinar, the north Sudan official currency. He says people found with the currency are jailed for six months, although it was not possible to independently verify this claim.
Tabu Charles, the chairman of the Bibia Business Community adds that the disappearance of the dollar following the introduction of separate currencies for South and North Sudan has weakened the Uganda shillings further.
He explains that for every 405 South Sudan Pounds, one gets 275,400 Uganda shillings while the same amount gets 100 Dollars in foreign exchange.
Tabu explains that as a result, Sudanese are able to buy a lot of goods from Uganda with a small amount of their currency while Ugandan traders require huge loads of shillings to buy very little goods from South Sudan.
Because of the depreciating value of the Uganda shilling, the prices of the commodities at the border post have tremendously shot up. A plate of food such as chicken and meat costs 7,000 shillings while a meal of beans goes for 4,000 shillings. Sugar is at 7,000 while a litre of Petrol costs 6,500 shillings. To buy a litre of diesel, one would require 5,800 shillings. The fuel is mainly brought from Gulu, about 150 kilometers away.
The traders have appealed to the Ugandan authorities to arrange a meeting with their South Sudan counterparts to devise ways of improving cross border trade among the countries.
Perhaps, fuelled by the depreciation of some currencies and appreciation of others, some traders in Uganda have resorted to smuggling goods that they sell at fairly low prices, which end up hurting other businesses.
John Bosco Ocan, the Bibia LC3 chairman observes that there is a very high level of smuggling in the area, an illegal activity that he says has been taken up by mainly the youth. He however says that they are closely working with the police and the Uganda Revenue Authority to combat the activity.
