The Acting Chairperson for South Sudan Chamber of Commerce, Industry and Agriculture, Lado Lukak Legge has called for reviving letters of credit to support local businesses navigate the prevailing economic hardship.
“The major problem that we cannot control is rising dollar exchange rate, when you go to market the prices are high because of the dollar exchange rate, if dollar exchange rate reduces it will be good,” Lukak told journalists at the chamber of commerce headquarter in Juba on Monday.
“Another problem is that we do not have Letters of credit to help national traders to bring goods from outside the country, if you do not have dollars you cannot import goods, we do not have local production and the goods are brought using dollars, we need support to deliver services across the country,” he said.
Lukak also congratulated prominent business man Benjamin Bol Mel upon being appointed presidential advisor on special programs.
The Sentry investigative report “Cash Grab” released last year, accuses South Sudanese leaders and shadowy businesses of embezzling millions of dollars in a massive credit scam dubbed letters of credit between 2012 and 2015 respectively.
The government of South Sudan received a credit line of nearly one billion dollars from Qatar National Bank (QNB) and CfC Stanbic Bank in Kenya to support efforts to import much-needed food, fuel, and medicine to the newly independent country.
The credit line issued in US dollars in the form of letters of credit was intended to help local traders pay for these imports, considering the extreme shortage of hard currency and the weakness of the new local pound.
But the letters of credit were abused as they turned into a money minting scheme for the well-connected local business owners.