Businesses shut down at Uganda-South Sudan border as currency value falls

Businesses at Uganda – South Sudan border have crumbled as the South Sudan Pound forex rates hit a record low (FILE PHOTO)

ELEGU– Life at the Elegu border market in Amuru district has slowed down as businesses shut down due to the fluctuating value of the South Sudanese pound.

The market on the border of Uganda and South Sudan has failed the traders as business has failed to thrive due to the fluctuating currency and calamities that ravaged the market.

Mr Mansoor Lutugoro one of the currency dealers at the market couldn’t imagine how his family members will survive to look at the drastic depreciation in the South Sudanese pound compared to other international currency such as the Uganda Shilling. He said the South Sudanese pound had recently dropped to 1 pound for 11 or 12 Uganda shillings.

“The pound goes down and it has no guarantee that tomorrow will be the same as we talk. Sometimes you may have the pound, but no one to buy it” Mr Mansoor said.

Mr Lutugoro who has been in the business for seven years is one of the remaining traders dealing in currencies and he noted that they are, additionally a target for armed thugs coupled with the unsafe environment where people easily sneak in with guns across the border and terrorize the area.

Elegu has a population of over 20,000 people majority being traders but right now local leaders say the population has reduced to nearly half due to collapsing businesses.

“We request the government of South Sudan to provide security so that peace prevails and [we hope the] pound stabilises,” Lutugoro.

Mr John Ocaya a businessman in currency recalls that in 2013 1 pound equalled to 750 Uganda shillings and it was very good for business unlike now.

“In 2013 if you had 100,000 South Sudanese pounds you would get 75,000,000 Uganda shillings and that was very good business, but now 100,000 pounds changes to only 1,750,000 shilling because the dollar rate is up and stable in Juba, and 1pound is equal to 17.5 Uganda shilling only. So many people lost a lot of their money in trading pounds,” Mr Ocaya said.

Ms Farida Nalu a restaurant owner complains of business being low because of power outages that most affect the preservation of foodstuffs. She also fears that during the rainy season, floods may sweep her business since last year she was affected too. Her restaurant is housed in a temporary structure.

Leaders also blame the war that broke out in 2014 in Juba, seasonal floods and fire outbreaks that have devastated businesses over the recent years.

Michael Okema, Elegu town Mayor believed businesses in Elegu have drastically declined due to the war in South Sudan that has sent over 1,500,000 South Sudanese as refugees into camps in Uganda.

“I came here in 2013 as a businessman and the population of Elegu centre where majority were traders was over 20,000 but right now we are about 10,000 people because many left after they lost businesses and property in floods, fires and also the war in South Sudan caused fear,” Mr Okema said

Even if it has not flooded in this year, traders continue to live in great fear that any time during the rainy season the flood could return.

In August 2017 over 3000 people at Elegu market were displaced by floods which destroyed properties worth millions of shillings, and in the same year, over 500 traders lost their goods to fire at the same market. Since this year began fire has ravaged the market twice dragging over 450 traders owning millions of shillings in stock to zero level.

Elegu is a mixture of tribes with people from all parts of Uganda majority being Baganda, followed by Lugbara, Madi, Bagishu and some few Acholi among other tribes.

However, there is a high demand for food and beverages from the Dinka who are the main customers and prostitution is booming. “We get good businesses in South Sudan in food, drinks, and animals. But some of the ladies that sell food and alcohol during the day, turn into prostitutes in the night,” Mr Okema said, adding that is the only reason the town is busy 24/7.

But one of the sex workers, Nantaba (not her real name) disclosed that business is so hard and they do not get customers with much money on a daily basis as they used to get when South Sudan was still a young and peaceful country.
“Life is hard now and only those who have money can pierce the doughnut because everything that our government of Uganda offers is seriously taxed,” she argued.

Government through Ministry of Trade in 2014 secured 100 hectares of land from Amuru Local Government at a tune of 800M shilling for the construction of the market at Elegu but even then the lower Urban Authorities at Elegu town have allowed traders to erect temporal structures for business on the government land awaiting modern structures.

Last year Ministry of Trade announced One million Euros funding from the Common Market of East and Southern Africa (COMESA) and $2million (US dollars) funding from World Bank to construct border markets at  Mpondwe in the western Uganda district of Kasese bordering the Democratic Republic of Congo. The Industry Minister Mrs Amelia Kyambadde announced that Elegu, Katuna, Busia, Lwakhakha, Oraba and Kikagati have been feasibly studied by government for construction.

If nothing is done to address the challenges that affect traders at Elegu, they believe Uganda will lose a lot of revenue that could have come from South Sudanese.

“When peace is fully restored in South Sudan, and refugees are taken back home, this market will boom more than it used to be. So people responsible for providing peace and security should work hard so that trade between the countries grows,” Elegu Mayor Mr Okema suggested.

He says the recent peace agreement signed between President Salvar Kiir and Vice-president Riek Machar will bring stability (peace) since Ugandan traders will not only be confident to trade in Elegu market on the Uganda side but will also cross the border to Nimule and Juba.

To stabilise the foreign exchange rate, Mr Ocaya, a currency dealer at the market urged the Central Bank of South Sudan and Bank of Uganda to dialogue to harmonise currency exchange between the two countries since they depend on each other through import and export trade. He believes the two banks can save businesses by having a favourable forex.

Traders also want the Uganda government to divert the Unyama River channel to control floods and build strong permanent structures to ensure safety and security of their merchandise at the border market.



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