JUBA May 12 South Sudan's largest bank is
shutting more branches as hyperinflation and a shortage of
dollars eat into the group's profits, the managing director
said, underscoring country's worsening financial woes amid a
Harun Kibogong told Reuters that Kenya-based KCB Group Plc
, East Africa's biggest bank by assets, will temporarily
close five branches, leaving ten operational.
KCB was one of the first foreign banks to move into South
Sudan more than a decade ago, lured by one of sub-Saharan
Africa's lowest banking penetration rates and its petro-dollars.
Its then-chief executive slept in a tent and opened the first
branch in a shop just big enough to fit a partition and a grill.
But a three-year civil war has curbed oil production, sent
the economy into a tail-spin and spurred runaway inflation.
"We are not saying KCB is pulling out from South Sudan,"
Kibogong said in an interview this week. "What we are doing now
downsizing for survival."
KCB lost 2.8 billion South Sudanese pounds in 2016, he said.
He declined to specify the amount in dollars. The South Sudanese
pound traded at 16 to the dollar on the black market on Friday,
compared with 13 in February.
The bank has operated in South Sudan since 2006. Its
branches are older than the country itself, which only became
independent from Sudan in 2011.
Violence forced the bank to shut three branches in January
2014, a month after the war broke out. But now it is a perilous
shortage of dollars and hyperinflation that topped 800 percent
last year that is hampering operations.
Thom Rago Ajak, the governor of the Bank of South Sudan,
said the state bank was trying to tackle the country's economic
"South Sudan's economy is undergoing tremendous challenges
due to internal and external shocks: the current political and
economic development, and low oil prices," Ajak said.
The bank planned to improve information technology, human
resources and develop a credit information system, he said.
Such reforms, however, will not alleviate South Sudan's
fundamental problems: war, the flight of foreign capital and
crippled oil production.
(Editing by Richard Lough)