IMF, South Sudan complete Staff-Monitored Program

IMF, South Sudan complete Staff-Monitored Program
President Salva Kiir and accompanying government officials with IMF delegation at State House in Juba (photo credit: Office of the President)

The International Monetary Fund (IMF) has approved the first review of the Staff-Monitored Program (SMP) with South Sudan, giving a verdict on the impacts of economic reforms. 

The IMF commended South Sudan for implementing the economic reforms, which it says have translated into various achievements ranging from reducing the rate of inflation, stabilising the exchange rates, and above all playing a significant role in realizing proper Public Finance Management.

‘‘The SMP, which was approved on March 30, 2021, supports the authorities’ program of reforms that are aimed at strengthening governance and helping create the conditions for strong and inclusive growth by restoring fiscal discipline, implementing a rules-based monetary policy framework, and eliminating distortions in the foreign exchange market,’’ the IMF stated in the press release issued yesterday.

The lender predicted that the country will grow by 1 per cent for the Financial Year 2021-2022, and that there have been positive steps made in the inoculation pending a few grey areas to meet the needed threshold put by the World Health Organisation (WHO).

The lender stated:  ‘‘A national vaccination campaign has made some progress distributing COVID-19 vaccines, supported by the World Bank and COVAX. However, so far only a small share of the population has been vaccinated.

‘‘As such, increasing the share of the population vaccinated is critical to mitigating risks of new pandemic variants and waves that could have devastating implications for lives and livelihoods’’.

However, the IMF said South Sudan is just coming from the cyclic bouts of civil war, and therefore, it will take time to achieve all the required goals to shake up the economy. For instance, it stated that the PFM needed to improve especially in reference to the management of the oil revenue as well as the institution of other fraud-proof mechanisms.

 ‘‘…it is a promising first step that PFM reforms have been initiated, including those aimed at improving cash management, strengthening spending controls, starting the implementation of the Treasury Single Account, discontinuing the use of nontransparent oil advances for budget financing, starting the publication of budget implementation updates, and initiating reforms to strengthen the Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) framework,’’ it stated.

It said that there was an agreement on the way forward on how to handle debt, through limited borrowing and a structured approach to debt management.

‘‘Going forward, the authorities and IMF staff agreed to establish a robust debt management framework and tackle a legacy of non-concessional external debt.

‘‘In addition, the authorities expressed commitment that no new debts should be incurred without the approval of the newly established Loan Committee, the Cabinet of Ministers, and the National Assembly, and no new oil advances would be contracted,’’ the lender revealed.