Page 21 - Nile Explorer Issue 12

Finance & Economics

IMF Approves

US$52.3 Million

to South Sudan

to Address

the COVID-19

Pandemic Ms Kristalina Georgieva as the new IMF Managing Director

created urgent balance of payments and worsened living conditions for millions
fter years of South Sudan pleading of South Sudanese. This means the
Awith the global lender despite fiscal financing needs. financial support from the IMF will
joining in 2012, the International “The authorities’ efforts to address the provide the much needed breather, by
Monetary Fund finally released $52.3 human and economic effects of the reducing the economic and social cost
million disbursement in November. pandemic are appropriate and have of adjusting the economy toward a
helped limit its spread. Additional
This is the first time a still fragile country financing from the international sustainable path.
like South Sudan has received financial As it were, South Sudan has also been
support from the IMF to address the community remains critical to close hit hard by the sharp decline in oil
the external financing gap and ease the
urgent balance of payments needs prices during the pandemic, yet the
that has been impacted by Covid-19 adjustment burden,” said Mr Furusawa. proceeds from oil exports account for
pandemic and the drop in global oil He said that the board was convinced 97 percent of exports and a large share
prices. that the authorities are committed to of budget revenue. The exchange rate
pursuing macroeconomic stability by
The emergency funds disbursement is depreciating, contributing to higher
under the Rapid Credit Facility (RCF) implementing fiscal consolidation, inflation.
limiting the use of monetary financing
to help its economy weather the shock of Then the pandemic and oil price shock
the COVID-19 pandemic. of the deficit and containing reliance on created severe economic disruption,
non-concessional debt. They intend to
According to IMF Executive Board, the safeguard poverty-reducing and growth- leading to deterioration in the fiscal and
disbursement will help finance South enhancing spending. external balances, and a sharp decline in
Sudan’s urgent balance of payments growth, reversing some early gains from
needs, contain the fiscal impact of the The Governor of the Bank of South political stability. South Sudan economy
Sudan, Dier Tong Ngor, told the media
shock and will provide critical fiscal is projected to contract 3.6 percent
space to maintain poverty-reducing and soon after that IMF’s first financial in 2020/2021, which constitutes a 10
assistance to South Sudan will help the
growth-enhancing spending. percentage drop prior to the pandemic.
country stabilise the currency after its
The South Sudan authorities have rapid depreciation. While donor support in the past was
committed itself to public financial largely focused on humanitarian
management reforms, transparency and “This facility is given to South Sudan to operations, South Sudan requires large
address a gap, and will be used to address
accountability to ensure that the RCF investments in infrastructure, human
resources are used appropriately and for the current challenges we are facing in development, and stronger institutions.
the market. Once the money hits our
their intended purpose. The RCF provides emergency financing
account, we will embark on intervene in
In a statement following the release the market,” he said. to deal with the most acute challenges
of the fund, IMF Deputy Managing of the crisis. At the same time, the
Director, Mitsuhiro Furusawa, said that South Sudan is emerging from a IMF is providing technical assistance
prolonged civil conflict that has lasted
the Covid-19 pandemic has severely to help with modernising South Sudan
affected South Sudan and reversed early seven years with a very high human institutions necessary for public financial
cost—about 400,000 dead and over
gains from political stability. The health management,
and economic impact of the pandemic, 2million displaced in and outside the The focus will be on budget planning,
country.
coupled with the decline in oil prices, cash management, and the establishment
led to a collapse of revenues and have Recently, floods and locusts have further of a treasury single account.

The Nile Explorer 012 | 21