South Sudan urged to implement economic reforms to get IMF, World Bank loans

South Sudan urged to reform its financial institutions to access more loans from the IMF and World Bank. PHOTO | FILE

By DAVID MAYEN

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Juba,

The International Monetary Fund and the World Bank says South Sudan can only

access more loans after reforming its institutions, South Sudan official has said.

Addressing journalists at the weekend, Agak Achuil, South Sudan Finance and Economic Planning minister, said this condition for loans was made known during his visit to Washington DC last week. 

“Our mission to Washington, DC, was successful. We clearly presented the case for continued support for South Sudan. Both the International Monetary Fund (IMF) and the World Bank have committed to continue supporting the people and government of South Sudan.

“They gave us very good advice: do your reform, be transparent, have good governance, accountability, and rule of law, and get support,” Achuil said.

Budgetary support

In March 2021, the IMF gave the South Sudan government an economic stabilisation loan of $174.2 million to boost the economy.

After receiving the loan, the Central Bank in April last year announced weekly auctioning of an additional $3 million to private banks and forex in an attempt to stabilise the economy.

In August the same year, the IMF granted South Sudan a $334 million loan to improve its ailing economy. 

Since December 2020, the Bank of South Sudan said it has auctioned over $30 million to the market but the move seems to have not improved the ailing economy.

Last week, South Sudan’s Central Bank governor Moses Makur accused some powerful individuals of working against the government’s economic reforms.

“Some powerful people didn’t want to have a one-dollar rate for everybody. Some people need to have a black market rate and an official rate; they come and get dollars in the official rate and they go and sell it in black market and they get their difference.

“This group is likely not to be happy with the current reforms because they used to benefit outside in the old system,” he said.

Mr Makur, however, did not name the individuals.

Corruption

In November last year, the IMF said support to South Sudan’s ailing economy is pegged on the government’s willingness to open an accountability probe.

The IMF appealed to President Salva Kiir’s administration to account for past loans, prosecute the corrupt, and improve financial discipline and transparency in the use of public resources, especially earnings from oil.

This quest for accountability follows two grants the fund offered to South Sudan. They include $174 million presented and the $334 million given in March and August last year, respectively.

In September last year, President Kiir asked his Finance and Economic Planning Minister, Athian Diing, to cancel a $650 million sovereign guarantee transaction but did not give a reason for his decision. 

A report by the United Nations Human Rights Commission released last year revealed that South Sudan authorities have embezzled $73 million from national coffers since 2018. In the report, UNHRC chair Yasmin Sooka said that in two months in 2021, the leaders transacted funds amounting to $39 million.

A 2020 report by Transparency International ranked the country the second most corrupt, after Syria, while last year, South Sudan was ranked as the most corrupt country in the east African region.

In April this year, the United Kingdom sanctioned Sudanese businessman Al-Cardinal over corruption and involvement in businesses that fuel conflict in South Sudan.