South Sudan has secured $52.3 million from the International Monetary Fund (IMF) to address its urgent balance of payments needs. This is the country's first loan since joining IMF in 2012.
The loan has been granted after the Bank of South Sudan implemented IMF's recommendations to record all oil exports and transactions under the Transitional Financial Agreement.
According to South Sudan's IMF report on external sector statistics mission published in January, there was a need for essential economic policy-making by the authorities to meet the data needs of key stakeholders to assess the country's external sector developments.
Announcing the loan approval under the Rapid Credit Facility, the IMF board, in a statement released on Thursday, said that the coronavirus pandemic and oil price shock created a severe economic disruption, leading to a sharp decline in South Sudan's growth and reversing some early gains from political stability.
Before the pandemic, South Sudan had achieved significant progress due to improved political stability and an uptick in global oil prices. Economic growth rebounded, inflation declined, and the exchange rate stabilised.
Now, South Sudan's economy is projected to contract 3.6 per cent in the financial year 2020/2021, about 10 percentage points below the pre-pandemic baseline.
IMF deputy managing director Mitsuhiro Furusawa said the organisation is committed to pursuing macroeconomic stability by implementing fiscal consolidation, limiting the use of monetary financing of the deficit and containing reliance on non-concessional debt.