IMF team ends South Sudan assignment with mixed scorecard
The IMF staff wrapped up consultation and review of programme monitoring with board involvement in South Sudan.
The lender noted in its press release issued on Monday that the “consultations focused on medium-term policies to address fragility relating to increasing fiscal space, enhancing transparency, and improving public financial management (PFM).”
In a press release on Monday, the staff leader, Niko Hobdari, said they observed that the “South Sudanese authorities are facing multiple challenges, including protracted flooding, declining humanitarian assistance, the incorporation of newly constituted security forces into the payroll, and the need to finance elections planned for 2024.”
“Efforts to strengthen administrative procedures for public sector salary payments have contributed to salary arrears, while the need to finance elections scheduled for 2024 might put further pressure on expenditures,” Hobdari stated.
According to Hobdari, the conflict in Sudan has created logistical challenges, increased the cost of oil production, and exacerbated an already difficult humanitarian situation in South Sudan, with over 400,000 refugees having arrived in the country as of early December 2023.
“Despite the circumstances, the authorities have supported macroeconomic stability through the implementation of prudent fiscal and monetary policies. Progress on domestic revenue reforms continues, with an adjustment to exchange rates used for customs valuation and improved tax collection contributing to a significant increase in non-oil revenues.”
Hobdari further said that efforts to improve governance and transparency have continued, including the “publication of the budget execution report for FY2022/23 and preparation for the publication of oil revenue and budget execution reports for the first quarter of FY2023/24.”
“The mission also conducted a review of the PMB’s quantitative targets and assessed progress on the structural benchmarks (SBs). Quantitative targets for end-March and end-June 2023 covering fiscal, monetary, and debt were met, while the target on social spending was missed.”
The lender hailed the prudent monetary policy followed by the Bank of South Sudan (BoSS), combined with continued regular auctions of foreign exchange, has shown signs of stabilisation in recent months.
“The mission reached an agreement with the authorities on key policies, which include the clearance of salary arrears, the publication of the first quarter fiscal report for FY2023/24, and completing the audits of the last Rapid Credit Facility (RCF) disbursement and the FY2021 BoSS financial statements. Discussion with the authorities will continue in the coming weeks on policies to allow the completion of the PMB reviews.”
