By Deng Machol
Juba – South Sudan has received a $334 million funding from the International Monetary Fund (IMF) and plans to utilise it for economic reforms, funding the budget and building foreign exchange reserves.
The Bank of South Sudan said the new resources come when South Sudan is implementing essential economic reforms, including monetary and far reaching foreign exchange market reforms, which involve monetary financing of the deficit.
“Utilization of the new resources will address the budget support and the economic impacts of the COVID-19 pandemic, the balance of payment, and reserves building,” said Dier Tong Ngor, Bank Governor in a statement.
“Our current economic stabilization efforts have been supported by the significant recovery of oil prices and the two IMF disbursements under the Rapid Credit Facility in November 2020 and March 2021 for combined financing of US$225 million,” he added.
Ngor said the funding coupled with the improvement of oil revenue will substantially boost the country’s foreign exchange reserves.
“The additional USD 334 million allocations by the IMF and the improving oil revenue will substantially boost the country’s foreign exchange reserves,” said Ngor.
Governor further stressed that “the increase in reserves will help build external resilience and sustain the current reforms in the foreign exchange market.
“Building reserves in turn, is expected to facilitate price stability and investment flows going forward,” said Ngor. It will also improve liquidity and gain enough policy space to battle the pandemic while mounting an inclusive recovery.”
The bank governor said “the allocation will contribute to the sustainability of the current economic and foreign exchange reforms.”
The Governor also reiterated commitment to utilizing these resources prudently and transparently.
“We also remain committed to continuing on the path of economic reforms and that the budget currently, which has been passed by the Cabinet and will be soon sent to Parliament for approval, is based on realistic revenue projections and maintains the commitment of no monetary financing of the deficit” he concluded.
The Bank of South Sudan and the Ministry of Finance & Planning will ensure adequate checks and balances and will provide special accounting and reporting on the utilization of the proceeds will be undertaken.
Despite the oil – rich nation, South Sudan is still have a fragile economic crisis since independence.