IMF releases $174.2 million to South Sudan to plug balance of payments gap

Reuters , Wednesday 31 Mar 2021

In 2018, South Sudan ended five years of civil war that killed an estimated 400,000 people, but President Salva Kiir and Vice President Riek Machar's disagreements kept the peace process from being fully finalised

IMF Headquarters
FILE PHOTO: In this file photo taken on April 15, 2020 a sign is seen outside the headquarters of the International Monetary Fund (IMF) as the IMF and World Bank hold their Spring Meetings virtually due to the outbreak of COVID-19, known as coronavirus, in Washington, DC. AFP

The International Monetary Fund said on Wednesday it had released $174.2 million to South Sudan under its Rapid Credit Facility to address urgent balance of payments needs, after floods and an oil price shock hurt economic performance.

In 2018, South Sudan ended five years of civil war that killed an estimated 400,000 people, but President Salva Kiir and Vice President Riek Machar's disagreements kept the peace process from being fully finalised. They repeatedly pushed back deadlines to form a government of national unity, but in 2020 finally did so.

"The pandemic-related oil price shock and devastating floods have led to an economic downturn. The ... downturn widened the fiscal and the balance of payments deficits, opening large financing gaps in the absence of concessional financing," the IMF said in a statement late on Tuesday.

It expected the economy would contract 4.2% in the 2020/21 (July-June) fiscal year, it added. The forecast is deeper than a 3.6% contraction the fund forecast in November.

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