September 25, 2013 (JUBA) – A team from the International Monetary Fund (IMF) have urged South Sudanese authorities to improve transparency in oil operation in order to promote economic stability.
The call came at the end of a two-week visit to the new nation, during which the IMF held talks with officials from the finance and petroleum ministry, central bank, civil society, academia, among others.
The IMF team, in a statement, said their mission agreed with the authorities that, with the gradual resumption of oil production, policies that promote economic stability will remain essential, together with an environment of good relations with Sudan and the pursuit of national unity.
“To this end, key near-term priorities will need to be sound fiscal and foreign exchange policies, improved transparency in government and oil operations, and strengthened public expenditure management,” partly reads the statement.
South Sudan’s economy has suffered a huge economic setback after last year’s oil shutdown over a dispute with neighbouring Sudan. Oil revenues previously supported 98% of South Sudan’s annual budget.
Despite all these, however, the IMF said Sudan’s economic outlook was improving with the rise in its oil production and that inflation was steadily declining.
The world financial institution further agitated for more investments in sector like health, education, and public infrastructure, which its said, could put the country on a path of sustained growth and poverty reduction.
"As public investment is scaled up in the near-term, sound project selection and prudent debt management should also be priorities", it stressed.
WELCOMES DRAFT BUDGET
The IMF team lauded the country’s draft 2013/14 budget submitted to Parliament, saying it strikes the right balance between increasing spending on priority areas and maintaining economic stability.
The 17.3bn South Sudanese Pound (SSP) budget, according to the finance ministry, will mainly be funded using revenues from oil, non-oil resources, loans and donor support.
"The mission also welcomes the authorities’ plans to lift fiscal austerity gradually as the oil revenue stream becomes more certain and to move forward with other key reform including the enactment of the Petroleum Revenue Management Act," the IMF further said.
Meanwhile the IMF announced a plan, under its rapid credit facility, to extend financial support to South Sudan government. Discussions on the loan, to be monitored by the institution’s staff, are reportedly in advanced stages and could be concluded soon.
"The successful implementation of this program would set the basis for economic stability and help attract support from multilateral and bilateral partners as well as private investors", IMF noted in its statement.