IMF: South Sudan is in a deep economic crisis!
The International Monetary Fund has today released their press release on the economic and financial crisis, which is there. The IMF is really stating the facts, the dire needs of the state and the need for reform. Transitional Government of National Unity (TGoNU) really has a lot of work to fix this. South Sudan needs peace to fix this and not more civil war. However, what the IMF is stating is really vital to fix the economy.
The Republic of South Sudan needs some serious revamp of the economy when the IMF state it like this. Clearly, the government has more than enough on its plate, but they surely has to focus to get this in order. That shows the pressure on the state to get it fixed.
Take a look!
“South Sudan is in a deep economic crisis. Economic conditions have deteriorated rapidly since the beginning of the civil conflict in late 2013. Real GDP is estimated to have declined by 2.4 percent in 2017/18 adding to a cumulated decline of about 24 percent in the last three years. Overall, real disposable income (adjusted for terms of trade) is estimated to have declined by about 70 percent since independence in 2011, contributing to an increase in poverty headcount ratio from 50 percent in 2012 to about 82 percent in 2016” (…) “Fiscal policy has been weakened by the loss of fiscal discipline, deteriorating public financial management, and contracting of non-transparent oil advances, which have increased corruption vulnerabilities” (…) “The banking sector is yet to recover from the adverse effects of the civil conflict, high inflation and strong currency depreciation. Consequently, many domestic banks are heavily undercapitalized and face rising non-performing loans” (International Monetary Fund – ‘IMF Country Report No. 19/153 REPUBLIC OF SOUTH SUDAN 2019 ARTICLE IV CONSULTATION—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR THE REPUBLIC OF SOUTH SUDAN’ 04.06.2019).
We are seeing now what is at stake for the government in Juba to fix and ensure that they get to stabilize the economy, as well as finalizing the peace-agreements. So, that the public get enough peace to get the banking sector working, the financial markets running and possibly stop the economic crisis. Which has only been made worse by high inflation, strong currency depreciation and grand corruption. All of this has to get in order and get corporate governance, and financial statutes to safeguard the economy.
This will not happen over night, but the IMF is really warning in their press release and in their staff report. I just showed the gist of it. But it wasn’t positive.
To end with a few final statements from the Executive Board Assessment: “Directors observed, however, that the country is facing a deep economic and humanitarian crisis, and underscored the importance of decisively implementing key reforms to restore macroeconomic stability, strengthen economic buffers, improve governance, and rebuild credibility with the international community” (IMF, 04.06.2019). Peace.