South Sudan: Will President Kiir risk more Financial Transparency? [Since the IMF and World Bank cancelled all loans to the Republic]

The Ministry of Finance has said the World Bank and International Monetary Fund have cancelled all loans for South Sudan until the financial, and economic management reforms stated in Chapter Four of the September 2018 revitalised peace agreement are fully implemented. The World Bank and the International Monetary Fund (IMF) gave the conditions during the recent visit of the government delegation to Washington, DC, USA. The Minister of Finance and Planning, Agak Achuil Lual, headed the delegation. Agak and his accompanying delegates, who included the Governor of the Central Bank, Moses Makur, took part in the World Bank-IMF meetings that focused on the world economic outlook in relation to Ukraine’s war and the impact on global financial stability” (Atar News – ‘”NO MORE LOANS FOR SOUTH SUDAN”, SAYS WORLD BANK AND IMF’ 07.05.2022).

These days things are going to get hectic for the Revitalized Transitional Government of National Unity (R-TGoNU) and for the signatories of the R-ARCSS. Especially the leaders of the SPLM-IG, the inner-circle around the President. One should suspect that the administration or R-TGoNU needs to quickly reform, but by doing so. The skeletons in the closet will be unleashed. While there are already some who is unleashed on the public.

President Salva Kiir Mayardit should be worried about these revelations. The costs of not getting loans from the International Monetary Funds and the World Bank is stopping fiscal funds to run the government. As well, as the issues with the shady or shoddy loans on futures on the petroleum exports from the South Sudan. This is unleashed on the public, as the IMF/WB is asking for the Chapter 4 of the R-ARCSS to be implemented.

Here is quotes from the UN Experts Report of April 2022:

The Panel also identified efforts by the Office of the President to accrue additional oil-backed debt to finance contracts awarded to favoured businessmen” (UN Experts Report – ‘S/2022/359’ April 2022).

The Panel confirmed that Amuk for Trading and Investment was ultimately controlled by Kur Ajing Ater, a prominent South Sudanese businessman. In a previous report (S/2019/301), the Panel described how another company controlled by Kur Ajing Ater, Lou for Trading and Investment, had been awarded similarly outsized procurement contracts by the South Sudan People’s Defence Forces, including for food “ (…) “87. The Office of the President played a prominent role in the agreement, including the President himself, his National Security Adviser and other senior staff, several of whom had been present at the signing of the deal in Dubai, United Arab Emirates. In confidential meeting minutes from a review of the 2018 contracts with Kur Ajing Ater, a senior South Sudan People’s Defence Forces official complained that “there are irregularities in this contract”, but that “the decision was from higher authorities so we can do nothing about it”” (UN Experts Report – ‘S/2022/359’ April 2022).

Within the chaotic system of the public finances of South Sudan, political and security officials continued to find opportunities to use their power and influence to divert significant public resources for their own benefit” (UN Experts Report – ‘S/2022/359’ April 2022).

General Principals of Chapter IV in R-ARCSS:

“The RTGoNU shall establish a high-level, competent and effective oversight mechanism that shall control revenues collection, budgeting, revenue allocation and expenditure. The oversight mechanism may solicit technical and advisory resources on economic governance from the regional and international community. The mechanism shall be guided by principles of mutual consent in accountability” (R-ARCSS, 2018).

The wealth of South Sudan shall be shared equitably so as to enable each level of government to discharge its reconstruction, development, legal and constitutional obligations, duties and responsibilities” (R-ARCSS, 2018).

Revenue sharing shall reflect a commitment to devolution of powers and resources, and the decentralization of decision-making in regard to development, service delivery and governance” (R-ARCSS, 2018).

When you read these general principles in comparison to the UN Experts Report of April 2022. You see the misgivings and what the R-TGoNU is doing at the moment. How profitable the petroleum and the loan agreements are for certain individuals and the close proximity to the Office of the President. These shady deals are beneficial for the ones in power, but not the Republic itself.

That’s why the President and the Office of the President knows that. If it follows the General Principals and implements the R-ARCSS. That would stifle and make it harder, if not impossible to sign on to such deals. The profits and the revenue from petroleum couldn’t get siphoned or get accessible to a chosen few. As the Financial Management and Oversight of such would unravel these sorts of agreement. Which is the reason why the IMF and World Bank now stops loaning funds to the South Sudan.

Do I think President Kiir will risk more financial transparency and mechanisms? No, not at this very moment he will not. Even if it hurts or cripples his government. Kiir will not empty his pockets or risk the growing wealth surrounding him. R-ARCSS was signed by him, but most likely never thought things would go down like this. He risked certain aspects, because he thought he could get away with that.

Now the greed and the powerful is unmasked. The Petro-Dollars are running wild in the Office of the President. While they know have to decide to continue to follow reforms or guidelines to loans from IMF/WB, which means to reform the financial institutions and mechanisms. Or forgo these while hoping for other means to bail the government out with fiscal funds. As the petroleum is sold with futures and insider trading, which is not benefiting the state or the people of South Sudan either. Peace.

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