The last year highlighted its vulnerability to external shocks such as the worldwide COVID-19 pandemic, changes in oil prices, severe flooding, and desert locusts. Investment remains too low to support the sustained economic growth needed to cut the dire food insecurity and, in time, poverty. The country remains overly dependent on oil. South Sudan’s economic potential will only be realised once there is widespread economic reform and full implementation of the Revitalised Agreement on the Resolution of the Conflict in the Republic of South Sudan (R-ARCSS).
The Troika thus welcomes the Staff Monitored Programme (SMP) that the Government has agreed with the International Monetary Fund (IMF). Implemented properly, the SMP should help the Government build credibility with the international community on economic management.
The Troika will follow the extent to which the Government of South Sudan delivers on agreed IMF targets, and also the spirit by which it does so. Reform will only succeed if there is sufficient political will to take the tough decisions required to change existing shortcomings.
The SMP’s three areas of focus – macro-economic stability, foreign exchange reform, and Public Financial Management (PFM) reform and institution building – are critical starting points. They will also assist with the implementation of the economic and financial provisions of R-ARCSS.
Central to building credibility is the need for Government to ensure greater transparency to its people over how their resources are used, and for those in power to be held accountable for misuse. The Troika believes Government needs to deliver on both transparency and accountability. The role of independent auditing, open and transparent budgeting practices, and public discussion in the revitalised National Assembly is key, as is acting on identified weaknesses.
The Troika thus looks forward to seeing the audit of the first tranche of the RCF loan by the end of June and audits of the RCF account on a quarterly basis going forward. We also look forward to seeing monthly publication of pandemic-related spending and quarterly publication of all government spending and relevant oil data.
While some economic reforms can be delivered relatively quickly, reform must ultimately go beyond the three SMP areas. This is a multi-year endeavour. The Troika is ready to stay the course with Government, but this support is not unconditional. Government’s political will to reform, manifested in much greater transparency and accountability and implementation of R-ARCSS, is absolutely necessary for success.
Troika Statement on Economic Reforms & the IMF SMP.docx