The IMF: a Shylock of the Last Resort

Following the just published economic report of South Sudan by The International Monetary Fund this January, from which its GDP was reported to be $8 Billion, Current A/c Bal. at $0.01 and outstanding debts totaling $159 Million for all 15 Million South Sudanese population in 2023. It is an improved version of the previous report that can clearly signal that future is bright.


It seams South Sudanese government is working towards recommendations that were tailored by the World Bank in 2022 while the IMF stands at the doorstep to debt finance economic recovery pathways and resilience in the country.


However, The-To-Do-List that was present to the government of South Sudan in order to restore economic resilience recommended:

  • Macroeconomic reforms i.e. Institutionalization of Public Institutions, stick to stabilization paths, restore FX Rate and taming Inflation.
  • Address drivers of fragility, conflicts & ensuring peace is a prerequisite of an inclusive economic recovery
  • Improve Oil Sector governance by ensuring all revenues and expenses are on budget and used effectively to achieve national development goals.
  • Support resilience of Agriculture to reverse the food crisis and achieve food security for all households.


Lately, the government of South Sudan has embarked on above initiatives aimed at macroeconomic stabilization—Renovation of Public Financial Management architecture with a limited financial muscles.


Paradoxically, to kick out hunger and food insecurity, Inflation and widespread corruption in public institutions resulting from Zero-Accountability, South Sudan will need to increase its Resource Envelop in subsequent fiscal years by borrowing more funds from external lending agencies, and most especially from The IMF (International Monetary Fund) as its current debt portfolios stand at $159 Millions.



  • South Sudan’s Public Debt as a Proportion of GDP


The republic of South Sudan became a member-state of IMF bloc on 18th/April/2012 and it the [IMF] has been playing the role of “Lender of Last Resort” should South Sudan experience financial difficulties. IMF is always ready for intervention. 


Like other credit agencies such as banks, SACCOs or Informal-Sector-Shylocks anywhere, IMF bormally remits funds into the Bank of South Sudan’ Coffers after Terms and Conditions have been agreed.


Surprisingly, IMF Interest Rates for African countries are either crazy or discriminative in nature. It is one of the reasons why many countries are going bankrupt resulting from inability to service debts or it is maybe the debt-distress they are finding themselves in. 


Early this month, Ghana in West Africa was declared Bankrupt by media houses and that it had gone into recession.


In my own analysis of the Current A/c standing at $0.01 with an outstanding external debt stocks amounting $159 Million, crossing the Red Sea with unforeseen uncertainties of the future through December along with a burden of World Bank recommendations on South Sudan’s shoulder.


I foresee South Sudan going back to the IMF to apply for more loans which may only convert the outstanding external debt ($159 Million/29.7% of GDP), as a Compounded Debt from the Principal next year as it [South Sudan] pushes for more institutional reforms.


QUESTION


🗣Will things only improve in South Sudan in the short runs?

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