{
  "title": "IMF Executive Board Approves US$ 174.2 Million Emergency Assistance for South Sudan to Address the COVID-19 Pandemic",
  "publication": "IMF News, March 31, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/03/31/pr2194-south-sudan-imf-execboard-approves-us-174-2m-emergency-assistance-address-covid19",
  "canonical": "https://www.imf.org/en/news/articles/2021/03/31/pr2194-south-sudan-imf-execboard-approves-us-174-2m-emergency-assistance-address-covid19",
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  "summary": "Disbursement approved: SDR 123 million (50 percent of quota or about US$ 174.2 million) under the Rapid Credit Facility (RCF).",
  "publishDate": "2021-03-31",
  "sections": [
    {
      "heading": "Emergency financing and key figures",
      "content": "- Disbursement approved: SDR 123 million (50 percent of quota or about US$ 174.2 million) under the Rapid Credit Facility (RCF).\n- This is the second IMF financial assistance to South Sudan since it joined the IMF in 2012.\n- The economy is projected to contract by 4.2 percent in FY20/21.\n- A modest economic recovery is projected in FY21/22.\n- The RCF disbursement will help finance urgent balance of payments needs and provide fiscal space to maintain poverty-reducing and growth-enhancing spending."
    },
    {
      "heading": "Economic impact and context",
      "content": "- Drivers of the downturn:\n  - Sharp decline in international oil prices triggered by the pandemic.\n  - Devastating floods that have eroded economic gains of the peace process.\n- Consequences:\n  - Widened fiscal and balance of payments deficits and large financing gaps in the absence of concessional financing.\n  - In the past, monetization of the fiscal deficit resulted in high inflation and significant exchange rate depreciation.\n- Recent policy moves:\n  - Since October 2020, authorities stopped monetary financing of the deficit.\n  - Forex auctions and the halt to monetary financing have helped stabilize the exchange rate.\n  - Revenue mobilization measures, including phasing out some tax exemptions, have bolstered domestic non-oil revenue in recent months."
    },
    {
      "heading": "Reform programs and conditionality",
      "content": "- A Staff Monitored Program (SMP) will:\n  - Create conditions for strong and inclusive growth by restoring fiscal discipline.\n  - Implement a rules-based monetary policy framework.\n  - Address distortions in the foreign exchange market.\n- Transparency measures for RCF resources:\n  - Regular reports and audits to ensure transparency of the use of RCF resources.\n  - The authorities committed to publishing monthly reports on pandemic-related spending and making public quarterly audits by the Auditor General."
    },
    {
      "heading": "Governance, fiscal, and monetary policy recommendations (from the Board statement)",
      "content": "- Fiscal discipline and debt sustainability:\n  - Restore fiscal discipline as key to macroeconomic stabilization and debt sustainability.\n  - Execute the remainder of the FY20/21 and FY21/22 budgets without arrears accumulation and no recourse to monetary financing.\n  - Pursue revenue mobilization measures and expenditure rationalization to ensure adequate resource allocation for priority expenditure, including vaccinations, salaries, and critical investments.\n  - Remain committed to nonconcessional financing and limit external borrowing to only finance critical infrastructure and COVID-related spending.\n- Monetary and foreign exchange policy:\n  - Discontinuation of deficit monetization is critical to enhancing credibility of the macroeconomic framework.\n  - Foreign exchange reforms should aim to phase out economic distortions, reduce vulnerabilities, and support economic diversification.\n  - Effectively implement the reserve money targeting framework and reduce distortions in the FX market to support monetary and financial stability.\n- Governance and public financial management:\n  - Strengthen governance to ensure efficient use of public funds and build credibility with the public and development partners.\n  - Accelerate public financial management reforms, including:\n    - Implement steps that would strengthen the macro-fiscal framework and the budget process.\n    - Implement the Treasury Single Account.\n    - Improve cash management.\n  - Ensure transparency in the use of RCF resources by publishing monthly pandemic-spending reports and quarterly Auditor General audits."
    },
    {
      "heading": "Board assessment and objectives",
      "content": "- The IMF’s emergency financing under the RCF is intended to:\n  - Help meet priority spending needs.\n  - Catalyze donor support.\n  - Foster critical economic reforms envisaged under the Staff-Monitored Program.\n- Prudent fiscal and monetary policies are emphasized as necessary to promote macroeconomic stability.\n\nPress Release No. 21/94, March 30, 2021\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Republic of South Sudan and the IMF\n- The IMF's Rapid Financing Instrument (RFI)\n- Press Releases\n- PRESS CENTER\n- Rapid Credit Facility\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/03/31/pr2194-south-sudan-imf-execboard-approves-us-174-2m-emergency-assistance-address-covid19"
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    "Published: March 31, 2021",
    "Disbursement approved: SDR 123 million (50 percent of quota or about US$ 174.2 million) under the Rapid Credit Facility (RCF).",
    "This is the second IMF financial assistance to South Sudan since it joined the IMF in 2012.",
    "The economy is projected to contract by 4.2 percent in FY20/21.",
    "A modest economic recovery is projected in FY21/22.",
    "The RCF disbursement will help finance urgent balance of payments needs and provide fiscal space to maintain poverty-reducing and growth-enhancing spending.",
    "Drivers of the downturn:",
    "Consequences:",
    "Recent policy moves:",
    "A Staff Monitored Program (SMP) will:",
    "Transparency measures for RCF resources:",
    "Fiscal discipline and debt sustainability:",
    "Monetary and foreign exchange policy:",
    "Governance and public financial management:",
    "The IMF’s emergency financing under the RCF is intended to:",
    "Prudent fiscal and monetary policies are emphasized as necessary to promote macroeconomic stability.",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Republic of South Sudan and the IMF](http://www.imf.org/external/country/SSD/index.htm)",
    "[The IMF's Rapid Financing Instrument (RFI)](https://www.imf.org/en/about/factsheets/sheets/2023/rapid-financing-instrument-rfi)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Rapid Credit Facility](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/08/Rapid-Credit-Facility)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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