The Troika welcomes IMF engagement, and its visit to Juba last week. This engagement with the Government is critical for building the trust needed by all parties to continue and deepen the economic reforms over time.
We are pleased that in their discussions with the IMF, the Government agreed that it needs to be transparent and accountable for how it uses public resources so that they benefit the people of South Sudan. The Government knows the IMF can only support governments that deliver economic reform and that the IMF can only continue lending if the Government can prove it is using the assistance to pursue agreed reforms. This means going beyond simply being accountable to the IMF for the use of resources lent by the Fund. The Government needs to demonstrate clearly – to its own people – how much it contributes from its own resources and how those resources are being used to benefit the South Sudanese people. We welcome the Government’s assurances that it will provide far greater transparency over revenues (including oil), spending, and on levels of debt and public procurement.
The Government has shown itself capable of reform and we welcome the reforms to date. Successful exchange rate reforms mean that cereal prices have fallen by 6 % in South Sudan this year, while they have risen by 18 % in the rest of the world. The cancellation of the US$650 million loan guarantee has saved each South Sudanese woman, man and child about US$50 in debt they would otherwise have had to contribute taxes to pay off.
These reforms are only the start and much more will be needed. Food prices still remain higher than the vast majority of South Sudanese can afford. Even the priority public financial management reforms are basic first steps. A large share of spending still goes to the organised forces. Government procurement systems are weak and far too many contracts are issued without competition. Corruption continues to divert resources that should have benefitted the people. No annual accounts have been audited and debated by Parliament since Independence. Changes to these practices will allow more public resources to be channeled into more and better education, health and other critical public services.
The Troika welcomes assurances from the new Minister of Finance, Mr. Agak Achuil Lual, that he will champion these crucial reforms.