South Sudan: IMF predicts positive growth in FY2023/24 after three years of negative growth

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(Ecofin Agency) - COVID-19, floods, and the war in Ukraine have harmed South Sudan, whose growth dropped from 12.9% to -4.9% between FY 2019/20 and FY 2020/21. The numerous economic reforms implemented by the authorities are gradually reviving the economy.

South Sudan is expected to record positive growth in FY 2023/24 after the negative figures it recorded in the previous three fiscal years. According to an IMF report released last Wednesday, the East African country's growth is expected to reach 4.6% in the current fiscal year (2023/24) and 4.8% in 2024/25. Meanwhile over the three fiscal years, namely 2020/21, 2021/22, and 2022/23, it recorded -4.9%, -2.9%, and -0.4% respectively.

The negative development in the previous three fiscal years was due to overlapping economic shocks, including COVID-19, floods, and the war between Russia and Ukraine. Apart from affecting the economy, these shocks also deteriorated the humanitarian situation to such an extent that about two-thirds of the population is now considered acutely food insecure.

To help address the food situation, the IMF will provide $114.8 million through its food shock window. Part of these funds ($20 million) will be provided to trusted development partners for immediate humanitarian assistance to address food insecurity. The second part of the disbursement will be allocated to the budget.

In addition to this funding, on February 17, South Sudan received the IMF's approval to implement a nine-month economic program. The objective is to monitor the implementation of government policies "aimed at preserving macroeconomic stability, ensuring debt sustainability, and providing a framework for the authorities to deepen and broaden public financial management and governance reforms.” This program could, according to the Bretton Woods institution, lead to "a high-quality program in the IMF-supported upper credit tranche (UCT).

Jean-Marc Gogbeu