by bssSouth Sudan seeks more convenient loans accessibility from World Bank and IMF
By Chance Baniko S. OUDU
Central Bank’s Governor Hon. Dr. James Alic has said that the sustainability analysis measure employed by the World Bank and IMF to ascertain whether or not a country qualifies for accessibility of loans is subjective.
The governor said these conditions impede the ability of African countries to borrow more resources from these two financial institutions.
“We find that time and again most countries are either under debt distress or at risk of high debt distress and because of that the access of these countries to resources is restrained. So, we believe this is something we will keep pushing, and one day we shall have our rating, or we shall have more voice at the global financial table because even at the movement in the global setting, there are tables where Africa does not sit on the table”, he stressed.
Alic presented this issue at the plenary meeting of the African Development Bank (AfDB), which took place as from 27th May to 31st 2024 in Nairobi, Kenya.
South Sudan is grappling with financial challenges as it struggles to meet its obligations. A significant portion of the oil that flows through Sudan to international markets for sale has been disrupted due to a pipeline rupture and unrest caused by armed groups operating in the Red Sea region. Furthermore, the Houthis, a Yemeni-based armed militias have issued threats to block ships carrying cargoes in international waters. These disruptions have further strained South Sudan’s economic situation.
The International Monetary Fund (IMF) and the World Bank use debt and sustainability analysis to assess the current debt situation. This analysis considers factors such as maturity structure, fixed or floating rates, indexing, and debt holders. Its purpose is to identify vulnerabilities in the debt structure and policy framework early enough to introduce corrective measures before payment difficulties arise.
The framework includes two complementary components: analyzing the sustainability of total public debt and that of total external debt. Navigating debt challenges is crucial for South Sudan’s economic stability.