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2016/2017 budget short of $1.1b – IMF

Author : | Published: Friday, June 3, 2016

The International Monetary Fund says South Sudan has a deficit of about $1.1 billion in the budget of this financial year.

It warns that if the deficit is financed through borrowing from the central bank or accumulation of arrears, it would continue to fuel inflation and raise the exchange rate against the pound.

In a statement, the IMF says the government must do its part by raising non-oil revenue and cutting expenditures, particularly in the payroll, current operations, travel, and investment.

Officials from the Ministry of Finance are yet to comment on the matter, but the IMF staffs say they issued the statement after a visit last month to Juba.

They say the Central Bank should regain control over monetary policy and reduce inflation by stopping the lending of money to the government for financing budget deficits. The IMF also says there is a need to strengthen expenditure controls, budget preparation, and to limit accumulation of arrears.

In the statement, they say the government could reduce the fiscal gap to about $300 million if it implements these measures.

The IMF mission says they visited Juba and met with President Salva Kiir, First Vice President Riek Machar, Vice President Wani Igga, Minister of Finance Deng Athorbei, Central Bank Governor Kornelio Mayik.

They say they also met several other ministers and high-level officials, parliamentarians, and representatives of the diplomatic community and of the civil society. According to the statement, the visit was between the 23rd of May and 1 June.

The IMF Executive Board is expected to complete the 2016 Article IV consultation in August 2016.

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