KIIR-Stops USD 650M individual loans
By Bida Elly David
President Salva Kiir Mayardit last Friday saved the country after canceling a USD 650 million loan which had been directed to individual companies for business projects’
Economic analysts and members of the civil society have appreciated the initiative taken by the president for having canceled the loan rendered to some individual companies in the Country. After reports that the Bretton Hood wood brothers, the International Monetary Fund (IMF) and the World Bank raised an alarm over the loan.
The two institution used to loan money to South Sudan under Staff Monitoring Program (SMP) through national authorities as the result to showcase transparency and accountability to the public.
“I write to you on the directive of His Excellency the President, Salva Kiir Mayardit, authorizing you to cancel with immediate effect the sovereign guarantee of 650 Million Dollars and which has recently threatened to roll back gains we have made with our population and development partners.Notable here are the work of the public Financial Management (PFM) oversight committee, the trust and policy credibility we had built over the past three years, and the deepening of the relationship with our key partners, including the (IMF). With this issue resolved and behind us, you should be on your way to completing the staff- monitored program Review and moving to the next level of engagement with the (IMF), World Bank, African Development Bank and other donors
“Broadly, you should move ahead to announce this formal revocation while communicating this message to our partners. I understand the Bank of South Sudan has a key role here since it signed the letter and should be involved in every step on the way, including by managing any potential repercussions’’. Statement reads
In numerous occasions the country has been supported by the institutions to cover most of its balance of payments deficits they have been experiencing through the monetary grants given by these financial institutions.
During an interview with Deng Makur, the Dean in the Faculty of Economics University of Juba, said, the Country would have encountered alarming economic harm and continuous multiplication of corruption cases, indirect inflation if the loan granted was not canceled by the president.
If the loan was given to individuals, then the country would have experienced a comprehensive economic harm since they would have used it for individual interests and exclude the public from benefiting. He said.
Furthermore, he added that since president ordered for the cancellation of the loan, the money USD 650 million meant for individual loans should be used to facilitate public, economic and social services that would support public interests.
He also urged the government to take critical measures to sanction and punish individuals involved in cases regarding financial mismanagement and public resources.
However,the Executive Director for Civil Empowerment for Progress Organization Edmund Yakani, the approved loan canceled by the president would have affected public services such as civil remuneration, developmental programs such as transportation and communication, social services including construction of schools, roads and hospitals significant to the citizens.
“The canceled loan would have affected social services such as construction of roads, schools, hospitals, bridges, developmental services transportation and communication if given to the meant business men’’. He said
Furthermore, he reiterated that the government made a crucial step by canceling it before jeopardizing the economic position which would have violated the concept of demand and supply.
However, he said the reason as to why the country had been experiencing continuous balance of payment and economic downfall was because accountability and transparency had never been taken as a concerned matter against other leaders and the finance department.
According to Deputy Managing Director of the Executive Board of international Monetary fund (IMF) Mitsuhiro Furusawa in the letter, the loan and the credit facility provided to South Sudan is to restore its recessing economy through path of recovery policy as well as maintain imperative balance of payments needs.
“The World Bank and the International Monetary Fund(IMF) have resolved to help the government of South Sudan put back its economy on the part of recovery as well as combat balance of payments issues facing them’’.
Furthermore, he added that government of South Sudan should pause paying lump sum amount of money to individuals who have not contributed to the good of the citizens in the country.
‘’South Sudan government should prohibit paying business people huge money who have not even provided any services to their people even provided while at the same time begging for money from international financial institutions to pay its obligations’’. He reiterated.