Ateker TV 
South Sudan is experiencing increased pressure from the International Monetary Fund (IMF) to reveal its oil production agreements. This transparency is crucial for building credibility with donors and securing concessional financing.
However, Juba has expressed concerns, stating that such a disclosure would violate existing contractual agreements with oil extraction companies.
In its June 2024 country report on South Sudan (IMF Country Report No. 24/160), the IMF emphasized the importance of implementing key reforms.
The report highlighted the need for South Sudanese authorities to enhance the transparency of oil revenue and related expenditures.
This step is essential for building trust with international financiers and unlocking much-needed foreign funding.
“Continued implementation of reforms in these areas will help build credibility with donors and may unlock concessional financing,” the IMF says.
Other necessary reforms include increasing reserves, broadening the range of monetary tools, enhancing debt management and oversight, addressing salary arrears, boosting domestic revenue generation, and reinforcing measures against corruption, money laundering, and terrorism financing (AML/CFT).
In February 2023, the IMF approved a nine-month Programme Monitoring with Board Involvement (PMB) for the country, outlining several targets. Among these was a mandate for South Sudanese authorities to disclose all signed oil production sharing agreements with oil extraction companies and to publish quarterly reports on the oil sector by June 2023.
However, the report noted that this requirement was not fulfilled due to opposition from the oil companies, who argued that such disclosures would violate contractual obligations.
“The publication of oil production sharing agreements is opposed by oil companies as a breach of contractual obligations. However, the details of the oil sharing agreements are available in the oil reports published in the Ministry of Petroleum,” the report says.
The PMB program aims to assist the authorities in their reform efforts to maintain macroeconomic stability, ensure debt sustainability, and enhance governance and transparency. These objectives are part of building a track record for an upper credit tranche financial arrangement.
The program has already been extended twice, each time by three months. Now, the South Sudanese authorities have requested an additional six-month extension, until November 15, to complete the remaining structural reforms and realign macroeconomic policies.
“Considering the drastic decline in fiscal revenue from the damage to the oil pipeline, the authorities are urged to prioritise spending on salaries and social assistance while avoiding additional recourse to monetary financing or non-concessional borrowing,” the IMF says.
Since the collapse of oil exports in February 2024, Juba has experienced a significant reduction in foreign exchange flows. This has exerted pressure on the foreign exchange market, leading to a decline in reserves.
Consequently, import coverage remains critically low at just 0.9 months, rendering South Sudan extremely susceptible to external economic shocks.
In May 2019, South Sudan entered into an oil production agreement with the South African government. This agreement grants the State-owned Strategic Fuel Fund (SFF) of South Africa the right to explore oil in Block B2, located within the extensive Muglad basin oilfields that span both Sudan and South Sudan.
SOURCE: NEWS AGENCIES
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