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Republic of South Sudan - Joint World Bank-IMF Debt Sustainability Analysis (English)

The new baseline in this Debt Sustainability Analysis (DSA) reflects notable developments since the last assessment in May 2019: a debt restructuring agreement with Qatar National Bank; the authorities’ commitment to implement prudent fiscal and monetary policies, and stop engaging in oil advances and highly non-concessional debt going forward; higher oil production; and the adverse impact of the Coronavirus (COVID-19) crisis. The pandemic predominantly affects South Sudan’s economy through the collapse in oil prices which, in turn, gives rise to a large current account deficit and less favorable fiscal position, leading to larger financing needs. South Sudan’s debt is assessed to be sustainable on a forward-looking basis with a high risk of debt distress for both external and overall public debt. Specifically, factoring in the adverse impact of the Coronavirus (COVID-19) pandemic and fundamental changes discussed above, there are temporary breaches in two out of seven debt indicators under the baseline scenario (debt service-to-revenues ratio of external public debt and present value (PV) of debt-toGDP ratio of overall public debt). These breaches suggest a high risk of external and overall public debt distress. However, all external and overall public debt indicators are expected to be below the respective thresholds from 2024/25 onwards, contingent on the authorities’ commitment to cap the deficit in 2020-2021 and undertake an ambitious, yet feasible, fiscal adjustment over the medium term. On this forward-looking basis, South Sudan’s external and overall debt are assessed to be sustainable. Given the rapidly evolving nature of the Coronavirus (COVID-19) pandemic, risks are heavily tilted to the downside. They include subdued oil prices, deadlock in implementing sustainable peace, and lack of political commitment to implement strong macroeconomic adjustment measures.

Details

  • Document Date

    2020/11/01

  • Document Type

    Board Report

  • Report Number

    155231

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2020/12/18

  • Disclosure Status

    Disclosed

  • Doc Name

    Republic of South Sudan - Joint World Bank-IMF Debt Sustainability Analysis

  • Keywords

    debt service; real gdp; commodity price; oil price; public debt; contingent liability; contingent liabilities; debt-creating flow; domestic debt; million barrels of oil; nominal interest rate; oil production; grace period; primary balance; baseline scenario; alternative scenarios; real interest rate; total public debt; Public and Publicly Guaranteed; primary deficit; natural disaster; nominal depreciation; export ratio; risk of debt; availability of debt data; composition of public spending; real exchange rate depreciation; debt restructuring agreement; current account deficit; total external debt; financing need; dollar term; exchange rate change; lower oil price; external public debt; debt-service; public sector debt; projection period; fiscal adjustment; public sector borrowing; personal protective equipment; net present value; change in arrears; payment of wage; Foreign Exchange Reserve; external debt service; domestic public debt; open access; Effective interest rate; marginal interest rate; domestic financial market; import of goods; export of goods; rent seeking behavior; commodity price shock; domestic debt instrument; macroeconomic and fiscal; central government debt; availability of data; quality of public; social security fund; private sector debt; extra budgetary fund; exchange rate projections; term of data; monetary policy; external financing; peace agreement; debt relief; short-term debt

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Citation

Republic of South Sudan - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/364251608338089749/Republic-of-South-Sudan-Joint-World-Bank-IMF-Debt-Sustainability-Analysis