Juba, Mar 3 (IANS): The IMF has approved $114.8 million in emergency financing to support South Sudan, a government official confirmed.

South Sudanese Minister of Finance and Planning, Dier Tong Ngor said on Thursday that the disbursement will help the country address food insecurity while maintaining social and growth-enhancing spending, Xinhua news agency reported.

Tong told journalists in Juba, South Sudan's capital, that his Ministry acknowledged that factors such as years of heavy floods and Covid-19 have enormously impacted economic activity in the country, real GDP has severely contracted, inflation and exchange rate of the South Sudanese pound against other currencies have deteriorated, and the fiscal deficit has increased.

He noted that the new financing will enhance the foreign reserves position for the central bank to intervene in the market to meet any gaps in the foreign exchange market, stabilise the local currency, and reduce prices of basic commodities in the market. And South Sudan will remain closely engaged with the IMF, and their discussions will continue with the IMF under the Staff-Monitored Program, which aims to provide a strong anchor for macroeconomic policies, further catalysing donor support, the Minister said.

According to the IMF, a combination of flooding and the rising price of staples have exposed 8.3 million of the country's people to acute food insecurity. The disbursement is expected to provide South Sudan with fiscal space to address food insecurity while maintaining social and growth-enhancing spending as well as boosting reserves, the IMF said in a statement on Wednesday.