NAIROBI - The International Monetary Fund said it had approved a $52.3 million rapid credit facility to South Sudan to help it limit the economic damage of the COVID-19 pandemic.
The fund said it was its first such disbursement for South Sudan since 2012.
In 2018, South Sudan ended five years of civil war that killed an estimated 400,000 people, caused a famine and created a massive refugee crisis, but President Salva Kiir and Vice President Riek Machar's disagreements have kept the peace process from being fully concluded.
The IMF said South Sudan's growth prospects had been favourable before COVID-19 struck, helped by a peace deal signed in September, 2018.
"The pandemic and oil price shock created severe economic disruption, leading to a sharp decline in South Sudan's growth and reversing some early gains from political stability," the IMF said in a statement late on Monday.
It said the pandemic had led it to cut its economic growth forecast by 10 percentage points to -3.6% for the 2020/21 (July-June) fiscal year.
"The disbursement will help finance South Sudan’s urgent balance of payments needs, contain the fiscal impact of the shock..." IMF said.
South Sudan's economy is still buckling from the damage caused by years of civil war between government forces under Kiir and those allied with Machar.
The fighting hit oil production, which is now also being affected by low prices for crude.
(Reporting by George Obulutsa; Editing by Ed Osmond) ((george.obulutsa@thomsonreuters.com; Tel: +254 20 499 1234; Reuters Messaging: george.obulutsa.thomsonreuters.com@reuters.net))
