JUBA, October 16, 2023 — A new, first of its kind project in South Sudan will support the institutional strengthening of the country’s central bank, the Bank of South Sudan (BoSS). The Strengthening South Sudan's Financial Sector Project, financed by an $18 million International Development Association* (IDA) grant, aims to enhance BoSS's institutional capacity, recognizing the importance of a strong central bank in addressing financial sector challenges, transforming the banking sector, and promoting private sector-led growth.
Implemented by the BoSS over a five-year period, the project is crucial given the weaknesses and vulnerabilities in South Sudan's banking sector, which require a strong and a capable regulator that can fulfil its supervisory and enforcement mandates and support a well-functioning financial sector.
“Through its comprehensive approach, this project aims to bolster the central bank by enhancing its institutional delivery capacity, strengthening its technical and operational capabilities, and fostering a culture of accountability. By addressing the emerging weaknesses in the financial sector, these concerted efforts will fortify and stabilize the sector, charting a strategic course for its future and ushering in the necessary reforms,” said Ousmane Dione, World Bank Country Director for Eritrea, Ethiopia, South Sudan, and Sudan.
This project aligns with the World Bank's Country Engagement Note (CEN) for South Sudan (FY2021-2023), which highlights the vulnerabilities in the financial sector and the institutional capacity constraints that BoSS faces. It also aligns with the priorities of the Government of South Sudan, as articulated in Chapter IV of the Revitalized Agreement on the Resolution of the Conflict in the Republic of South Sudan (R-ARCSS) and the Revised National Development Strategy (R-NDS) 2021–2024. The project complements and leverages the existing interventions and efforts of other development partners active in the financial sector to achieve results.
“BoSS leadership recognizes the catalytic role the financial sector plays in spurring private sector growth and hence its critical responsibility to address and manage financial stability risks. The project will enhance BoSS’s capacity to perform this important role through strengthened enforcement and supervisory functions,” said Dr. James Alic Garang, Governor of the Bank of South Sudan.
Financial systems must also function with integrity to ensure economic development. For this reason, the project will also support the institutional strengthening of the Financial Intelligence Unit (FIU), whose role is critical for combating crimes of money laundering and financing terrorism and therefore key to maintaining the integrity of the financial system. Operationalizing a fully functional and independent FIU is one of the commitments the Government of South Sudan has made to strengthen its Anti-money Laundering and Combating the Financing of Terrorism (AML/CFT) regime in compliance with international standards.
*The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 74 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries. Annual commitments have averaged about $29 billion over the last three years (FY19-FY21), with about 70 percent going to Africa. Learn more online: IDA.worldbank.org. #IDAworks