Finance minister touts lower lending rates, unveils ‘stabilisation’ budget

JUBA — South Sudan’s Minister of Finance and Planning, Bak Barnaba Chol, on Tuesday announced a drop in commercial bank lending rates as he presented what he described as a stabilisation-focused national budget aimed at curbing inflation and restoring economic confidence.

Tabling the Fiscal Year 2025/2026 draft budget before the National Legislative Assembly in Juba, Chol said lending rates fell from 16.03 per cent in February 2024 to about 11.03 per cent in February 2025, a move he said signals improving credit conditions for the private sector.

“Commercial bank lending rates declined from 16.03% in February 2024 to 11.03% in February 2025, improving credit conditions for the private sector,” Chol told lawmakers.

The minister said the government expects further economic stabilisation following the resumption of oil exports, with plans to rebuild foreign currency reserves to strengthen exchange rate stability.

“The budget, therefore, constitutes a stabilisation and recovery framework rather than an expansionary fiscal program,” he said.

Chol projected South Sudan’s gross domestic product (GDP) for the 2025/2026 fiscal year at SSP 20.6 trillion — roughly USD 4.5 billion — marking a nominal decline compared to the previous year due to earlier disruptions in oil production.

Despite the drop, he noted that the non-oil sector is forecast to grow by 5.5 per cent, supported by renewed oil activity and increased economic momentum. Oil output is expected to recover to approximately 95,000 barrels per day as operations resume at key facilities.

However, Chol cautioned that inflation remains high at 15 per cent, driven by exchange rate pressures and supply-side constraints, prompting the government to adopt an explicitly anti-inflationary fiscal stance.

Between January and May 2025, the official exchange rate averaged SSP 4,373.88 per U.S. dollar, while the parallel market rate hovered around SSP 5,456.4, reflecting limited foreign reserves and continued deficit financing.

To address these challenges, the government has proposed a fiscal framework prioritising economic stabilisation and essential spending. The draft budget allocates SSP 1.90 trillion for salaries of civil servants and organised forces, SSP 1.17 trillion for infrastructure development, and SSP 842 billion for debt servicing to rebuild financial credibility.

Chol also pledged stronger oversight to improve domestic revenue collection and reduce losses.

“We are taking firm action to stop revenue leakages, end illegal tax exemptions, strengthen enforcement, and fight smuggling, because every pound lost to corruption or inefficiency is a loss to our people,” he said.

The minister said the overall strategy aims to stabilise the economy, ensure timely salary payments, and restore public confidence as the country works toward recovery after years of fiscal strain.