(Bloomberg) -- South Sudan is seeking $250 million of financing from the International Monetary Fund to help the nation address balance of payment challenges and boost growth. 

The oil-producing nation has already received three rapid credit facilities since 2020, which then ushered a so-called program monitoring with board involvement last year, according to Bank of South Sudan Governor James Alic Garang. 

South Sudan depends on oil for most of its revenue and urgently requires alternative sources after a pipeline that carries two-thirds of its crude was damaged in February. Repairs to the conduit have been delayed as it passes through territory engulfed in fighting between the army and the paramilitary Rapid Support Forces in neighboring Sudan. A blockade on the Red Sea has also slowed down the flow of oil, he said.

The funding will address issues such as economic growth, inflation, distribution of resources in the country, education, and health, Garang said.

The first two reviews for that policy support were completed this month and the third will be held in November, after which the government will seek 100% of its quota, equivalent to about $250 million, he said on the sidelines of the African Development Bank’s annual meetings in the Kenyan capital.

Some of the program requirements include an audit of the central bank’s financial statements for 2021, which BoSS has delivered, said Garang, who was appointed to the role in October.

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“There are areas where we still have to work harder,” he said. “With the IMF there is no free lunch. We’re working hard, very hard to deliver some of those policy requirements.”

Since January, the government has made efforts to collect more non-oil revenue, but that’s not enough, he said.

About 90% of South Sudan’s budget depends on oil, the governor said. “So the impact is in reduction of volume that goes to international market, and the amount of hard currency that comes into the country, which we can then use to meet obligations.”

Depleted Reserves

Production from Dar Petroleum Operating Co. — 41% owned by China National Petroleum Corp. and 40% by Malaysia’s Petroliam Nasional Bhd, plummeted in March, government data shows. Output was 761,000 barrels, compared with 3.13 million barrels in February.

Read More: Burst Oil Pipeline Risks South Sudan Violence, Economic Meltdown

Consequently, foreign exchange reserves are eroded and can only cover about two months of imports, compared with a 3.5 months IMF threshold.

Separately, South Sudan officials are in discussions with Qatar for an “amicable” resolution following a $1 billion court award to the Qatar National Bank over a defaulted loan. South Sudan is looking to pay only “part of it, but we’ll still need to pay,” Garang said.

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