South Sudan seeks R4 billion loan

Banknotes displayed on a roadside currency exchange stall along a street in Juba, South Sudan. The country is seeking loans as its dollar reserve dwindles.
Banknotes displayed on a roadside currency exchange stall along a street in Juba, South Sudan. The country is seeking loans as its dollar reserve dwindles.
Image: REUTERS/ THOMAS MUKOYA

Cash-strapped South Sudan is seeking a $250m (R4.2bn) loan from the African Export-Import Bank to implement a long-delayed peace agreement, to fight Covid-19 and to support food security.

“The African Export-Import Bank agreed to continue with the process of finalising the loan, provided that the government of South Sudan goes through the right procedures,” deputy minister of agriculture Lily Akol Akol said, telling state television late on Monday this was an “emergency loan”.

She spoke a week after the central bank warned that the country was running out of dollars.

Oil-rich South Sudan, which has suffered five years of civil war since becoming independent in 2011, has attracted repeated criticism for endemic corruption.

It has approached the International Monetary Fund for help, but it's unclear if that will be successful.

Experts trying to analyse South Sudan's debt profile face twin problems, one diplomat said: sometimes officials are unwilling to share data, and sometimes it is unclear if it even exists. The diplomat was not authorised to speak to the media and so requested anonymity.

Though South Sudan has always kept low dollar reserves — typically about two weeks — reserves were believed to have halved over the past month to five days worth of imports.

With the South Sudanese pound depreciating and reserves shrinking, the biggest risk is the kind of hyperinflation that topped 800% in 2016, helping push pockets of the country into famine the following year.

Currently, food prices are climbing but not spiking, said Abdalla Nasir, a wholesale trader at Konyokonyo market.

Security remains a problem. Rebels who did not sign the 2018 peace deal are still mounting attacks. Six bodyguards to one of the vice-presidents were ambushed and killed last week. — Reuters



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