Cash-strapped South Sudan is seeking a $250 million loan from the African Export-Import Bank, the deputy minister of agriculture said, to implement a long-delayed peace agreement, fight COVID-19 and support food security.
“The African Export-Import Bank agreed to continue with the process of finalizing the loan provided that the government of South Sudan goes through the right procedures,” Lily Akol Akol said, telling state television late on Monday it was an “emergency loan”.
She spoke a week after the central bank warned 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 also approached the International Monetary Fund (IMF) for help, but it’s unclear if that will be successful.
Experts trying to analyse South Sudan’s debt profile are facing 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.
Although South Sudan has always kept low dollar reserves - typically around two weeks - reserves were believed to have halved over the past month to five days worth of imports, the diplomat told Reuters last week.
With the South Sudanese pound (SSP) 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. Since June, a 25 kg bag of a beans has increased from 8,000 SSP in June to 10,000 SSP, and a 50 kg bag of maize from 8,500 SSP to 12,000 SSP.
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.