South Sudan needs more loans – deputy minister
Despite South Sudan’s inability to pay loans on time, the deputy minister of finance and planning has surprisingly said that more loans are required to support the country’s budget.
Agok Makur Kur made the statement last week in response to the summon by the specialised committee on finance and planning.
The committee summoned the minister of finance and planning, the commissioner-general of the National Revenue Authority, and the Ministry of Petroleum to update the committee on money generated from oil and non-oil revenue, as well as how the money is spent.
Mr Makur described to the MPs how South Sudan obtains loans from lenders in order to fund government activities in the country.
He said President Salva Kiir established a loan committee with seven members in 2018 to negotiate loans with lenders on behalf of the government of South Sudan.
The committee is chaired by the deputy minister of finance and planning, and the members include the undersecretary for finance, the undersecretary for petroleum, the undersecretary for trade, the deputy governor of the Central Bank, the head of the department of legal affairs in the president’s office, and the advisor in the ministry of finance.
After the committee and the lender agree on a set amount, they create a temp sheet in which the government of South Sudan becomes a borrower to either the Afrexim Bank, the World Bank, or the IMF.
Makur indicated that the Afrexim Bank provided a loan to South Sudan in 2018 and again in 2021. The first loan was for $400 million, and the second loan was for $250 million, and South Sudan paid some amount to the bank this month.
“Because of the war, we are not able to pay the lenders on time. For that reason, the key MPs went to court because we were not able to give them.”Now we are negotiating with the team together with the ministry of justice, and we solved it, now we are in a good position,” Makur told the lawmakers.
However, in debt and aid policies for the fiscal year 2021/2022, the budget booklet stated that the government’s long-term debt management objective will be to raise adequate levels of financing at cost or risk.
In addition, the Minister of Finance and Planning, Agak Achuil, said during the presentation of the budget that “we will pursue strategies to ensure that the national public debt is maintained at levels over the medium to long term”.
In terms of domestic debt, he stated that the government will borrow any amount of money from the domestic market during this fiscal year, including borrowing from the South Sudan Central Bank. On the external debt, he said the government’s strategy will be to source external funds when required on concessional terms and ensure that any new borrowing does not undermine debt sustainability.
“We will also intensify efforts to consolidate the legal framework governing the contraction of debt and its management,” said Achuil.