Home | News    Wednesday 16 May 2012

South Sudan’s announcement of $8 billion loan from China draws skepticism

separation
increase
decrease
separation
separation

May 15, 2012 (WASHINGTON) – The announcement made by South Sudan last month of an $8 billion loan from China appears to have been overblown, according to officials in Juba as well as diplomats.

JPEG - 46.5 kb
South Sudan President Salva Kiir Mayardit (centre L) and his Chinese counterpart Hu Jintao (centre R) attend a signing ceremony at the Great Hall of the People in Beijing April 24, 2012 (Reuters)

During a visit by South Sudan president Salva Kiir to Beijing, his Information Minister Barnaba Mariel Benjamin told reporters that the two sides sealed a deal on the line of credit that would be used mainly for infrastructure projects.

But Chinese officials at the time maintained silence and refused to confirm or deny Benjamin’s assertions.

South Sudan’s central bank governor said Kornelio Koriom Mayik acknowledged that they have only secured a tiny fraction of the loan.

“At the moment what has been concluded and signed is in the region of $170 [million],” Mayik told the Financial Times (FT).

He further revealed that South Sudan has obtained a $100 million credit line from Qatar National Bank (QNB) and is discussing a further $500 million deal with "a bank in the Gulf."

Mayik also confirmed that Beijing rejected Juba’s plea for financing an oil pipeline as an alternative to the one passing through Sudan’s territories.

“The Chinese didn’t agree to build a new pipeline; they said ‘we built one [in the
north already]; you use it" he added.

South Sudan inherited three-quarters of the oil when it gained independence from its northern neighbour last July. But Juba can only export is oil through the north’s pipelines. The two countries have failed to reach an understanding on oil transit fees.

Effective earlier this year South Sudan shut down its entire oil production to stop Khartoum from taking oil to make up for what it calls unpaid fees for transit and use of its facilities.

Both countries were dependent on oil revenues but South Sudan in particular, which is considered the poorest nation on earth, derived 98% of its income from crude exports.

Officials in Juba assert that they can survive for some time off its cash reserves by curtailing spending and seeking external help while it develop plans for an alternative pipeline to export its oil.

South Sudan is considering building two alternative pipelines, one to a port in Kenya and another through Ethiopia and Djibouti.

But analysts say building a pipeline could take up to four years and it is not clear if the newly independent nation can secure credit in the interim at reasonable rates.

Western diplomats believe the smaller sums on offer from China are towards a new embassy in Beijing and a $150 million preferred supplier credit agreement to revamp the airport in Juba.

“The $8 billion figure seems to have referred to the potential worth of South Sudan and China’s relationship in 10 years’ time, should oil get going again,” said a western diplomat to FT, describing the sum as “an initial wow-factor for the domestic audience”.

The Chinese foreign ministry underscored its willingness to support South Sudan without addressing the issue of financing.

“China fully understands South Sudan as a new country is facing many difficulties and challenges and is willing to offer whatever help China could offer to the South,” the Chinese foreign ministry told the FT. It added that it wanted “more powerful, reputable Chinese companies” to invest in the South.

South Sudan is left with few options to shore up its revenue shortfall. A leaked World Bank briefing obtained by Sudan Tribune this month paints a bleak picture of the economic situation. It projects that the country could run out of cash as early as next July.

Even with the most extreme tightening of belts, South Sudan could only last until December 2013, according to the World Bank.

South Sudan central bank governor admitted that there is truth to the grave projections.

“We are importing nearly everything and we are only drawing on reserves, so of course we have some difficulties,” Mayik said.

“On my calculations unless there are shocks we can go for another seven months without oil,” he said, using foreign reserves “in the region of $1.5bn”.

The World Bank has warned that the local currency could collapse leading to the breakdown of the state.

Inflation in Juba is already rising, fuel is in short supply and the local currency is depreciating on the black market.

“A lot of foreign businesses are weighing up leaving,” an international businessman based in Juba told FT, complaining that the government has raised taxes to an “unacceptable level” after the oil was shut down.

(ST)

Comments on the Sudan Tribune website must abide by the following rules. Contravention of these rules will lead to the user losing their Sudan Tribune account with immediate effect.

- No inciting violence
- No inappropriate or offensive language
- No racism, tribalism or sectarianism
- No inappropriate or derogatory remarks
- No deviation from the topic of the article
- No advertising, spamming or links
- No incomprehensible comments

Due to the unprecedented amount of racist and offensive language on the site, Sudan Tribune tries to vet all comments on the site.

There is now also a limit of 400 words per comment. If you want to express yourself in more detail than this allows, please e-mail your comment as an article to comment@sudantribune.com

Kind regards,

The Sudan Tribune editorial team.
  • 16 May 2012 08:42, by Deng Thiak Adut

    China is plays us for a fool and we cannot afford playing these authoritarian types of politics. China is complicit in the war crimes and crime against humanity committed and continues to be committed in Darfur. South have any legitimate political reason why China should benefits from us. Forget China; think about Europe, Africa, US and Australia.

    repondre message

    • 16 May 2012 13:00, by Bentiu CAPTAIN

      I think what South Sudanese should know is that China want our OIL to pass through KHARTOUM so that is stolen by BASHIR for the Chines. What SOUTH Sudan should know is that the big powers in the WORLD hate SOUTH sudan because it is a rich country and the killing of South Sudanese by Bashir is a good movie for them. What South Sudan should know is that Bashir is supported by US, RUSIA ,CHINA, & Ara

      repondre message

      • 16 May 2012 13:18, by Bentiu CAPTAIN

        And the world is still do not understand the life style of NILOTS, they still put wrong prediction that the people in the border states will die in few month of HUNGER. This world sound like Khartoum. What the world and its wrong media should know is that NILOTS were created by GOD not to depend on oil, BUT ON THEIR COWS, FOREST ,WATER ,ETC.The Nilots have stopped the OIL production in South Sudan

        repondre message

        • 16 May 2012 14:07, by Mahmoud mohamed Abdalla

          Bentiu CAPTAIN
          As Iam an AFRO-ARAB, I beg RSS and GOS to think about those innocent peoples in the border states.
          The holy bible and holy Quran are clearly telling us to stop HUNGER from all human beings and even animals

          repondre message

      • 16 May 2012 13:46, by DeltaBravo

        You are right brother Bentiu that is why Bashir still in power, it doesn’t mean he is strong,but because those greedy World power are still behind him behind close door. Some are using Bashir Intelligent to fight Terrorist, that make it difficult for both Countries to live in Peace. If Bashir is not in power today, you will see both side living peacefully.

        repondre message

      • 16 May 2012 13:49, by Mahmoud mohamed Abdalla

        Bentiu CAPTAIN
        don’t be ignorant

        pls refer to the oil pipeline from DOBA in CHAD through CAMERON to KIRBI port at the ochean.
        You will find out what GOS asked for was for your benefits.

        Bear in mind BUSINESS is BUSINESS.
        pls tell PAGAN to learn to speak the language of dollar and not hatred.
        UK and GERMANY did’t destroy their oil fields in north sea durning world-II war

        repondre message

  • 16 May 2012 08:50, by cul achar

    y the so call Kiir don’t want to learn: he made many mistakes over and over. y go to China and y not go somewhere else? this is really disturbing. when our army capture Phantou this same guy prematurely order the S.P.L.A to withdrew from Panthou as if he is the only person living in South Sudan. Better wake and learn something good for your self.

    repondre message

    • 17 May 2012 14:14, by man of the people

      Cul achar
      president kiir is lacking something and this guy is letting down our nation i hate him plus his corrupt official who always there to swallow every coin of money, kiir should step down and pagan takeover

      repondre message

    • 17 May 2012 14:22, by man of the people

      let see wht kiir gonna do for being a big aliar to us and start telling us that visit was succesful, shit to with big beard.

      repondre message

  • 16 May 2012 09:01, by homeboy

    SouthSudan should realize that opportunity is self reliance the lesser the debt the better.
    Jalaby and Deng why don’t you two grow up.

    repondre message

  • 16 May 2012 09:11, by AUGUSTINO DENG

    Salva Kiir, I think you are wrong of borrowing that 8 billion dollar. Southern Sudan have money, and I think the money which Southern Sudan Ministers have looted in the passed years is not less than 8 billion. I think it is more than that. If Southern Sudan have a plan to do with money, then they should already do something. This 8 billions will be pocketed within a week.

    By Augustino Deng.

    repondre message

  • 16 May 2012 09:39, by Pif Paf

    hahahahaha .. how foolish?

    SPLM lie about loans, lie about tactical withdrawals, lie about new pipelines. SPLM have built a state built on lies. These insects seem to be living in a fantasy in Juba, lying and denying to trick the poor hungry poplulation while the whole world is watching in astonishment. But reality will kick in veeeery soon, it will kick in so hard kiir hat will fall off.

    repondre message

    • 16 May 2012 10:33, by Lula

      President kiir with his official need really to set down and review the ways they have govern this state all over the period, they should not be confuse and make a decision. World has difference leaders they need to learn from others experience, consult, refreshments training, or all those muza(old age) ministers have to be sack out and put them apart as government advisers in tradition is their r

      repondre message

    • 16 May 2012 11:10, by Beneben Bai

      Kurnyel wad elnyel, go back to the answer of your minsiter of defense (Abdelrahim) when asked by Ahmed Bilal Altayed on how come SAF was crashed and kicked out from Panthou by SPLA twice particularly the one of 10 April. He then tamtam and said you know when Rasoool went to the battle of Ohud, Badir Alkubra .... etc then he said we gave everything to SAF although we lost the battle but not war

      repondre message

  • 16 May 2012 11:31, by Beneben Bai

    jalaby,kurnyel,Piiit Pat Pat, the answer of your minsiter of defense (Abdelrahim) when asked by Ahmed Bilal Altayeb on how come SAF was crashed and kicked out from Panthou by SPLA twice particularly the one of 10 April. He then tamtam and said you know when Rasoool went to the battle of Ohud, Badir Alkubra .... etc then he said we gave everything to SAF although we lost the battle but not war

    repondre message

    • 16 May 2012 12:25, by wadelsudan

      We all know Kirr and his government and SPLA thugs are professional liers and big theives, china or any country will not give them shit, in the next few month if he does not come to the north crying and begging and prostituting to Qatar the economy of the south will inevitably collapse according to the world bank.

      repondre message

      • 16 May 2012 13:54, by DeltaBravo

        To Wad

        You people in the North are the one brainwash by Bashir and NCP. when Soldiers are send to fight in war using Islam to brainwash them in order to stick in power. No leader ever done such stupid idea in Sudan History and then you guys believe and you say allahakbar stupid foolish people.

        repondre message

  • 16 May 2012 12:28, by Mahmoud mohamed Abdalla

    Southerners

    PLS open your minds and follow step-by-step where this money will be invested. Ask them to comply with USA engineering standards that related to oil and gas.
    Where is USA? the most experienced nation in oil & gas.

    repondre message

  • 16 May 2012 13:56, by Pif Paf

    Online Janoben,

    Its about time u understand the danger ur people are facing in the south. 4.7 million of your population (50%) are hungry. SPLA has looted all of the money. The ethopia famine in 1958 may well become a reality for s.sudan in 2013 plus tribal conflict. SPLA needs to focus on s.sudan and its people and forget about tryin to destablise sudan before its too late.

    repondre message

    • 16 May 2012 14:25, by DeltaBravo

      To Pif

      Remove the log in your own eyes before you remove the log in your brother. Do you know how many Northern Sudanese left the Country to Ethiopia and S.Sudan? Think about it first. Your Criminal Bashir is killing Sudanese people more then any other leader around the World.

      repondre message

      • 16 May 2012 15:15, by Pif Paf

        They left because of SPLA & SRF and that why Albashir made security a priority in talks with south. But SPLA has 4.7 million starved, and no money while talking about useless air-defences,drawing up unrecognized map and threating to take Abeyi . All these useless talk will not help your starved population. Remove the log from your eyes before u find it up ur ass. A word of advise !!

        repondre message

  • 16 May 2012 14:25, by weltahir

    (“The Chinese didn’t agree to build a new pipeline; they said ‘we built one [in the north already]; you use it" he added.)
    This is the reality, without peace in Sudan, south sudan will not survive.

    repondre message

  • 16 May 2012 18:40, by Northern Sudanese

    HAHAHAHAHAHHAHA no loan from China HAHAHAHAHHAHA

    THE ECONOMY OF THE SOUTH IS GETTING WORSE AND WORSE ALL THE TIME HAHAHHAHAHAA!!!!!!!!!!

    Loan from your friends? HAHAHAHAHHAAH!!!!!!!!!!!!

    repondre message

  • 16 May 2012 20:57, by sultan hamza

    i pity south sudan,,so 8 billion dollars are going 2 be spent on artillary so as 2 fight us .i wonder how an insect fights an elephant! i

    repondre message

  • 16 May 2012 21:50, by ebony

    Is this a joke? plz Kiir and his government come forward and tell the people of S.Sudan whom u r supposed to be serving "what are your plans now? NOW!

    repondre message

  • 16 May 2012 21:58, by lamented

    South Sudan don’t need to borrow money from China at this critical moment when South and North are at war. It will not work. South have two choices, borrow money from friendly countries, and or, contract out land or some natural resources. The only thing South Sudan need is its infrastructure not the oil. The analysis and critics only look at the oil. South Sudan have vast potential in Agriculture

    repondre message

    • 16 May 2012 23:48, by Northern Sudanese

      lamented

      lol hahahahaha friends? like who for e.g? Israel which is about to start a war with iran or the in debt US or the bankrupted EU????? who can provide 8 bilion for South Sudan?

      and about agriculture, South Sudan is just another Congo!

      repondre message

  • 17 May 2012 06:09, by Nguetbuny de Luelpiny

    uncles Kiir and Riek are short minded people.
    they do not think 50s years beyond. South Sudan could have build 3 Refineries,East Uppernile Maluth, West Uppernile AdokKiir,and Warrape state. Those could have save local gasoline consumption. But all uncles in south are so preoccupy with leadership and not getting the workdone. daily drinking is a problem.

    repondre message

    • 17 May 2012 06:18, by Mi diit

      Nguet de Buny,

      The looting was the problem. All the former finance ministers Kiir had appointed since 2005 were thieves. They stole the money together with their peers in crime. Billions of dollars stolen by a small group.

      repondre message

  • 17 May 2012 08:54, by Guandong

    Sudan has been at wars with the north for many years and that was b/s the Chinese are supporting North, there is no need for our newest born county to be thesame times serve by the trouble china. why do we dislike peace brokerer Uk, US, AU, and other international communities to help us in all spheres of political and econimic. I disliked china b/s they didnot help us in the peace process.

    repondre message

  • 17 May 2012 09:06, by Guandong

    China are arabs’ supporters instead to give us a loan they will kill our president. my presindent Salva? what do you need from such a people whose plot is to destroy your country? they now stopped road construction in malakal as aresult of Heglig( Gethloc) clashes. let built r/n with Eu,UK,US n other part of the world excluding China.

    repondre message

  • 17 May 2012 22:53, by Northern Sudanese

    China is becoming the new world supperpower in the coming 6 years.........stay alert, the US is bankrupted and cant afford to feed your poor land :)

    repondre message

Comment on this article


 
 

The following ads are provided by Google. SudanTribune has no authority on it.


Sudan Tribune

Promote your Page too

Latest Comments & Analysis


Riek Machar treacherous journey 2014-08-21 04:41:42 From plotting a failed coup to ending in foreign land By Steve Paterno August 20, 2014 - After failing to ascend to the helm of power through party structures, the overly ambitious Riek (...)

Sixty years of the Sudanese Armed Forces went unheeded 2014-08-20 06:01:50 By Mahmoud A. Suleiman August 19, 2014 - This article comes against the backdrop of the Sudanese armed Forces (SAF) celebration on Thursday 14th August 2014, for its Sixtieth Anniversary. (...)

Freedom of Expression in South Sudan: does it exists? 2014-08-18 22:02:01 By Joseph Stewart Sr. “You and I have a rendezvous with destiny. We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a (...)


MORE








Latest Press Releases


Friends and Diaspora of South Sudan urge leaders to choose peace 2014-08-19 20:29:59 FOR IMMEDIATE RELEASE CONTACT: Esther Sprague, Founder & Director, Sudan Unlimited 415.713.2495, esprague11@yahoo.com FRIENDS AND DIASPORA OF SOUTH SUDAN URGE LEADERS TO CHOOSE PEACE UNSC (...)

Local group calls to investigate assassination attempt on civil society activist 2014-08-03 08:29:24 The South Sudan Human Rights Society For Advocacy (SSHURSA) PRESS RELEASE: For Immediate Release, 2 August 2014 SSHURSA condemns attempted assassination on the life of the Alliance’s leader Deng (...)

Memory, healing and transformation in South Sudan 2014-07-23 05:55:08 Memory, Healing and Transformation in South Sudan A Working Paper by David K. Deng July 2014 Contents Introduction 1 What is memorialization? 2 Timing 2 Risks 3 Principles 3 Integrity 3 (...)


MORE

Copyright © 2003-2014 SudanTribune - All rights reserved.