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Donors to provide short term financial support to South Sudan

August 17, 2012 (WASHINGTON) — International donors, in a meeting held in Washington this week, agreed to provide short term financial support to South Sudan, the US State Department said on Thursday evening.

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Motorcycles line up for hours to get fuel before it runs out July 18, 2012 in Juba, South Sudan. (Getty)

A one-day donors meeting to support South Sudan was organised in Washington by the US Department of State, Department of the Treasury, and US Agency for International Development on Wednesday 15 August.

Besides a South Sudanese delegation, the meeting was attended by the UK, Norway, the European Union, the United Nations Development Program and United Nations Mission in South Sudan, the World Bank, the International Monetary Fund, and the African Development Bank.

The donors mainly discussed South Sudanese economic and humanitarian situations, and the implementation of the oil agreement made with Sudan earlier this month.

In a short statement released on Wednesday night, the State Department announced that " the participants agreed to work together to help South Sudan address short term financial issues as it prepares to resume oil production."

The South Sudanese government delegation briefed the major donors meeting about the economic situation and their ongoing austerity and reform measures.

On 3 August the two countries reached a deal for the first time since South Sudan’s independence over oil transportation fees. Khartoum says its implementation can only be effective after the signing of a security deal as it demands Juba to stop its support to Sudanese rebels.

Earlier this year, Juba shut down oil production and accused Khartoum of stealing its crude oil.

The lack of financial resources led the government to endorse an austerity plan and to enforce a number of taxes that allow the government to collect some 60 million South Sudanese pounds (SSP) per month.

The South Sudanese government also sought some loans from friendly countries and international companies to file a budget gap estimated at 3.7 billion SSP. Juba is also considering signing new oil and mining concessions.

The finance ministry also said it is preparing, if need be, to raise 1 billion SSP in national (domestic) borrowing.

South Sudan’s main worry is its ability to pay the salaries of its army and employees.