South Sudan Nears $13 Billion Loan from UAE Firm Despite Debt Woes

The United Nations warns that South Sudan is on the verge of securing a massive $13 billion loan from a United Arab Emirates company, despite the country's long-standing struggles in managing oil-backed debts. The loan, if finalized, would be the largest-ever such loan for the oil-rich nation.

The United Nations Security Council has been alerted by a panel of experts that South Sudan is close to finalizing a $13 billion loan from Hamad Bin Khalifa Department of Projects, a company based in the United Arab Emirates. This potential loan comes at a time when South Sudan is grappling with significant debt burdens tied to its oil reserves.

The experts' report indicates that the loan deal would tie up a substantial portion of South Sudan's revenue for many years to come, depending on oil prices. This raises concerns over the country's debt sustainability and its ability to meet its financial obligations.

Hamad Bin Khalifa Department of Projects, registered in Dubai, maintains a low profile with no listed phone number and a non-functional website. The company's email address also failed to receive inquiries. The UAE Mission to the United Nations declined to provide any details, citing the company's private status.

The lack of transparency surrounding the loan agreement raises questions about the oversight and accountability measures in place. South Sudan's government has been criticized for its opaque financial practices in the past.

Oil is the backbone of South Sudan's economy, which gained independence from Sudan in 2011 after decades of civil war. However, the country has faced economic challenges since its independence, including a civil war from 2013 to 2018.

South Sudan uses pipelines in Sudan to transport its oil to Port Sudan for shipment to global markets. However, the country is dependent on Sudan's goodwill for these exports, and transit fees to Sudan eat into its oil revenues.

South Sudan has come under pressure from the United States and other countries to implement a 2018 peace deal that aims to end the civil war and pave the way for elections. However, the implementation process has been slow and faces challenges.

In the meantime, South Sudan continues to face a humanitarian crisis, with approximately 9 million of its 12.5 million people in need of protection and humanitarian assistance. The influx of refugees from neighboring Sudan further complicates the situation.

The panel of experts has expressed concerns about South Sudan's ability to repay the $13 billion loan, given its history of debt defaults. The country lost a case in the International Center for Settlement of Investment Disputes over a $700 million loan from Qatar National Bank in 2012.

The panel has also confirmed that South Sudan owes $151.97 million to the Eastern and Southern African Trade and Development Bank stemming from a previous oil-related deal.

The experts warn that the size of the planned loan from the UAE firm would likely tie up most of South Sudan's revenue for many years, depending on oil prices. This could compromise the country's ability to fund essential services and development programs.

The experts urge South Sudan's leaders to use the remaining time before the December 2024 elections to resolve outstanding issues and ensure that divergent expectations do not lead to further tensions and strife. They emphasize that elections would be a significant milestone in the country's post-conflict transition.

South Sudan's leaders face a daunting task in navigating the country's economic challenges, debt burdens, and humanitarian crisis while also working towards political stability and reconciliation. The planned $13 billion loan from the UAE firm adds another layer of complexity to an already fragile situation.