Juba seeks credit line to buy imports

SOUTH Sudan aimed to seal a $200 million (R1.6 billion) credit line from an international bank within three months to cover imports and bolster the currency, a minister said, after an oil shutdown erased the source of almost all its hard currency.

In June, the nation secured a similar deal for $100m from Qatar National Bank (QNB), used to issue letters of credit for imports like food, fuel, building materials and medicine.

South Sudan, which seceded from Sudan last year under a 2005 peace deal, shut down its oil output of about 350 000 barrels a day in January in a row over how much it should pay to export through pipelines running through Sudanese territory.

The government still had about 20 percent of the QNB credit line left and planned to use it over the next two months, Commerce Minister Garang Diing Akuong said.

The letters of credit allow importers to buy dollars at the bank rate of 3.16 South Sudanese pounds (R5.95) to the dollar, a big discount to the black market price.

“For the last three months, a lot of business people were using this facility,” Akuong said at the weekend.

The deal helped the South Sudanese pound strengthen on the black market over the last few months from about 5.5 pounds to the dollar to 4.2.

Akuong said he expected the new credit line would be settled “within two to three months, maximum”, but declined to reveal the name of the bank because it had requested negotiations proceed in a “cool and quiet manner”.

Landlocked South Sudan loses about $1bn a year in hard currency to neighbouring Kenya and Uganda through remittances, informal trade and imports of goods as diverse as medicine, cement, clothes, furniture and food. – Reuters