South Sudan To Borrow About $1B From Oil Firms In 2014/15

Article title
South Sudan plans to borrow from oil companies during the coming financial year to help cover repayments on domestic loans and previous oil advances.

Reuters

JUBA, July 2 (Reuters) - South Sudan plans to borrow 3 billion South Sudanese pounds, about $1 billion at the official rate, from oil companies during the coming financial year to help cover repayments on domestic loans and previous oil advances, the government said in a budget document.

South Sudan has turned to oil companies before to plug a gap caused by a drop in oil output, the main source of cash for a nation mired in conflict since mid-December. Fighting between rebels and the government has damaged some fields.

The budget anticpates revenues of 11.553 billion pounds for the 2014/2015 fiscal year, which is starting in July. About three-quarters of that is due to come from oil earnings, according to the text of the finance minister's speech dated June 25.

A lawmaker told Reuters it was presented to parliament on Wednesday.

From those revenues, the government said, 3.711 billion pounds would be paid to cover domestic loans and oil advances.

"In order to offset the negative impact these repayments will have on our budget financing next financial year, we intend to borrow a further 3 billion pounds from the oil companies," Finance Minister Aggrey Tisa Sabuni said in the speech.

He said this borrowing was "in effect rolling our obligation over until such a time as our budget is on a more sustainable financial footing."


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