Broke South Sudan now looks to Kenya and Uganda for bailout

Published by The East African
On 22 August 2016 saa 03:02
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South Sudan is pleading with Kenya and Uganda for economic support to avert a humanitarian crisis after a fresh conflict brought the country to its knees.

Mid last week, a delegation of Transitional Government of South Sudan officials led by First Vice-President Taban Deng Gai was in Kenya on a mission seeking a bailout.

The EastAfrican has learnt that Juba will also be reaching out to Uganda later this month to craft a bailout package that will see Kampala pay its traders the $35.2 million Juba owes them in a bid to have them resume supplies to the country.

“The vice president will go to Kampala to request the Ugandan government to pay traders who supplied cereals to Juba but haven’t been paid. The money will then be converted into a loan, for which Juba and Kampala officials will work out a repayment plan,” a diplomatic source with the knowledge of the matter said.

The delegation to Nairobi, which included four ministers, met with Kenyan President Uhuru Kenyatta, Cabinet Secretary for Foreign Affairs Amina Mohamed and a number of Kenya government officials.

A source privy to the discussions told The EastAfrican that Mr Gai informed President Kenyatta that the country’s economy was in a perilous state and needed urgent help.

Mr Gai implored the Kenya government to give his country a soft loan to help it deal with its current problems.

“We have been facing difficulties in delivering services to the people and we briefed President Kenyatta about the current economic difficulties the country is facing. We are experiencing severe inflation because of the civil war, poor oil production and the low oil prices, which have basically drained us as we are not making money. We asked Kenya for help so that our economy does not grind to a halt,” Mr Gai said when he addressed a press conference at the Nairobi Intercontinental Hotel after a meeting with President Kenyatta.

The delegation also requested Kenya’s support for implementation of the peace agreement by the Transitional Government as currently formed. This would mean excluding former first vice president Riek Machar.

“The President’s view was that he would not act outside Igad,” said the source.

Economic bailout

On the requests for a soft loan and food supplies, President Kenyatta is reported to have advised the group to send their finance minister, their Central Bank Governor and agriculture minister to Nairobi with a clear proposal, including the amounts needed and the modalities for repayment.

Kenya can then determine its level of commitment “cognisant of the fact that we have interests in South Sudan and cannot be aloof to the suffering of its people.”

The loan, the source said, could be worked out along the same lines as the economic bailout of Zimbabwe by South Africa a while back. South Sudan relies on Kenyan traders for key supplies including food, edible oils, pharmaceuticals, electronic products and manufactured goods.

Uganda is South Sudan’s biggest trading partner and exports maize, vegetables, sugar, iron and steel, cement, beer, motor lubricants and detergents. However, following fresh fighting in the country in July, most foreign traders have returned to their countries for security reasons.

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South Sudan is pleading with Kenya and Uganda for economic support to avert a humanitarian crisis after a fresh conflict brought the country to its knees.