Anti-corruption advocates are criticizing the South Sudan government’s decision to take a $500 million loan from the Qatar National Bank.
London-based Global Witness said for South Sudan the size of the loan is “the equivalent of the U.S. government taking out a loan larger than their military and education budgets combined.”
As international oil prices have plummeted in the midst of ongoing fighting in the country, there are signs that South Sudan’s economy is floundering. But Global Witness said that taking the loan from Qatar, with its high interest rate, “the government risks selling South Sudan’s future to pay for today.”
The government has staked untapped crude oil as collateral if cash is not available to repay the loan, which the advocacy group warned could “lock the country into a dangerous cycle of debt – oil dollars are used to pay off old loans while new loans fund the budget.”
Thomas Wani Kundu, the chair of Parliament’s Information Committee, told Radio Miraya the money was needed for key development projects.
“We have roads and airports to be constructed and also the services that are supposed to be rendered to the people. So this money alone is meager, because war has devastated the production area.”