The South Sudanese government has borrowed $76 million from a Dutch company and $256 million from a Chinese company, and plans to borrow about $1 billion more in order to cover a budget gap this year.
Oil outputs have dropped since December, affecting the main source of cash for the government. Meanwhile, expenses for arms imports, military salaries, and military operations have risen dramatically.
The government has been fighting a civil war since mid-December.
A budget document obtained by the news agency Reuters disclosed that the government has outstanding debts of $330 million to two Dutch and Chinese companies, as of 25 June.
The government document names the two companies as CNPC, the state-owned China National Petroleum Corporation, and Trafigura, a Dutch commodities trading company.
As of 25 June, the government owed CNPC $256 million and trading firm Trafigura $78 million, according to the document.
In addition to these outstanding debts, the government plans to borrow 3 billion South Sudanese pounds, about $1 billion at the official rate, from oil companies during the coming financial year.
Reuters reports that the budget anticipates revenues of 11.553 billion pounds for the 2014/2015 fiscal year, which is starting in July. From those revenues, the government said, 3.711 billion pounds would be paid to cover domestic loans and oil advances.
Finance Minister Aggrey Tisa Sabuni said in an address to parliament that the borrowing was “in effect rolling our obligation over until such a time as our budget is on a more sustainable financial footing.”
It remains unclear how much the South Sudanese government is still paying to cover operations expenses of the Ugandan army, which is allied to SPLA in the war.
The minister did not name the oil companies which would be approached for loans. The main investors in South Sudan include China National Petroleum Corp (CNPC), India’s ONGC Videsh and Malaysia’s Petronas.
Earlier this week the Vice President of South Sudan visited Beijing, where he met with the chairmen of Exim Bank and China National Petroleum Corporation.