South Sudan receives $400 million AfDB loan

July 29, 2024 (Juba) – South Sudan has received a $400 million loan from the African Development Bank (AfDB) to boost its economy facing high inflation.

The country’s Finance Minister Marial Dongrin Ater said they reached an agreement with the African Development Bank to obtain funds to promote agricultural and business development.

“We have signed a $400 million agreement with the African Development Bank to support businesses across the country. We call on all eligible business owners, companies and organizations to apply for this financing opportunity. The goal of this exercise is to promote a more resilient private sector in the country,” he said.

The African Development Bank’s Board of Directors said in a statement that it has approved $46.2 million to support the first phase of South Sudan’s climate-resilient agri-food systems transformation program.

It noted that the move aims to increase agricultural productivity, improve food security and strengthen the country’s resilience.

According to the African Development Bank, South Sudan is the third most vulnerable country in the world and the fifth most vulnerable to climate change.

The AfDB statement noted that agriculture is the main source of income for about 95% of South Sudan’s population, which accounts for about 70.5% of the country’s workforce. Although 95% of the land is suitable for agriculture, only 4.5% is currently being used.

The bank said its relationship with South Sudan has been cooperative since the signing of the Comprehensive Peace Agreement (CPA) in 2005.

South Sudan became a member of the African Development Bank in May 2012 and its membership was approved in September 2013. The Bank opened an office in Juba in September 2012.

The conflict in Sudan has increased the cost of oil production in South Sudan, which relies on pipelines from Sudan. Continued flooding has also damaged some oil fields, partially offsetting the gains from higher global oil prices.

In addition, agricultural production stagnated, mainly due to floods. On the demand side, lower oil production led to a decline in net exports, driving economic growth to contract.

Estimates show that the country’s real gross domestic product (GDP) is expected to shrink by 0.4% in 2022/23, reflecting a easing of economic challenges caused by the Sudanese conflict.

(English stone)