Afreximbank is suing South Sudan for failing to repay US$657 million in loans provided for trade and pandemic support. The case, filed in April 2024, involves multiple agreements aimed at enhancing South Sudan’s trade infrastructure and responding to the COVID-19 pandemic. The absence of government representatives during court proceedings raises concerns about the nation’s ability to address its substantial debt obligations.
The African Export-Import Bank (Afreximbank) has initiated legal action against South Sudan for defaulting on a debt of US$657 million related to trade and pandemic support funding. This case comes during a challenging period for South Sudan, which heavily depends on oil exports for its economy. Both the government and the central bank of South Sudan are named as defendants in the London High Court case, which was filed in April 2024 but became public recently due to a request from Global Trade Review (GTR).
Afreximbank’s claim includes three agreements: a US$400 million term loan from 2019 aimed at trade-related infrastructure, followed by US$63 million under the Pandemic Trade Impact Mitigation Facility in 2020, and another US$250 million facility also in late 2020 to enhance trade and address pandemic-related needs. Afreximbank alleges that all three agreements have defaulted, resulting in principal amounts owed of US$231 million, US$11 million, and US$187 million, plus interest.
In addition to pursuing the South Sudanese government and central bank, Afreximbank is claiming against Trinity Energy and affiliated entities, which allegedly provided security for the debt agreements. Although not currently enforcing that security, the bank reserves its rights in case of non-repayment. The situation for South Sudan is dire, relying largely on oil exports that since February 2024 have been hampered due to an inoperable pipeline.
The International Monetary Fund (IMF) has reported that South Sudan faces significant macroeconomic challenges stemming from regional conflicts and natural disasters, which affect its economic stability. During a recent court hearing, Afreximbank’s lawyer described the debt claim as “straightforward and simple” indicating no viable defense for South Sudan. As of January 2025, the total claim amount stands at US$657 million.
Afreximbank sought a summary judgment from the High Court to expedite repayment. South Sudan and its Central Bank were absent from the hearing, but Afreximbank argued that they were likely aware of the proceedings due to attempts to communicate through emails and mail, which went unanswered. Comments regarding the relocation of South Sudan’s embassy in London were also noted, with no forwarding information provided.
Afreximbank’s legal action against South Sudan highlights the ongoing financial difficulties faced by one of the world’s most impoverished nations amid its reliance on oil exports. The case is significant not only for the debt amount of US$657 million but also the implications for South Sudan’s economic stability, particularly given its recent challenges related to infrastructure and natural disasters. The absence of South Sudan’s representatives during the court proceedings raises questions about their awareness of and ability to respond to the ongoing legal challenges.
Original Source: www.independent.co.ug
