Khartoum - Arabstoday
The government of South Sudan has managed to secure a total of $600 million in loans amid growing fears about how long the new nation\'s economy can survive following its decision to halt its entire oil production this year. Juba retaliated to Khartoum\'s move of seizing part of its oil to make up for unpaid oil transportation fees. The two countries negotiated in length without agreeing on how much landlocked south should pay for using the north\'s oil infrastructure. Sudan lost three-quarters of its roughly 500,000 bpd of crude oil output when South Sudan gained independence in July 2011 under a 2005 settlement that ended two decades of civil war. This week the Sudanese finance minister said that Khartoum stands to lose $2.4 billion in revenues this year as a result of the oil dispute. The budget has projected that Sudan will receive around $36 per barrel in oil transit fees from the south. On the other hand, a confidential document obtained by Sudan Tribune this week showed a senior World Bank official warning that South Sudan\'s economy could go bankrupt as early as next July after depletion of its reserves. But an official in Juba dismissed the fears and said that help is on the way. South Sudan Deputy Finance Minister Marial Awou Yol told Bloomberg news that his country secured a $100 million line of credit from Qatar National Bank (QNB) and will receive a $500-million loan within a month from an unidentified provider. Loans are also being sought from countries including China. \"We have oil in the ground, we can mortgage this oil for money,\" Yol said. Lines of credit will be used to give importers access to foreign currency to buy goods including fuel, and future loans will allow the government to release dollars into the economy to fight inflation, he said. The official said South Sudan\'s pound value is being affected by uncertainty about where the government will acquire foreign exchange after losing revenue from oil production. \"The system is being driven by speculation\" and adjusting the official exchange rate to bring it in line with the black market would only create more uncertainty, he said. Instead, the government plans to stabilize the currency by injecting foreign exchange into the economy obtained from the loans it\'s negotiating.