South Sudan still owes neighboring Sudan $1.3 billion from a 2012 deal that ended a dispute over oil payments between the two nations, the deputy finance minister – Mou Ambrose Thiik revealed last week before he was sacked.
The amount is equivalent to eight years’ worth of oil revenues for South Sudan at current prices, according to Mou Ambrose Thiik. In 2012, South Sudan shut down oil output after it could not reach an agreement with neighboring Sudan, its former ruler, on payment to use its infrastructure to export crude from its oilfields.
South Sudan eventually agreed to pay $3 billion to Khartoum in a late 2012 agreement. South Sudan is also supposed to pay royalties fees for each barrel of oil it exports through Sudan. But Thiik told Reuters that Juba still owes $1.3 billion of that original amount.
According to Reuters, the debt underscores the ruinous state of the economy of the world’s youngest nation amid a four-year civil war that has killed tens of thousands of people, forced 4 million people to flee their homes and slashed oil output, the main source of revenues. Juba has not paid soldiers or civil servants for most of this year.
The International Monetary Fund estimated that in the 2015/16 financial year, Juba accumulated $291 million in payment arrears related to the 2012 deal.