S.Sudan to lobby for Sudan debt, sanctions relief

Thu Mar 15, 2012 6:00am GMT

By Hereward Holland

JUBA (Reuters) - South Sudan said on Wednesday it would help its former civil war foe Sudan lobby for debt relief and the lifting of U.S. sanctions as it bid to end a damaging oil dispute with its northern neighbour.

A row over how much landlocked South Sudan should pay to export its oil via Sudan has prompted Juba to shut down its entire output, putting the country's fledgling economy under severe pressure.

In an apparent effort to curry favour with Sudan and persuade it to agree to a lower transit fee Pagan Amum, South Sudan's chief negotiator, said his country would try to help mobilise international funding to help Sudan plug its budget deficit and contribute $2.6 billion of its own money too.

"The areas where we will join international mobilisation for Sudan (are)...to receive assistance to finance the gap that results in the loss of oil revenue from South Sudan," Amum said after returning from the latest round of oil talks in Addis Ababa.

"The second area is in working for debt relief...the third area is the removal of U.S. sanctions on Sudan, and of course all this will contribute to creating a favourable investment environment where they would be able to seek loans," he said.

Sudan is facing a severe economic crisis after losing two thirds of its oil when the South became independent in July under a 2005 peace deal with Khartoum.

It is struggling with high food inflation and an external debt pile of almost $40 billion. Khartoum had unilaterally seized oil from the south by way of a higher transit fee, prompting Juba to end all exports.

Sudan's government said it welcomed the outcome of the latest round of talks as a step towards reaching "satisfying" results, state news agency SUNA said.   Continued...

South Sudan's President Salva Kiir (L) and Sudan's President Omar Hassan al-Bashir wave to the crowd during the Independence Day ceremony in Juba July 9, 2011. REUTERS/Thomas Mukoya
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