FOR IMMEDIATE RELEASE
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15 May 2025 – South Sudan has been ordered by the High Court in London to pay Afreximbank $657 million over loans for pandemic and infrastructure support[1], as reported by Global Trade Review.[2] This is the equivalent of 47% of South Sudan’s government revenue.[3]
According to the court filing, Afreximbank lent $400 million to South Sudan in 2019 for trade-enabling infrastructure. Afreximbank lent a further $63 million in August 2020 for Covid pandemic support, followed by a further $193 million in December 2020. The High Court has agreed with Afreximbank that all three loans are in default, and has been ordered South Sudan to pay the principal plus interest.
South Sudan is facing a dire hunger crisis and disease outbreaks including cholera, exacerbated by ongoing droughts and flooding related to the climate emergency, years of conflict and waves of returnees and refugees fleeing the civil war in Sudan.
The African Sovereign Debt Justice Network has said about the case: [4]
“The country is in a serious state of political decomposition due to the protracted conflict, making it difficult to fully engage in the ongoing legal battle with Afreximbank. Undoubtedly, any escalation in the political and security environment could further impede South Sudan’s negotiations with creditors like Afreximbank… The Afreximbank case underscores the challenges faced by African nations in managing sovereign debt while balancing economic development with political stability.”
James Wani, South Sudan Country Director of Christian Aid, said:
“In this context the government cannot and should not prioritise maintaining onerous debt repayments over investments in the basic needs of South Sudan’s citizens. Yet, it seems that instead of our country getting debt relief to help deal with these crises, we are getting sued by the creditor. This is intolerable.”
Heidi Chow, Executive Director of Debt Justice said:
“South Sudan’s debt to Afreximbank is governed by English law. This means that it is the responsibility of the UK government to change the law to prevent commercial creditors from using the English courts to force countries like South Sudan to divert urgently needed resources to paying debts.”
Maria Finnerty, Lead Economist at CAFOD, said:
“The cost of this ruling to South Sudan is immense. By failing to enact a debt justice law, the UK government has enabled a significant net outflow of resources from one of the most fragile and impoverished countries in the world to profitable private lenders”
Afreximbank says it is owed $429 million of principal and $112 million of interest, as of April 2024, plus other unspecified “damages” and legal costs. The interest rates on the original loans were 7.5%, 6% and 7% above the, now defunct, London Inter-Bank Offer Rate (LIBOR). This means the average interest charged across the three loans will have varied between 7.5% and 12% between 2020 and 2023.[5]
A lawyer representing Afreximbank said at a court hearing in late January that the case is a “straightforward and simple debt claim to which there is no conceivable defence”.[6]
South Sudan is highly dependent on aid to fund health and food security. Already hit badly by UK aid cuts several years ago, it will be further devastated by the freeze on US aid.[7]
South Sudan has not yet applied for the Common Framework, the G20 initiative designed to enable lower-income countries to restructure their debts. Afreximbank argues that the Framework does not apply to it because it is claims to be a “multilateral” lender, and therefore not required to participate in debt restructurings. Afreximbank is a profit-making bank, paying dividends of over 35%. It does write off debts owed to it by private companies.[8]
Notes:
Debt Justice (formerly Jubilee Debt Campaign) is a UK charity working to end poverty caused by unjust debt through education, research and campaigning: https://debtjustice.org.uk/
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[1] The High Court filing is available on request. The case was first filed in April 2024 – which suggests Sudan defaulted before this date – but was only made public on 13 February 2025 by Global Trade Review https://www.gtreview.com/news/africa/afreximbank-seeks-to-claw-back-us657mn-debt-from-south-sudan/.
[2] https://www.gtreview.com/news/africa/south-sudan-must-pay-afreximbank-us657mn-uk-court-rules/
[3] The IMF projects that South Sudan’s government revenue will be 26.5% of GDP in 2024/25 (https://www.imf.org/en/Publications/CR/Issues/2024/12/05/Republic-of-South-Sudan-Third-Review-Under-the-Staff-Monitored-Program-with-Board-558938) and GDP in US dollars will be around $5,300 million (IMF World Economic Outlook database). This means government revenue will be $1,400 million. $657 million is 47% of $1,400 million.
The IMF’s last Debt Sustainability Assessment for South Sudan published in June 2024 implied that South Sudan was meeting all its external debt payments (there are large salary arrears to civil servants).
The IMF projected that external debt payments would be 17.4% of government revenue in 2024, rising to 28.5% in 2025. 60% of South Sudan’s external debt is owed to commercial lenders – Afreximbank, Qatar National Bank and oil companies. These are high-interest short-maturity debts, so 91% of external debt service due is currently to these commercial lenders, 39% to Afreximbank alone. https://www.imf.org/en/Publications/CR/Issues/2024/06/10/Republic-of-South-Sudan-2023-Article-IV-Consultation-and-First-and-Second-Reviews-under-the-550191
[5] The High Court filing is available on request.
[6] https://www.gtreview.com/news/africa/afreximbank-seeks-to-claw-back-us657mn-debt-from-south-sudan/
[7] USAID contributes 36% of South Sudan’s overall ODA https://www.cgdev.org/blog/which-countries-are-most-exposed-us-aid-cuts-and-what-other-providers-can-do
[8] Afreximbank is a profit-making bank. It has share capital of $5 billion (https://www.afreximbank.com/investor-relations/). Of AfrEXIM Bank’s shares:
- 62% are held by 51 African governments and the African Development Bank
- 25% are held by 90 African private investors
- 9% are held by 14 investors from elsewhere in the world, including Standard Chartered from the UK
- 5% are held by SBM Securities Limited of Mauritius
Afreximbank has paid out dividends of 20% or more of shareholdings every year since 2011. In the last financial year reported, ending December 2023, the dividend payout ratio was 35% https://media.afreximbank.com/afrexim/Afreximbank-Annual-Report-2021-EN.pdf p218
In 2023 Afreximbank Bank wrote-off $179 million of loans, in 2022 it wrote-off $142 million of loans. These were almost certainly all loans to private companies rather than governments. (https://media.afreximbank.com/afrexim/Afreximbank-Group-Annual-Report-2023.pdf)