Keypoints:
- South Sudan loses UK case over $657m debt
- Afreximbank wins after no defence was filed
- Oil-based repayment plan failed in 2023
A BRITISH court has ordered South Sudan to repay $657 million to the African Export-Import Bank (Afreximbank) after the East African country defaulted on a series of loans used to support trade infrastructure and pandemic relief efforts. The ruling, issued on May 8 by the UK High Court, followed South Sudan’s failure to respond to legal proceedings or attend court hearings.
The case centred on three separate loan agreements signed with Afreximbank, totalling $63 million, $250 million, and $400 million. Although the government made partial repayments, the loans defaulted in 2023.
No defence, no trial, court says
Judge Lionel Persey KC granted a summary judgment in favour of the Cairo-based bank, stating that South Sudan had ‘no real prospect of successfully defending the claims’ and had given ‘no justification for a trial’.
Court documents revealed that Afreximbank had repeatedly attempted to contact South Sudanese authorities, including through its London embassy, but received no substantive response. The Bank of South Sudan, which guaranteed most of the loans, was also named as a co-defendant in the case.
Crude-for-debt plan collapsed
In September 2023, South Sudan proposed a debt restructuring deal to repay the outstanding amount through crude oil deliveries. However, the plan collapsed as the government cited ‘unforeseen circumstances’, including widespread flooding, regional insecurity, and collapsing oil revenues, for its failure to proceed.
Afreximbank, anticipating enforcement challenges, sought a detailed judgment from the UK court to support future efforts to claim assets in other jurisdictions where South Sudan may have holdings or trade engagements.
Debt ruling adds pressure to fragile state
The judgment comes at a time of deepening political and economic fragility in South Sudan. The country remains heavily dependent on oil exports and is grappling with hyperinflation, food shortages, and high external debt.
The United Nations has recently warned of renewed risks of civil war, with tensions growing among rival factions. The last civil conflict, which erupted in 2013 and officially ended in 2018, left more than 400,000 people dead and displaced millions.
While it remains unclear how the court’s ruling will be enforced, the decision marks a significant win for Afreximbank and a serious blow to South Sudan’s credibility in the international finance community.
