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Thursday, Mar 26th, 2015

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South Sudan’s economy faces collapse as oil output plummets

Juba, March 22, 2015 (SSNA) -- The United Nations (UN) has warned that the overall economy of the Republic of South Sudan is at its final stage of collapse as the new country began printing money since December of last year.

UN’s top humanitarian official in South Sudan, Toby Lanzer, on Tuesday warned that the economy could get worse as the young nation goes on printing rampage—printing money in an attempt to try to “meet a budget shortfall.” Lanzer also revealed that South Sudan’s central bank started printing money late last year.

“Since December South Sudan's government has resorted to the old trick of printing money,” Lanzer told reporters at a news conference in Juba.

"Printing money when there is nothing to back the value of that currency usually leads to hyperinflation,” he warned.

Many experts agreed that the continuous delay of salaries of civil servants and some central government employees is also a result of a vanishing economy.

South Sudan depends heavily on oil revenues and the price of crude oil has fallen, forcing many investors to withdraw their financial backings for fear of an economic collapse amid raging civil war.

Early last year, government officials stormed out of a meeting in Juba after oil investors, mostly Chinese and Malaysian companies refused to lend huge amount of money to Juba.

However, in May 2014, Juba was able to borrow $200 million from an unnamed Chinese oil company. In the same month, South Sudan began a process of repayments delay on nearly all domestic loans, raising many questions and put the young nation’s economy capability into question.

In February, an official with the Ministry of Petroleum and Mining told the South Sudan News Agency (SSNA) that oil export has been declining and that Juba is anxious about both the decline of oil production and current market price. The official further disclosed that March delivery is 4.6 million barrels of Dar Blend crude oil, down two hundred thousand barrels (just over 4%), compared to last month delivery of 4.8 million barrels.

South Sudanese President Salva Kiir at a political rally on Wednesday admitted that his nation economy faces serious problems.

South Sudan’s Warring Factions Disagree on a Deal, Peace Talks Suspended

Addis Ababa, March 6, 2015 (SSNA) -- Rival factions of the ruling Sudan People’s Liberation Movement (SPLM) party have failed to reach a peace deal after many days of intense negotiations in the Ethiopian capital, Addis Ababa.

In a statement released on Friday, Ethiopia’s Prime Minister, Hailemariam Desalegn, disclosed that South Sudanese President Salva Kiir and rebel leader Dr. Riek Machar have failed to seal a deal that could bring the much-needed peace to the war-torn young nation.

“The talks did not produce the necessary breakthrough,” Desalegn said in the statement.

The Ethiopian leader has also expressed his disappointment over South Sudan main rivals’ inability to find a peaceful solution to the raging civil war.

“The consequences of inaction are the continued suffering of you, the people of South Sudan, and the prolonging of a senseless war in your country. This is unacceptable, both morally and politically,” he added.

Desalegn hopes that peace negotiations between South Sudanese rivals will resume in the near future.

Meanwhile, an African Union (AU) diplomatic source who asked not to be named because he is not authorized to speak to the media revealed to the South Sudan News Agency (SSNA) that South Sudan’s peace talks have basically been suspended and that the only thing that is not known to the public at the moment is IGAD public admission of its failure.

"There are simply enormous problems between both sides. I don’t think the two leaders of South Sudan [Kiir and Machar] will sign any agreement that IGAD and the international community would want them to sign. They seem to be looking for a deal that fit their own interests," the source said.

“I can tell you that IGAD has already suspended the negotiations and asked the African Union (AU) to either intervene or come up with an idea,” he revealed.

Fighting broke out in Mid-December 2013 between different units of presidential guards after months of political chaos among senior leaders of the SPLM.

President Kiir has accused Dr. Machar of planning a coup. Machar denied the accusation and said the coup allegation is deliberate act by Kiir in an attempt to try to purge his political rivals.

At least two million South Sudanese have fled their homes and tens of thousands of people have been killed.

UN Security Council Approves Sanctions on South Sudan

New York, March 3, 2015 (SSNA) -- The United Nations Security Council has passed US-proposed sanctions against South Sudan on Tuesday, paving the way for the international body to impose punitive measures against the young nation if the ongoing peace talks in Ethiopia failed.

The UNSC's action comes as the future of peace negotiations between South Sudan's warring factions look uncertain.

US’s Ambassador to the United Nations, Samantha Power, hails the move and warns that anyone who aggravates or who stands in the way of peace process will pay a price.

"Those who frustrate peace must begin to pay the price,” Power said.

Meanwhile, South Sudan’s Ambassador to the UN, Francis Deng, cautions that sanctions will only cause more suffering, asserting that President Salva Kiir and the people of South Sudan only need encouragement and support.

“What the president and the government of South Sudan need is encouragement and support, not condemnation,” Deng warned.

Deng also said he hopes the Council will not implement the measures.

Last week, the United States circulated a draft resolution to the UN Security Council. The proposal which called for the establishment of a panel of experts and committee to oversee the sanctions was questioned by China.

The US also warned that the newly-passed resolution is a first step and that tougher sanctions will follow.

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