S. Sudan unveils measures to tackle economic shocks

May 7, 2015 (JUBA) – South Sudan has unveiled measures to address economic shocks affecting the country since December 2013 when political difference within its ruling Sudan Peoples Liberation Movement (SPLM) party led to outbreak of conflict.

Speaking at Monday’s consultative meeting held in Juba, vice president James Wani Igga said government would cut expenditures, raise taxes, increase exports to international markets and appeal for direct foreign investments.

He stressed that some parts of the world’s youngest nation were safe for investment.

South Sudan’s environment minister, Deng Deng Hoc said the conference drew economic experts from the region to brainstorm on how to handle the economic crisis.

“This will have a positive effect on the economy, will reduce demand on the dollar and increase the volume of trade between neighbouring countries,” said Deng, who chaired a ministerial committee formed to study the economic situation in South Sudan.

Finance minister, Deng Athorbei said government plans to reduce public expenditures, cut foreign trips and improve the collection and management of non-oil revenues.

“The purpose of the conference is to address the revenue shortfalls and come out with a way to salvage economic collapse of the country resulting from fiscal deficit in annual budget,” said Athorbei.

The government, he further revealed, has been intensifying the implementation of measures approved in the 2015 budget, taking into account key measures, including an across the board reduction in expenditure ceilings on goods, services and capital.

“We will continue to strengthen the public financial management system and deepen structural reforms in the public sector as part of the overall objective of ensuring transparent and accountable economic governance”, stressed the finance minister.

Currently, South Sudan solely relies on oil revenues to fund its annual budget.

Minister Athorbei said measures being taken by government are informed by the fact that the recent volatilities in oil prices affected the country’s reserves and fiscal revenues negatively, adding that “In particular, they have contributed to the setbacks in the achievement of macroeconomic objectives for the past two years”.

“Likewise, the impact of the shortfall in oil output in 2012, which contributed to the fiscal slippages that the ministry of finance has been addressing with some success since 2013,” he further added.

TOUGH MEASURES

Meanwhile, to make reduction in expenditures effective and ensure the achievement of our fiscal objectives, the finance ministry has reportedly issued budget implementation instructions to all spending agencies to ensure they adhere to strict measures in place.

“All transfers to the states and counties will continue to be aligned to the national government programmes. Conditional transfers are to continue limiting the award of new contracts and focus on clearance of existing commitments in accordance with government policy on public financial management system,” said Athorbei.

He attributed the decline in oil production to South Sudan’s ongoing conflict and increase in global production, partly emanating from increase in sale of petroleum products.

South Sudan government reportedly generates $100 million monthly, $40% of which comes from non-oil revenues and 60% from oil. It expenditures reportedly stand at 900 million South Sudanese pounds (SSP) with a deficit of SSP 600 million each month.

(ST)