S. Sudan finance minister asks parliament to approve “constrained budget”
June 29, 2015 (JUBA) – South Sudanese finance minister has presented 2015/2016 financial budget to the national legislative assembly on Monday for deliberations and approval under what he said was “extremely” challenging situation due to the current war in the country.
Minister David Deng Athorbei in his Monday presentation to the parliament said the government needed at least 10,642,131,330 to fund the fiscal year 2015/2016 but gave a warning on how difficult it would be to fund the estimated 10.7 billion ($3.7billion) resource envelope.
“Budget estimates were prepared under extremely challenging circumstances,”Athorbei told the parliament.
“The substantial decline in oil prices and the ongoing conflict has reduced our available (oil) resources, while the cost of running government activities continues to increase. As a result the budget for the 2015/2016 fiscal year is seriously constrained,” he said.
2015/2016 resource envelope is less by 1 billion South Sudanese pounds (SSP) when compared to 2014/2015.
South Sudan almost entirely depends on oil revenue by up to 98 per cent of income. The conflict which started in December 2013 in the national capital, Juba, and spread to oil producing states of Unity and Upper Nile led to closure of several oilfields.
The global oil price also dropped by at least $40 and caused a huge budget deficit. Athorbei said not only the budget “hurt” by the conflict and lower oil prices but “it is also hurting the economy.”
“Lower oil prices mean less revenue for the government, and fewer dollars in the market for exchange,” he said.
South Sudan government sells one dollar at 2.96 SSP officially in the Central Bank but the so-called black market rate has currently shot up to 10 SSP per a US dollar.
Athorbei however claimed that 2015/2016 budget prioritized restoring peace and enhancing reconciliation, good governance and strengthening justice as well as enabling delivery of social service, security and conflict resolution.
“We will use our limited resources to keep our government running and endeavour to provide core services to all communities of south Sudan, while seeking sources of financing externally and domestically through meaningful public financial management reform in the areas of human resource management, procurement and non-oil revenue collection,” he said.
In the ongoing peace process in Addis Ababa between president Salva Kiir’s government and the armed opposition faction led by his former deputy, Riek Machar, talks also centre on economic reforms as the rebels have been proposing a series of reforms in the economic sector which the said were needed in order to correctly manage the country’s economy.
The East African regional bloc, the Intergovernmental Authority on Development (IGAD), is expected to resume the talks in mid-July between the warring parties to end the 18-month long civil war.
(ST)