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South Sudan pledges transparency in finance deals

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May 19, 2012 (JUBA) - South Sudan says it will allow full access to information involving deals with international financial institutions, following a report by Global Witness on Wednesday, which it recommends that the new nation “exercise caution” and total transparency in pursuing oil-backed financing.

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Salva Kiir waves the constitution of his country for the crowd to see during a ceremony in the capital Juba on July 09, 2011 to celebrate South Sudan’s independence (Getty)

The country, which became independent last year is looking to fill the black hole left by the loss of oil revenue after Juba opted to halt production over a transit fee dispute with Sudan.

South Sudan took with it 75 percent of production when it seceded but with the pipelines and refineries needed for exporting it’s crude all in north Sudan.

The two sides have been unable to agree on how much South Sudan should pay and after Khartoum began siphoning-off oil, Juba stopped all production in January, depriving the government of 98 percent of its income.

World Bank documents published by Sudan Tribune this month warned that the decision has left South Sudan’s economy on the verge of collapse.

To fill the void Juba is looking for finance backed by future oil revenues, either from when exports resume through Sudan, or when a new pipeline is built to the East African coast.

“It is a policy of the government that any deal with international financial institutions, be they loans, humanitarian and disaster management assistances must be made known to the general public”, Salvatore Garang Mabiordit, undersecretary in the country’s minister of Finance and economic planning said Saturday.

“Giving detailed publication of any loan agreement will be critical in preventing exploitative terms, corruption, and mismanagement from undermining immediate benefits”, reads part of the report released on Wednesday.

The Global Witness report comes after several reports indicating that government of South Sudan was securing loans, ranging from $100-500 million, to mitigate the impacts of the current economic crisis and to finance specific infrastructure projects.

The report by Global Witness campaigner Dana Wilkins, observed that there are indications that they will be, at least in part, tied to future oil revenues.

Global Witness and others have repeatedly documented the instability and capital flight that result when resource-rich developing countries take on large public debt in the absence of robust public reporting and auditing systems.

“Taking on loans with a commitment to repay them in future oil production or revenues can be risky under the best circumstances,” said Global Witness campaigner Dana Wilkins.

“The risks of corruption and mismanagement are huge, and given the importance of oil to South Sudan’s future, the Government must be extremely careful and transparent in managing these deals.”

But Mabiordit dismissed fears of mismanagement of public funds and explained that the government puts “strict procedures and regulations” indicative of its commitment to promoting transparency and accountability in financial engagements at all level of governance.

“There should be no fear in public expenditure because there are financial policies commensurate to the international standards to regulating public expenditures. These policies are being implemented. As a ministry of finance and economic planning we have sent out to all spending agencies clear instructions outlining procedures that must be followed relating to how funds should be spent”, explained Mabiordit.

The senior official explained further that the ministry is implementing austerity measures to address “financial gaps” created by the closure of oil production and denied that reserves held by the Central Bank are depleting that critical institution-building, infrastructure, and other projects may have to go unfunded.

“It is true there are challenges but the government is exerting efforts to close these gaps. The austerity measures are being implemented and we are getting loans and financial assistance from our friendly countries. Some investors are also willing to provide some financial assistance”, he explained.

Mabiordit believes that the state can survive until a new deal to resume production through Sudan with international guarantees is reached or when alternative routes are built.

He added that the government has been ready to resume negotiations with Sudan, but added that Juba was happy for the oil to remain in the ground for future use if no deal is reached.

“The oil will remain shut. This is not bad. It assures physical security instead of allowing production to benefit other people”, he said.

A United Nations Security Council resolution on 2 May asked the two sides to cease hostilities on their disputed border and resume talks on oil, border demarcation, security and other issues.

Mabiordit said that the government has the right to reach an understanding with foreign financial institutions for immediate funding and these funds will be paid against future oil production once it resumes.

However, Global Witness observed that such deals are not disclosed to the public in many countries facing similar economic challenges.

“In many cases from around the world, this process has been done behind closed doors, the wider public having no idea that their natural resources have been pre-sold, sometimes years in advance and at likely exorbitant interest rates”, the report adds.

The government of South Sudan, the report says, feels that oil-backed loans are currently necessary to prevent economic collapse but adds that it is critical that “robust protections” are put in place to minimise “future costs and consequences”.

Quoting international best practice as outlined by the International Monetary Fund, the report observed that money from these loans should be received by “a carefully controlled national bank account” managed by the Ministry of Finance and Economic Planning, and the balance, liabilities, and loan terms should be fully disclosed to the public.

“As the rightful owners of the country’s natural resources, all South Sudanese citizens should be allowed the information necessary to understand exactly what has been agreed and what the future obligations of the country will be,” added Wilkins.

“This will be one of the first major tests of the Government’s repeated commitments to transparency and accountability.”

(ST)

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  • 20 May 2012 08:19, by SEE ME

    “Taking on loans with a commitment to repay them in future oil production or revenues can be risky under the best circumstances,” said Global Witness Campaigner Dana Wilkins.

    RSS must understand that the only economical route of pipeline for the transportation of crude oil is through Sudan.

    repondre message

    • 20 May 2012 08:39, by DANDHEL

      Arabs are thieves and gay.
      Arabs are thieves and gay.

      SEE ME is thief and gay .
      Jalaby is thieves and gay..

      and who ever is Arabs is also thief and gay.

      Government in Khartoum is rules by gay peoples...A gay government..
      hahahahahaha whaaaat a gay Arabs..

      repondre message

      • 20 May 2012 15:31, by SEE ME

        I will not blame you as your were grown in this obscene language.

        The OBSCENE language was been breastfeeding for you.

        I do request you not to use your inhumane and bad words with all small kids in RSS.

        repondre message

  • 20 May 2012 08:24, by SEE ME

    The SWAMPY lands that surrounding OIR reservors in RSS are HIGHLY CORROSIVE. That means the pipeline will not last for long time due to leaks and localized severe corrosion areas.

    repondre message

    • 20 May 2012 08:40, by DANDHEL

      Gay SEE ME...

      repondre message

      • 20 May 2012 15:32, by SEE ME

        I will not blame you as your were grown in this obscene language.

        The OBSCENE language was been breastfeeding for you.

        I do request you not to use your inhumane and bad words with all small kids in RSS.

        repondre message

      • 20 May 2012 15:38, by SEE ME

        Is this obscene language in discussions occupies main part of your southern Sudanese culture?????

        I do request all believers in GOD to pray for you so that you can be changed from this obscene and degrading language

        repondre message

    • 20 May 2012 10:58, by Beneben Bai

      SEE MEE, I told you to go back to USA for more knowledge on Sudan and S. Sudan if you want that. what you are talking about is the best option we currently have. instead of our oil be poured into the mouths of theives in khartoum, we decided to stop for a while until we get better options. understood?

      repondre message

      • 20 May 2012 15:50, by SEE ME

        Even OBAMA loves to in his home land Africa

        I am afraid for him from breastfeeded with impolite and bad language who are considered educated men from RSS.

        repondre message

  • 20 May 2012 08:38, by Daniel Buolmawei

    "Ranging from US$100-500 million?"

    This is what I don’t like. Our government needs to reports everything in details. First, it was reported $8 billion, now it between $100-$500 millions. When you sign a contract you know exactly what you signed. There’s no room for "about," "between," or "range." You want to be exacted. I signed $8 billion or $500 million. The range leaves a void to corruption.

    repondre message

    • 20 May 2012 10:47, by Roordiordit

      To:Daniel.
      I agreed with your comment.precisely,all the government programs should be report manipulatively for the citizens satisfaction and the government subordinates.The amount should be reported after it has been weighted on the government’s table to prevent stealing of public fund from others ministers which like to benefit themselves.

      repondre message

      • 20 May 2012 10:59, by Roordiordit

        Reporting the excact amount can demonstrate that,the government officials are confident to spend the money faithfully,but assuming the amount can provide the room of public mismanagement funds.Government must appoint the comittee to supervise the work for the quick development of the country.

        repondre message

  • 20 May 2012 10:11, by Beneben Bai

    we are not theives like those of khartoum stealing S. Sudan oil and not showing their citizens how they spent money country wide and how much do they have in Malaysian Banks

    repondre message

  • 20 May 2012 10:28, by 4Justice

    A small sugar factory in Mangala and a mini oil refinary would make a huge difference. Food production we have vast supply of fresh water to irrigate farms. why why why are you so retarded are cursed? may be we need deliverance ministery to break the curse

    repondre message

    • 20 May 2012 11:48, by Beneben Bai

      4Justice, you hit the point my brother

      repondre message

  • 20 May 2012 10:46, by Emmanuel Ajang Solomon

    Dear, Salvatore is good to tell the world what is going on on all contracts and loans !decisions, bad good war , hunger you fell as if this country is only for you. Look what you’re doing to innocent traders who gave their, food,Fuel and all the supply to theArmy of the republic of South Sudan and you refuse to pay because you are direct to the president, why did you agree to deceived them first w

    repondre message

  • 20 May 2012 11:38, by pabaak

    too many pledges does help alone without good mechanism in place. what cause the value of pound to depreciate in less than month against the Dollar? it is because there no clear bank policies about how to control the currency, there is no doubt that even now the buying and trade with Dollar is controlled by cattle keepers, where is in the world the cattle keepers become strong part to determine

    repondre message

    • 20 May 2012 11:46, by pabaak

      the value of currency in the country. so South Sudan is going to borrow money from the international monetary funds and other world monies bodies, its absolutely right to borrow but its extremely important to be careful about the strings and term of these loans. because I know our people are so careless about spending money they don’t have. and the evidence are there on dirt streets of Juba,

      repondre message

      • 20 May 2012 11:55, by pabaak

        the last car models are rolling, which give you to wonder how come these multi-thousandth Dollars models are rolling while even there no street connecting states, counties, or payams. So this where international worry come from, because they expect these borrowed money will bear no difference from the previous one, because will be controlled by the same people and managed by the same folks.

        repondre message

  • 20 May 2012 12:52, by 4Justice

    I sometimes wonder whether he can even tie his own shoe laces

    repondre message

  • 20 May 2012 15:00, by Northern Sudanese

    people

    dont waste your time with south sudan...........it is already dead XD

    repondre message

  • 20 May 2012 15:43, by SEE ME

    To all my southern Sudanese African brothers:

    Is the obscene language in discussions occupies main part of your southern Sudanese culture?????

    I do request all believers in GOD to pray for you so that you can be changed from this obscene and degrading language.

    I never heared this kind of bad language among my well educated white friends.

    repondre message

  • 20 May 2012 15:58, by SEE ME

    Those from RSS who are using the impolite and bad language are after replacing:

    "The rule of Law" by the "Law of the Jungle"

    repondre message

  • 20 May 2012 17:18, by 4Justice

    So Mr. See Mee dropping bomb on innocent women and children is not obscene? God does not like hypocrates, My God wants me to stand up against all forms of evil and greed. In our culture we don’t hide evil we expose it, we don’t care whether you are King or a dictator we only fear the God of the bible. Political correctness is not in our lexicon

    repondre message

    • 20 May 2012 18:21, by SEE ME

      PLS inform those who insist to use bad language about:

      "God of the bible" where iam sure no impolite words or statements.

      Ihope your GOD is not with you to support any one who uses impolite language.

      repondre message

  • 20 May 2012 22:09, by panom lualbil

    ’It’s better oils remain in ground than to benefit others,’ said, Salvatore. I agreed with you too Sir, because OMAR knows the strong our economy through oils, the stronger our military’s services of which he doesnot like. Therefore, he otherwise want more fees or we cann’t use its infractures. Ya need to put effort toward alternative !

    repondre message

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