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Global Witness rings alarm bell over South Sudan’s finances

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July 10, 2014 (JUBA) – The UK-based Global Witness organisation has warned that South Sudan is in the process of racking up more debt, the bulk of which is not going to be used towards development projects.

“On the third anniversary of its independence, South Sudan looks like it is sliding into a dangerous cycle of oil-backed debt. The new budget, announced last week, signaled that another 3 billion SSP ($1 billion) would have to be borrowed from oil companies next year,” the transparency group said in a statement yesterday.

The group asserted that this “huge sum” equals the amount requested by donors to meet humanitarian needs resulting from the South Sudanese conflict that broke out late last year.

“Worryingly, most of this money will go straight back to the same oil companies, to pay off last year’s debts”.

South Sudan’s total debt is estimated to be at 10 billion SSP, according to its finance minister Agrey Tisa Sabuni.

Global Witness , a group which campaigns against conflict and corruption related to natural resources, stressed that the public must be informed on the terms under which the money is being borrowed so that citizens “can be sure their government is negotiating the best deals in the high risk world of oil-backed borrowing”.

“The government and the rebels failure to negotiate a way out of the conflict is pushing up state spending on the armed forces, while development projects go unfunded. Around 35% of the budget will be used to pay for the security sector…….Only 12% of the budget will be invested into healthcare, infrastructure and education combined,” it added.

“We have seen these types of debt cycles before. If the government is to avoid bankruptcy, it must take steps to get its house in order and make any future loan deals transparent. If it is serious about investing in the South Sudanese people, it also needs to get serious about the peace talks too. And if these talks are to produce a stable South Sudan, oil has to be at the top of the agenda”.

Last week the South Sudanese government tabled the 2014-2015 annual budget before parliament.

Oil revenue contributes 8.891 billion SSP, while non-oil revenue accounts for 2.650 billion SSP, with 436 million SSP received through donations and loans from the World Bank.

The largest expenditure in the 11.278 billion SSP budget is the salaries of government employees, including soldiers serving in the national army (SPLA) and other organized forces, accounting for 4.378 billion SSP or 39% of the overall budget. This is followed by the security sector, accounting for 3.13 billion SSP or 35% of the budget.

Just 13% of overall budget spending will be allocated to generating capital.

The education sector will receive 622 million SSP for payment of 28,000 teacher salaries, as well as provide support for state and county education departments. This budget also includes funds for universities and teacher training, according the proposal tabled before lawmakers on Wednesday.

The health sector will receive 451 million SSP, jointly provided by the government (397 million SSP) and the World Bank (54 million SSP).

The infrastructure sector has been allocated 393 million SSP, 158 million of which will come from government revenues and 235 million from development partners.

Oil, which is considered South Sudan’s economic lifeline, has been reduced to about 160,000 barrels per day since the outbreak of the conflict between the government and forces loyal to ex-VP Riek Machar.

(ST)

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  • 11 July 07:01, by Joseph Canada

    God help us!! the country is already in debt of 10B in three years? wow.. how rich is Salva Kiir and circle of squanders?
    This debt will have to be paid somehow and must be paid, which have to come out of Citizen Tax. The citizens who doesn’t know what the debt was for.

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  • 11 July 07:05, by Philosopherking

    Holding the country’s resources ransom, this good for nothing terrorist government, borrows money to kill its own people! Look at the government spending and you will notice this government doesn’t care about its people! Kirr keeps pushing the already exhausted people of South Sudan against him! What a shame!

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    • 11 July 07:38, by Chol A.

      That is what always happen when there are too many greedy and foolish educators who claimed to leaders first and work together instance of rebuilding country. The government it spending too much money on power hunger notorious Nuerism that always remained opposed everyone whether north or South still no better place for them to stable. So it all shame on us whole whether rebels or government!.

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      • 11 July 08:57, by Sir King

        That is Warrap Economy. Take the money and burry it or put in the sack in the house. No development or circulation. What a cattle keeper management!

        Kiir Mayardit will be an history in the worst reign in South Sudan.

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  • 11 July 07:08, by Philosopherking

    This is what happens when the government is being led by an incompetent and visionless government. The time to say enough is enough is now....Salva must leave, he is an embarrassment to this country. This criminal must be brought to book....for the destruction he has caused....he must account for all the resources he has plundered!

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  • 11 July 07:35, by jur_likang_a_ likan’g

    Words alone is not enough. Action must be followed. This is why they do not like federalism. They want unitary system whereby they can tax those who are not involved in the war of barbarism to pay their senseless loan that is used to purchase weapon to kill citizens. What a pathetic group of subhuman beings!!

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    • 11 July 08:15, by Emporio

      is well worth the efforts of a lifetime to have attained knowledge which justifies an attack on the root of all evil—reik causing the whole nations problem from the battle fields to economic level Our country is now taking so steady a course as to show by what road it will pass to destruction

      repondre message

    • 11 July 10:29, by Sir King

      We don’t want Equatorian Kokora, but real federal. You equatorians will suffer alot if we do it the way we think.

      Federal must come but not EQUATORIAN FEDERAL SYSTEM.

      repondre message

    • 11 July 17:57, by Hardlinner

      Who would pay debt that kiir is incurring? What is use of the security and army which suck up 75% of national budget. These large primitive national army need to cease. Kiir need small and well equip army not worthless under equipped huge army. Ss need just 20 000 fully equiped soldiers.Jet fighters and gunships can cover the role 100,000 soldiers. Think smart kiir or leave us alone.

      repondre message

  • 11 July 14:37, by Positive Thinker

    Our Problems started on July 30th, 2005 when the man of Vision died from his way from meeting what used to his best friend. So guys it is up to us to make think work or surely we will go down to dogs.

    repondre message

    • 11 July 21:30, by Mohamed

      Very simple. Why the man who killed John Garang is living off the payrol of south sudan.
      Musevinis army gets 1 billion dollars a year from south sudan.
      Still nobody is aasking for Garang, s revenge.
      Shows how much respect he is getting from the people he fought all his life for.

      repondre message

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