Home | News    Tuesday 26 August 2014

S. Sudan annual budget underfunds development projects

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August 25, 2014 (JUBA) – A large portion of South Sudan’s annual budget is spent on salaries and operational costs with very little on development projects, a local think tank said in a policy paper.

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South Sudanese finance minister Aggrey Tisa Sabuni speaks at an event in London on 2 October 2012 (Photo courtesy of ELSA London)

James Alic Garang, a senior economist at the Ebony Center for Strategic Studies authored the document critically examining the 2014/15 financial year budget.

The national parliament, early this month, passed the SSP 11.279 billion, up by 8% SSP 0.876 billion from the 2013/14 budget, which was SSP 10.403 billion.

The new budget, extensively discussed by lawmakers, saw many cuts and realignments. Grant financing, for instance, declined by 55% from SSP 350 million in the 2013/2014 financial year to SSP192 million this financial year.

Garang believes such cuts and realignments could have made significant impacts as key infrastructure project, citing the 192km Juba-Nimule road which benefited from grant financing in the past budget.

Net oil revenues were forecasted to increase by 31% to SSP 8.9 billion from SSP 6.8 billion in the period covering 2013 and 2014 budget, depending on the improvement of the security situation.

A number of new loans in the new budget include US$10 million World Bank for South Sudan health repaid results; $21 million World Bank for safety net and skills development; $80 million for South Sudan-East Africa regional trade and Development Facilitation Program; and $150 million China Exim Bank loan for Juba Airport.

As of this July, South Sudan’s debt position reportedly stood at SSP 7.8 billion, including interest payments. But fears have emerged from economists that obligation for all arrears might exceed SSP 10.0 billion. This level of indebtedness translates to 89% of the 2014/2015 financial year budget.

“This means that if the debt was to be paid in full during FY2014/2015, for every $100 that South Sudan earns, $89 would pay for the loans, while only $11 is left to cater for the national priorities,” noted the policy paper.

However, debt repayment is scheduled over several years, ranging between three (commercial terms) to 40 (concessional terms) years, it further adds.

According to Garang, little has been devoted to development and peace while two-thirds of the budget is allocated to salaries and operation cost, leaving only 22% for the states and counties where the bulk of our population dwells.

“This is a mismatch between government vision of developing rural South Sudan and spending priorities. Such priorities should have been in peace and reconstruction, social and humanitarian, spending to preserve key economic sectors and solve the capacity gap,” the economist said.

“Moreover, too much emphasis is put on oil production picking up and if this does not materialise, the outcome will be played differently, maybe taking more oil advance sales or taking unconsolidated loans as has been the case and these have negative consequences on the overall development of the country,” he added.

The new budget is on one hand an instrument for mortgaging the future of South Sudan and on the other a vehicle for reinforcing its fragile state, Garang said.

“It is unfortunate that salaries make up about 40% of the overall budget. A regional comparison tells that South Sudan is spending more on salaries in contradiction to the mantra taking towns to people in the rural areas,” he added.

(ST)

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  • 26 August 2014 08:22, by Son of Ngundeng

    Leaders of South Sudan confusing the citizen with bad calculation of South Sudan budget which have no sense, the airport was budgeting by the oil companies including CNPC. CNLC.SIPC.TRI OCEAN PETRONAS DPOC. SPOC.GNPOC. it was not a Leon Garang was lie to the public, after that they will put that money to their private accounts as they pay, i have witness that money when they payed to the CBOSS.

    repondre message

  • 26 August 2014 08:46, by Mr Point

    Why does Juba have so many very expensive cars being driven around on very bad roads?

    For national development the money should be spent on roads.

    But instead the money, somehow, seems to go to reward the top officials in the government.

    repondre message

  • 26 August 2014 09:25, by Mike Mike

    Presid: Kiir need to be careful on this issue of spending much of our income on salaries instead to give priority to the developmental projects.taking more loans also from those foreign companies will cause negative impact on our economic situation. To finished up your term with more debts left can later on challenge your leadership for not doing any thing to the pple of SS.

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    • 26 August 2014 16:01, by Bentiu Sudan

      World Foolish president Kiir has no intention to step down man. Stop talking about finishing his term. He does not know what kind of term you are talking about.

      repondre message

      • 26 August 2014 17:52, by thomas

        Exactly. As Africans, we have the examples of Museveni, Mugabe, Bashir, Deby, Aferweki, Guelleh, Jammeh, Obiang, Nguesso, Dos Santos, Nkurunziza nowadays, etc...

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  • 28 August 2014 09:10, by tootke’bai-ngo

    ONLY 8 MONTHS WAR COSTED BILLIONS. HOW MUCH DID OUR WAR WITH THE NORTH COSTED IN 22 YEARS? GOOD LUCK MY FELLOW CITIZENS, NEXT YEAR BUDGET PLUS DEBTS WILL BE TERRIBLY SCARY. PEOPLE OF SOUTH SUDAN NEED TO TALK ABOUT THIS MASSIVE BORROWING. OTHERWISE, WE WILL PAY BACK ALL THIS TILL WE GROW GREY HAIR AND THE FUTURE OF THE NEXT GENERATION IS DOOM AS THEY WILL ALSO BE PAYING KIIR’S DEBTS.

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