November 29, 2016 (JUBA) - The South Sudanese government has unveiled measures aimed at closing gaps created by drops in the production of oil resources.
- An oil field in South Sudan’s Unity State. (Photo: UN / Tim McKulka)
South Sudan’s economy is currently in dire straits as the local currency, South Sudan Pound has fallen by over 50% and revenue generated from oil, the mainstay of foreign earnings, is at its lowest in the past years, leading to macroeconomic spillovers and consequent quest for economic diversification.
Unveiling the strategies seeking to close the gap, the country’s deputy finance minister, Mary Jervas Yak, said the government wants to generate non-oil revenues and that revenue collected would be used to fund larger parts of the national budget.
"While oil may be our biggest source of revenue, looking at the current economic situation, it may be wise to explore other options," explained the deputy minister.
Yak, however, said situation in the war-torn nation required her institution to raise the bar by deepening and expanding its tax collection drive through an aggressive tax system, considering the dwindling revenue profile as a result of the drop in oil prices.
"In the meantime, funds looted and stashed in foreign accounts should be recovered by the government. These stolen monies run in billions of dollars, which is enough to sustain an economy for a couple of years," she stressed.
According to the deputy finance minister, President Salva Kiir has written to some western countries asking their involvement to help trace the money and return stolen assets stashed in foreign banks, adding that in order to accrue revenue from non-oil sectors, the government needs to tackle electricity issues throughout the country.
"This will help attract global investments for massive industrialisation, which will subsequently increase our internally generated revenue," explained the official.
The minister said government would revamp and carry out major reforms in education and health care systems so that tertiary institutions will churn out graduates who are employers of labour and not go abroad for better opportunities.
If the health system is revamped, the official emphasized, worthy services will be rendered to the citizens and the productive capacity of human resources will be optimised thus increasing life expectancy.
"Similarly, good road infrastructure should be built and existing ones properly maintained to facilitate inter-state commerce and mobility," she added.
Speaking at the non-oil revenue collection management workshop in progress in Juba, a Japanese official said it was time the government should work hard to improve its tax collection system to generate more non-oil revenues.
Higeru Hamano, a Japan’s embassy representative at the workshop on non-oil revenue collection, said tax was a very authentic source of government revenues.
“Revenue is a gift for the government and that is why Japan thinks that South Sudanese Government needs to improve its tax system to help South Sudan build its social infrastructure and deliver various social services,” Hamano said on Monday.
“The Government must be accountable to its citizens and such accountability must be exercised through effective parliamentary control. Every minister at the state level is accountable to parliament.”
The training was organized by the Ministry of Finance and Economic Planning in collaboration with United Nations Development Program and Government of Japan.
The resident representative for the UNDP, Eugene Owusu said they were helping in building a strategic financial management system for government institutions.
He pledged readiness to engage stakeholders from the private sector, development partners and the civil society.
“We’d like to build partnership not only the government and state authorities at the local level, but also seek the engagement of the private sector, civil society organizations and development partners,” said Owusu.
“As UNDP, we will continue to provide strategic policy advisory support to the state Government financial management system, we will support budgeting and development planning if we are to succeed in building a transparent financial management system at the state levels which I insist will lessen South Sudan’s reliance financial deficits and South Sudan’s dependency on aid and donor support in a step by step progressive manner," he added.