Public Finances in South Sudan

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South Sudan's National Bureau of Statistics (NBS) estimated the country's nominal GDP at US $13.2 billion in 2010, giving it the fifth-largest East African economy and the highest GDP per capita in the region, at US $1,546. Kenya had the highest GDP in the region at US $31.4 billion, based on World Bank figures from 2010, but a lower per capita figure than South Sudan by virtue of a population roughly four times the size of its western neighbor.[1][2] South Sudan's 2010 GDP figures were thanks largely to oil and natural resource revenues; but the country has yet to transform these endowments into infrastructure and improved livelihoods, the World Bank blogged in August 2008.[3]

As a result of the oil revenue sharing deal with the North, gross national income (GNI is defined as GDP less net payments to the rest of the world) is much lower than GDP at US$984 per capita. But this is still significantly higher than any country in East Africa. Export of oil amounts to 71 percent of GDP, and oil revenue accounts for almost 98% of total Government revenue.[4]

As of June 2012, South Sudan was desperately in need of money, suffering from a lack of oil revenues since it shut down production in a dispute with Sudan in January of that year. The World Bank in May 2012 warned of possible "state collapse" if South Sudan runs out of foreign exchange reserves, which it said could be depleted by July.[5]

Ministry of Finance and Economic Planning

The World Bank wrote in December 2007 that the Government of South Sudan was establishing a system of public financial management virtually from scratch. The former Sudan People's Liberation Movement (SPLM) Secretariat of Finance, which managed resources of around $100,000, by 2007 had transformed itself into a Ministry of Finance and Economic Planning responsible for managing over one and a half billion dollars annually, including significant external financing.[6] A report by the Sudd Research Institute in May 2012 revealed that only 16 percent of South Sudan's national budget was reaching state governments, with 84 percent being spent by the federal government in Juba, the capital. The report, authored by Augustino Ting Mayai, the institute’s director of research, found that on average South Sudan’s states spend 97 million South Sudanese pounds (SSP) per year. The Ministry of Finance and Economic Planning, meanwhile, spends 348 million SSP annually. The Office of the President spends 159 million SSP, while the Ministry of Health, a service institution, spends only 68 million SSP. [7]

In April 2012, the Ministry of Finance and Economic Planning launched a campaign to increase revenue from non-oil sources. The campaign will see the ministry improve its tax collection systems to make it easier to conduct business.[8]

Corruption

According to a report by the South Sudanese auditor-general, over $1 billion in oil revenues were unaccounted for during 2005 and 2006, and there was no financial reporting of what happened to non-oil revenues that were collected in taxes by the national government or states for two consecutive years, Al Jazeera reported in June 2012. Billions more were feared missing between 2007 and 2011, and millions of dollars were also reportedly smuggled out of South Sudan in bags across borders to unknown destinations.[5]

In June 2012, Salva Kiir, South Sudan's president, accused current and former senior government officials of stealing at least $4 billion in state funds. He promised amnesty and confidentiality for any of the 75 accused officials who return the money they took, according to Al Jazeera, and said his government had set up a special bank account in Kenya where officials can deposit the embezzled funds.[5]

In May 2011, the government of the then semi-autonomous region of South Sudan on Tuesday said it would adopt electronic public finance management to seal graft avenues.[9]

References

  1. Release of first Gross Domestic Product (GDP) and Gross National Income (GNI) figures for South Sudan by the NBS, Republic of South Sudan - National Bureau of Statistics, 11 August 2011.
  2. South Sudan, The World Bank, Retrieved 25 July 2011.
  3. South Sudan launches its first GDP estimate, World Bank Blogs, 23 August 2011.
  4. South Sudan launches its first GDP estimate, World Bank Blog, 23 August 2011.
  5. 5.0 5.1 5.2 Can South Sudan combat corruption?, Al Jazeera, 6 June 2012.
  6. SUDAN Public Expenditure Review, Poverty Reduction and Economic Management Unit Africa Region, World Bank, December 2007.
  7. Only 16% of South Sudan’s budget reaches state governments - report, Sudan Tribune, 24 May 20012.
  8. South Sudan looking for non-oil revenue, Miraya FM, 26 April 2012.
  9. South Sudan launches electronic public finance management, Sudan Tribune', 31 May 2011.