The Council of Ministers has passed the draft budget of more than 208 billion pounds for the fiscal year 2019/2020.
The fiscal year budget has a resource envelop of 130.7 billion pounds which the government spokesperson – Michael Makuei Lueth – says was based on projections of 77% of oil revenue and 23% non-oil revenue.
The draft budget of indicates that 57% was allocated for capital expenditure, 15% for operating expenses, 13 percent for salaries and wages and 9% has been allocated for state transfers.
However, the resource envelop of 130.7 billion and 208.156 billion pounds indicates a deficit of 77.4 billion pounds.
The Minister of Finance -last month -first presented a budget of about 200 billion South Sudanese Pounds -developed against the crude oil that will be produced during this Fiscal Year 2019/2020.
Much of the allocations were to go to infrastructure and road constructions.
Salvatore presented the first budget in form of two scenarios; Scenario number one; was a small budget SSP 134 billion, SSP 672 million, and the other option was SSP 208 billion, 155 million South Sudanese Pounds.
The cabinet opted for scenario number 2.
“This difference is what we call deficit. This deficit is about 77.4 billion pounds. It will be covered from other sources and these sources includes loans and donations from other sources,” Information Minister, Michael Makuei told the press after the council’s meeting in Juba.
Last year’s financial budget was over 81-billion-pounds which focused on clearing of arrears, including salaries and government obligations to international and regional bodies.
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It was also meant to “fund the peace process, security sector reform, infrastructure, education, water, health,” among others.
However, recent reports indicate that the government has not met its obligations to the East African Economic bloc, closed various foreign missions, and has not paid public servants for over 4 months.
The National Pre-Transitional Committee, charged with the implementation of the security sector and other mechanisms of the pre-transitional period has also not been able to meet its budget needs of $285 million.
Last year’s budget has not official been reviewed and accounted for.
Salvatore Garang is expected to present the 2019/2020 budget to the Transitional National Legislature for scrutiny.
In a report released on June 4th, the IMF recommended for an immediate need to restore fiscal discipline and strengthen oil revenue management and public financial management, while maintaining tight monetary conditions.
It says non-transparent oil advances, oil-backed loans, and off-budget transactions are undermining fiscal discipline and budgetary integrity, which have led to high corruption vulnerabilities.
As a result, the IMF stated in the report that South Sudan’s approved budget ceilings have become meaningless and non-binding.
It says although rising oil production is expected to raise government revenues, it will be insufficient to cover projected upfront peace-related costs.
The Minister of Finance and Economic Planning is expected to table the draft budget before the TNLA next week, for timely endorsement by the August house.
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