File Photo: EU Ambassador Timo Olkkonen during Eye Radio's Dawn Show | Photo by Moses Awan, 23/04/2024

The European Union Envoy to South Sudan has raised concerns about the absence of gold revenue in South Sudan’s national budget, despite reports suggesting the country may be producing 30 to 40 tons of gold annually.

Speaking at the opening of the National Constitution Review Commission workshop on fiscal federalism in Juba on Tuesday, November 19, Ambassador Tim Olkkonen emphasized the need for greater transparency in government financing.

Members of the National Constitution Review Commission are engaged in a workshop discussing the foundational concepts of fiscal federalism and South Sudan’s legal framework in this area.

The discussions will also cover key topics such as the allocation of revenue-raising and expenditure powers, the management of natural resources, revenue-sharing systems, and borrowing powers.

This four-day workshop, supported by the United Nations Mission in South Sudan and the Max Planck Foundation, is part of ongoing efforts to advance South Sudan’s constitution-making process.

In his address to the workshop, Ambassador Olkkonen underscored that fiscal federalism should establish a more equitable system for distributing resources, ensuring states and counties are adequately funded to serve their citizens.

He also expressed concern over the misalignment between oil revenue and expenditure, noting that oil spending does not follow the agreed-upon budget.

“Financing of the government should transparently take place and this has not been the case with revenue, particularly oil revenue, and oil expenditure which doesn’t follow the agreed budget,” Ambassador Olkkonen.

“I recently learnt that South Sudan probability produces around 30 – 40 tons of gold per year yet nothing of this is shown in the national budget,” he stated.

“Fiscal federalism should lead to a more equitable model of distributing revenue from country mineral resources and provide states and counties with the means they need for their services to their citizens and for paying for the cost of administration to run their affairs,” he said.

“It should empower different levels of governance to exercise the principles of subsidiarity and devolution, ensuring that governmental functions are carried out at the appropriate level where the people can best manage and direct their affairs, as the current interim constitution spells out,” he stated.

Ambassador Olkkonen emphasized that the Interim Constitution of South Sudan stipulates that ownership of petroleum and gas belongs to the people of South Sudan.

He pointed out that these resources are to be developed and managed by the national government on behalf of the citizens, ensuring that the benefits reach the people.

However, the Ambassador expressed concern that the current system is not functioning as intended.

“The Constitution also says that ownership of Petroleum and Gas shall be vested in the people of South Sudan and shall be developed and managed by the national government on behalf of the people and for the benefit of the people,” Ambassador Olkkonen.

“Unfortunately, we know today this system is dysfunctional,” he stated.

“I have been on several occasions told neither the community nor the local authority of the area producing oil has received the share of revenue that was allotted to them instead, the community has been struggling with negative consequences of oil production such as environmental pollution,” he said.