21st June 2024
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Govt now depends on taxes after oil export crumbled: Chuang

Author: Obaj Okuj | Published: Tuesday, May 21, 2024

Finance Minister Awow Daniel Chuang addresses parliament. (-)

Finance Minister Awow Daniel Chuang told a parliamentary sitting on Tuesday that the government is unable to pay salaries due to lack of financial resources after oil export was disrupted by the Sudan conflict.

Chuang explained that the government relies solely on non-oil revenues collected from Nimule and Juba, as the government’s chief source of revenue has been severely impacted by the ongoing war in the north.

Speaking during a deliberation on the President’s speech, the minister highlighted that the delay and non-payment of salaries are due to the financial constraints.

Mr Chuang pointed out that the government currently depends on taxes collected by the Revenue Authority at border points and Juba.

He revealed that the payment of salaries to civil servants amounts to about 85 billion South Sudanese pounds, a sum he said is significantly larger than the available non-oil revenues.

“For us to have salaries every month, we should also depend on NRA. Salaries are around 85 billion SSP and what you are collecting is only 25 t0 30 billion,” he said.

“So, for you to accumulate this, you need at least three months or maybe four months for you to get one month salary.”

He said the states and administrative areas do not collect and remit revenues to the national government coffers.

“If we get the NRA functioning properly in all the other states, I think it can make it double. If it doubles, the next year, we can also improve on that, as we embark on other projects like agriculture, livestock and Fisheries.”

“So, that’s why we are unable to pay salary because the revenue stream that come from oil has been shortened by at least 70% and the other portion is allocated for road projects.”

Civil servants haven’t been paid for about seven months, now amid rising cost of leaving that leaves many families struggling to feed themselves.

The International Crisis Group said South Sudan’s economic woes could lead to multiple crisis including catastrophic hunger and political turmoil.

The national currency has continued to weaken drastically against the US dollar since the beginning of 2024, triggering a sharp increase in commodity prices.

The policy group said in a report published on Wednesday that the civil war in Sudan put South Sudan’s financial lifeline at risk, especially after one of the pipelines transporting 60% of its crude oil broke down in February 2024, and will require months of complex repairs.

Minister Chuang, however, assured the lawmakers that the Ministry will pay the salaries of public service employees as soon as resources are available.

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