The Ministry of Finance and Planning has proposed a budget of 46.487 billion South Sudanese Pounds (SSP) for the fiscal year 2017-2018.
This was revealed at a meeting of the government and donors yesterday, where the Minister of Finance and Planning, Stephen Dhieu Dau presented a proposed budget to the donors, ahead of its presentation to the Transitional National Legislative Assembly (TNLA) for approval.
The resources required to finance the proposed 2017/2018 fiscal year budget is SSP 29.682 billion (191 million dollars), out of which only 7.4 billion SSP is available.
If presented to the parliament and approved, 62 percent of the budget will go for salaries of government employees, and transfers to the states.
Hon. Stephen Dhieu Dau said the new budget will be controlled strictly from day one, to ensure discipline and transparency.
However, the budget is expected to exceed available resources by SSP 16.8 billion (USD 108 million) to be provided by donor countries.
“On-going payments to Sudan for oil transit and payments to Nilepet for fuel subsidies means there is little oil money to finance government expenditure while other non-oil revenues are constrained by the economic and security situation in the country.
Dau said the proposed budget aims to spend without borrowing from the Central Bank to reduce the decline in the value of the South Sudanese Pound.
Dau said oil revenues are projected to increase to US dollars 821 million (SSP 127.2 billion) in 2017-2018, which is US dollars 152 million, higher than in the 2016-2017 budget. Despite the significant increase in oil revenues, the minister said much of the oil money will go to Sudan and Nilepet, the state oil company.
The oil revenue available to fund the 2017-2018 budget is estimated at USD 166 million because 20% of the gross oil revenue will be used to pay Sudan and Nilepet.
“Estimated payments to Sudan amount to US dollars 453 million (SSP 70.3 billion) in 2017-2018, as Sudan will take 28,000 barrels of oil per day in kind in lieu of cash payments of our TFA obligations,” he said.
Dau said if the price of fuel in the domestic market continues to be subsidised at 22 pounds per litre, Nilepet is expected to take USD 183 million (SSP28.3 billion).
He said non-oil revenue is expected to increase to SSP 11. 27 billion, 21% higher than the 2016-2017 budget. However, due to the depreciation of the local currency, the collection will fall by USD 34 million.