Government to borrow $250 millions for budget deficit
The government of South Sudan has announced plans to borrow over two hundred million US dollars from the African Export and Import Bank to cover the country’s budget deficit.
Last week, the Economics Cluster in the unity government approved a 60-billions-Pound supplementary budget, in effect extending the fiscal year 2019/2020 budget.
The Cluster, headed up by Vice President Dr. James Wani Igga, approved the additional budget as the cost of running the revitalized government in the absence of a fiscal year budget.
According to the Deputy Minister of Agriculture and Food Security, the amount presented by the Ministry of Finance was based on projections of oil prices and tax collections.
But South Sudan has been struggling to raise enough money from the oil and non-oil revenue.
The current production levels of crude oil have dropped from 250,000 barrels per day to around 180,000 barrels per day.
Recently, the governor of the Central Bank Gamal Abdalla Wani admitted that the bank does not have enough foreign reserves as it used to as the South Sudanese Pound depreciated further against the US dollar.
Two weeks ago, President Salva Kiir instructed the Economic Cluster to proceed with the economic reform agenda, after the committee noted that taxes where being diverted into individual accounts.
To address the shortfall in its supplementary budget, the Economics Cluster has moved to request 250 million US dollars from African Exim Bank.
“In principle, the Afri-Exim Bank agreed to continue with the process of finalizing the loan provided that the government of South Sudan goes through the right procedure,” said Lily Albino, the Deputy Minister of Agriculture and a member of the Economics Cluster.
She told state-owned SSBC TV on Monday that the loan will cover losses created by the coronavirus pandemic.
“The Honorable Minister [of finance] also presented the priority of the government to be funded through this loan but most importantly it is to relieve the economy especially after the low growth that is brought about by COVID-19.”
“The loan facility also will make sure that the government will procure necessary supplies and also implement some very important infrastructural projects which will provide job opportunities for many of our youth, ” the deputy agriculture minister added.
In July, President Salva Kiir admitted that non-oil revenues are not being fully remitted into the single block account of the National Revenue Authority.
He said when collected and well managed, the non-oil revenue should be able to meet the government’s expenditure.
The president announced that the government will be exploring ways and means to speedily rectify the situation so that at the very least, it can pay monthly salaries on time.
Via Eye Radio