The National Council of Ministers on Friday turned back a draft fiscal year 2024-2025 budget which was presented by Finance Minister Awow Daniel Chuang, and asked him to make some amendments.
Deputy Minister of Information Jacob Maiju Korok said the draft budget of more than 2.4 trillion South Sudanese pounds was rejected pending incorporation of inputs and priorities.
The budget is under theme of ‘accelerating economic recovery through sustained reforms by prioritizing agriculture as an engine of growth.’
It was first tabled at the economic cluster, where the finance minister projected that the annual national revenue will cover about SSP1.7 trillion of the fiscal year budget, while there would be a deficit of 742.9 billion.
“The main pillars of the budget theme are to support farmers through reasonable credit to be provided by the Agricultural Bank of South Sudan, allocation of 10 percent of the resources available to agriculture sector,” Korok told reporters.
Other priorities include investment in health and education, mining sector development to diversify sources of public financing, and fast-tracking effective reforms in public procurement and asset value added tax and property taxes.
Deputy Minister Korok did not specify the areas of amendment but added that Minister Awow is expected to return the budget for it to be passed by the cabinet.
“The budget was presented and it was deliberated on. So the decision actually was to advise the Minister to take the budget back to incorporate inputs and priorities and then brings it back to the cabinet again for deliberation and passing.”
The country is experiencing severe inflation as the national currency weakened against the US dollar after a major pipeline transporting 60 percent of the crude oil to Port Sudan broke down in February 2024.
The situation has left civil servants unpaid for months while triggering a sharp increase in commodity prices and leaving families struggling to feed themselves.
Korok said the financing and expenditures of the budget depend on three scenarios – the first of which is when oil production is fully operational.
The second scenario is when there is partial flow of oil and non-oil revenue as the main source of revenue, while the third scenario is when there is no oil revenue.
In scenario three, Korok said the government could be forced to rely on non-oil revenues and grants and loans, while adopting austerity measures for it to operate to bare minimum.
He said the cabinet suggested the second scenario, in which there must be tremendous cut in expenditure and the government will only pay salaries, wages and minimal expenditures.