South Sudan grapples with economic crisis delaying 2024/25 national budget reading
South Sudan has delayed its budget reading for the fiscal year 2024-2025 as the country grapples with an intense economic crisis worsened by the ongoing conflict in neighbouring Sudan. CNBC Africa spoke to Akol Dok, Managing Partner at Orus for more.
Thu, 18 Jul 2024 10:02:48 GMT
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AI Generated Summary
- South Sudan's economy heavily impacted by conflict in neighboring Sudan, leading to delays in oil exports and budget reading
- Government prioritizes agricultural projects in budget allocation to diversify economy and enhance food security
- Challenges in reducing government expenditures due to the size dictated by peace agreements, despite calls for budget cuts
South Sudan, a country struggling with an intense economic crisis exacerbated by the conflict in neighboring Sudan, has recently delayed its budget reading for the fiscal year 2024-2025. The delay comes as the country grapples with the impact of halted oil exports due to the conflict in Sudan, along with administrative issues within the government. To shed light on this unfolding situation, Akol Dok, Managing Partner at Orus, provided insights into the challenges facing South Sudan. The country heavily relies on oil exports for revenue, particularly from its major oil fields, which have been temporarily disrupted due to conflict-related issues and pipeline repairs. The Minister of Finance proposed an increase in funding for agricultural and livestock projects in the budget as a strategy to diversify the economy and improve food security within the nation. While the delay in the budget reading is attributed to administrative hurdles, a new Minister of Finance has been appointed and is currently working on finalizing the budget presentation. The initial budget proposed totaled around 2.4 trillion South Sudanese pounds, with a significant portion allocated to the agricultural sector. The government aims to support farmers and enhance economic development in agriculture by providing resources such as fuel, seeds, and equipment. In addition to agriculture, the budget also focuses on non-oil sectors like livestock, industries, and exports to stimulate growth and productivity. The allocations prioritize defense and security spending, as is customary in many countries, given the prevailing circumstances and peace agreements in place. The size of the government, attributed to peace agreements and power-sharing arrangements, presents a challenge in reducing expenditures, despite calls for cost-cutting measures. While the suspension of government spending has impacted suppliers and certain expenditures, particularly non-essential payments, efforts are underway to address these issues and ensure smooth budget implementation by the end of the month.
