Oyet expresses concerns over worsening economic crisis

JUBA – South Sudan’s First Deputy Speaker of Parliament Oyet Nathaniel, on Monday expressed deep concerns over the country’s deteriorating economic situation, citing rampant inflation, food shortages, and the impact of external conflicts on oil production.

Speaking to reporters during a press conference held in Juba, Oyet who is also the deputy chairperson of the main armed opposition SPLM-IO emphasized that the government must take immediate and drastic measures to mitigate the economic crisis.

“We are working around the clock to ensure that we arrest the dire economic situation in the country. We know there is hunger. We know there is starvation now. We also know there is high inflation in the country. We know there is a shortage of food. We know there is a flood. We know the prices of basic goods have skyrocketed. Water, food, electricity, medicine and so on,” he said.

Oyet disclosed that the parliament recently summoned key ministers from the economic cluster of the revitalized transitional government to provide detailed reports on the status of the 2023-2024 budget execution. Among those summoned were the minister of finance, minister of petroleum, and officials from the national revenue authority.

According to Oyet, these presentations revealed the severe impact of the conflict in Sudan on South Sudan’s oil production, particularly at the Paloch oilfields, which suffered due to pipeline ruptures caused by the ongoing war in Sudan.

“From the presentations, we have noted that the war in Sudan affected the exploitation of oil in Paloch. Paloch, which generates significant output of oil production, has been affected because of the rupture of the pipelines. However, Tharjath oilfields in unity state continues to produce oil. We are made to understand that Tharjath continues to produce at least 30,000 barrels of oil per day. That is Nile blend,” he said.

Oyet said Nile Blend is a valuable brand of oil for South Sudan. He detailed that while the oil revenue for the current fiscal year is estimated at $538 million, it falls short of the $1.1 billion budget, leaving a significant deficit.

The press conference also highlighted the growing concerns over non-oil revenues. Oyet mentioned that South Sudan has managed to collect 45 billion SSP per month from non-oil revenues, which include market and customs collections.

Despite this, the overall financial situation remains precarious, with total collections from oil and non-oil revenues still insufficient to cover the national budget. Oyet pointed to the continued allocation of oil resources for road construction despite the country’s economic woes. He argued that this misallocation is exacerbating the crisis, as funds are diverted away from essential services like salaries for civil servants and security forces.

“The oil for roads continues to flow and continues to go for the roads despite the economic shock that the country got itself into. This is what is drawing and siphoning the resources from the government coffers. If the oil for roads was allowed to flow as it went for the financial year 2023-2024, we expected according to the allocated amount in the budget, the allocated amount stands at, in terms of dollars, an equivalent of $285,503,484,” he said.

“This is the allocation that was made for the roads, and you have to deduct that from the actual resources, the total of the non-oil and from the oil, which stands at $777.6 million. So, you will have at least, say, an equivalent of $492,114,595. So, this is the status of the economy. The hardship is coming because of the impact on the oil. Also, oil for roads has drained the coffers of the government. The government goes without salaries, without the budgeted operation, goods and services,” he added.

Oyet called on the government to review its priorities urgently by introducing austerity measures, downsizing expenditures and limiting non-essential trips abroad and more importantly to prioritize the payment of salaries to civil servants, teachers, nurses, and security personnel.

“Government priorities must be reviewed. Government also must introduce austerity measures to downsize its expenditures. Foreign missions, trips abroad, non-essential trips should be limited. Non-essential expenditure should be limited. Priorities should be given to the payment of salaries for the civil servants. The payment of salaries is payment for labor,” he said.

“And there is labor that is in the form of services, like the labor of a teacher to provide education to this country. The labor of a nurse provides medical services to this country. The labor of an engineer provides construction buildings and so on for this country. The payment of salaries to the organized forces and the military provides security services and defense for this country, provides law and order for this country. That should be the priority of the government. Roads, we can give them a lesser priority because people are dying of starvation.

“We have read reports in greater Pibor and other parts of this country, people are starving and dying. Who will walk on the roads? Who will move on these roads? Should people die, perish? Government must review its priorities. And the roads, we also need to review whether the money for roads is actually going for the roads. Should the money for roads not go for the roads, this money can be pursued back by the government and brought back to the coffers of the government so that it can meet government priorities and expenses,” he said.

He also questioned the transparency in the management of oil revenues, expressing concerns over the involvement of private companies in the collection and remittance of funds.

“We are aware that the National Revenue Authority has contracted a private company to facilitate the collection and remittance of money. But what we are concerned about, collections of revenue should be one way. You collect, you deposit, you don’t withdraw. The money must reach the ministry of finance, the treasury. That is where the money can be withdrawn from,” he said.

Oyet further urged the government to expedite discussions with Sudan to resume full oil production at Paloch and to reassess the oil-for-roads program, which he believes is diverting crucial resources away from the nation’s immediate needs.