South Sudan halts civil servant pay amid dwindling oil revenue

JUBA – South Sudan’s government has suspended payments to civil servants and organized forces due to a sharp decline in oil revenue, the country’s finance minister, Awou Daniel Chuang, told parliament on Tuesday.

Oil exports, the war-torn nation’s main source of income, have decreased by 70%, Chuang said.

Non-oil tax collections, currently around 25-30 billion South Sudanese pounds (SSP) per month, are insufficient to cover the roughly 85 billion SSP monthly payroll, he explained.

“For us to have salaries every month, we should also depend on the National Revenue Authority (NRA),” Chuang said. “Salaries are around 85 billion SSP and what you are collecting is only 25 to 30 billion. So, to accumulate this, you need at least three or maybe four months for you to get one month’s salary.”

Chuang expressed optimism that improved efficiency within the NRA could double non-oil revenue collection.

He also highlighted plans to diversify the economy through investments in agriculture, livestock, and fisheries.

“That’s why we are unable to pay salaries because the revenue stream that comes from oil has been shortened by at least 70% and the other portion is allocated for road projects,” Chuang concluded.

The last salary payment for South Sudanese civil servants occurred in October last year, with Chuang offering assurances that the government would resume payments once resources allow.

Twic East Member of Parliament David De Dau questioned if the government’s financial woes signaled its potential collapse.

“With public employees not being paid for nearly eight months now, I wonder if this could be a declaration on the demise of the government,” he said.

Chuang’s remarks come amidst a significant depreciation of the South Sudanese pound (SSP) against foreign currencies like the U.S. dollar. Black market currency traders report exchange rates of 1 USD for 3,450 SSP.

The ongoing conflict in neighboring Sudan has disrupted oil transportation routes, with a pipeline station being vandalized in February. However, corruption is also widely seen as a major factor hindering South Sudan’s economic recovery.