South Sudan’s fiscal deficit exceeds budget projections, reaches 63%

JUBA – South Sudan’s fiscal deficit has swelled beyond expectations, reaching 63% of the 2024-2025 budget, a rise from the approved target of 46%, according to recent figures.

The National Assembly on Monday approved a budget of SSP 4.2 trillion, anticipating oil revenues of SSP 1.1 trillion and non-oil revenues also at SSP 1.1 trillion, resulting in a budget deficit of SSP 2.6 trillion.

Presenting the budget at its third reading, Michael Ayuen Johnson, Chairperson of the Standing Specialized Committee on Finance and Planning, outlined that oil and non-oil revenues are expected to fund roughly half of the budget, with the remainder addressed through various allocations and international obligations.

The National Assembly directed the Finance Ministry to clear membership arrears with several regional organizations, including $17.5 million to the East African Community (EAC), $683,333.66 to the Northern Corridor, $12.98 million to the Intergovernmental Authority on Development (IGAD), and $1.15 million to the International Conference on the Great Lakes Region (ICGLR).

In line with the approved budget, SSP 773.8 billion has been allocated to salaries and wages, while SSP 96 billion is earmarked for settling arrears to foreign missions.

Spending on goods and services will account for SSP 1.0 trillion, with capital expenditures receiving SSP 493.4 billion and the agricultural sector designated SSP 225.7 billion for ongoing and new projects.

Further, the budget assigns SSP 589.7 billion to mandatory expenditure, with SSP 303 billion planned for transfers to Sudan, states, and communities.

Debt servicing, including both principal and interest, is allocated SSP 286 million, while grants and transfers to states and administrative areas will take SSP 731 billion.

An additional SSP 173 billion has been set aside for a humanitarian emergency fund, and SSP 30 billion for the Constituency Development Fund.

For international obligations, SSP 108.4 billion has been budgeted, while SSP 93.7 billion is reserved for implementing the peace agreement.

Within this peace budget, SSP 10 billion is allocated to the National Transitional Committee, SSP 40 billion for Defense and Organized Forces Integration, and SSP 43 billion for the Reconstituted National Review Commission.

Sectoral allocations include SSP 8.6 billion for the Agricultural Bank of South Sudan and SSP 2.2 billion marked as a presidential donation.

The accountability sector has been allotted SSP 7.3 billion, while SSP 197 billion will go toward economic functions.

The education sector will receive SSP 225 billion, health SSP 54 billion, infrastructure development SSP 445.3 billion, and the natural resources sector SSP 65.4 billion.

The budget reflects South Sudan’s pressing economic needs and a continued struggle with fiscal challenges, as the government works to balance critical expenditures with a significant deficit.