Economic hardship is due to failure to consider national interests, says Speaker Oyet
The First Deputy Speaker of the Transitional National Legislative Assembly (TNLA), Oyet Nathaniel Pierino on Wednesday said that the prevailing economic situation that has resulted in the depreciation of the South Sudanese Pound is largely due to “state capture” by few corrupt elites.
“The prevailing economic situation is man-made and self-inflicted. It is the failure to balance between the national interest of providing goods and services for the citizens and maintaining the state capture by private/group of individuals,” Pierino said in a statement issued in Juba.
“This is an “economic trap” in which, economic growth can’t be achieved or go beyond a certain level since this must affect the private income of those who control the economy and resources,” he added.
Pierino disclosed that the U.S dollars is controlled by individuals rather than by the government, adding that the country has lost control over its valuable resources from the lifting of crude oil to the use of the dollar income.
He revealed that “failure to execute the 2023/2024 Fiscal Year budget satisfactorily” is the failure to balance the interest between the state of South Sudan and the private entrepreneurs.
“This is why the economy is experiencing a running inflation. From the lifting of crude oil to the use of the dollar income, South Sudan has lost control over its valuable resources,” Pierino said.
Pierino also said that the oil revenue in the FY2022/2023 budget accrued to South Sudan (170,000 barrels per day, by 30 days and by 12 months) multiplied by the benchmark price of 81 U.S dollars give the Ministry of Finance 4.9572 billion USD a year, assuming that the Cost of Oil takes half of the Gross Oil Revenue, 2.4786 billion USD, shall be the Net Oil revenue while None Oil Revenue stood at 240 million dollars a year.
“The idea that South Sudan lacks resources is fiction. With speculation for elections, the situation is expected to worsen as most of the companies and individuals controlling the economy are directly or indirectly linked to the center of decision-making or influence in the country,” he said.
“The real issue is the management of the economy. The management is not by the Ministry of Finance but by the invisible hands and companies that are embedded in the economy. This is how devastating state capture can be, just in one sector,” Pierino said.
His statement comes in the aftermath of the government admitting on Tuesday that it is struggling to export crude oil to international markets due to a blockade imposed on the Red Sea by Houthi militants, who have been attacking cargo ships since January.
The Minister of Information, Communication, Technology, and Postal Services Michael Makuei Lueth said that cargo ships carrying crude oil shipments from Port Sudan are wary of the insecurity on the Red Sea, despite the current reduction in oil production levels in the northern oil fields due to flooding and the jelling within stations 4 and 5 of the oil pipeline.
He added that the current financial crisis largely originates from poor fiscal performance due to a lack of revenue diversification and dependence on oil proceeds, adding that the National Revenue Authority is fragile, vulnerable, and unable to increase tax proceeds.
“The combination of all these factors has seriously affected our resource envelope,” Makuei said. He added that the government is taking proactive measures to mobilized resources through streamlining collections, consolidating government finances, implementing public finance management reforms, and diversifying the economy.
