MONEY DEBATE: The big question after extension of peace deal
South Sudan could face an upheaval in financing reviewed peace agreement for the next two years.
Already, the international community that played a pivotal role in offering both material and moral support to the peace implementation have different thoughts when it comes to the extension. As things it stands, there is no clear evidence of commitment.
On Tuesday, the Troika countries comprising the United States, United Kingdom and Norway, and the European Union member countries called for transparency and accountability in public financial management reforms and government expenditure.
In the joint statement, the member countries loudly called for financial efficiency in the management of the oil and non-oil revenue to fund the peace agreement. Although they did not declare their support or withhold it, South Sudan may not take chances by hoping for the unknown.
Does South Sudan have enough?
In the 2022-2023 budget tabled by the former minister for finance and planning, Agak Achuil Lual, there is a screaming gap between the revenue of the financial year 2022/2023. Achuil had noted a gap of about SSP 832.8 billion, against the projected SSP 1.3 trillion budget.
This means that South Sudan would have to look elsewhere for the deficit.
“Madam Speaker, honourable members of the Reconstituted Transitional National Legislature, the projected revenue for FY 2022/2023 amounts to SSP 832.8 billion, while proposed spending stands at SSP 1.3 trillion. This means a gap of SSP 560 billion will be financed through borrowing and other sources,” Agak said.
What defines the country’s revenue woes more was a drop in the oil production from 156,000 barrels per day to 150,000 barrels per day due to depleted oil wells. He revealed that government receives an oil share of 44 per cent and the benchmark price of Dar Blend was projected at $75 per barrel.
The minister added that out of the total expenditure of SSP1.3 trillion, SSP15 billion was allocated for the implementation of the revitalised peace agreement, as the highest share went to wages and salaries, as SSP198.2 billion.
The big question is whether SSP15 billion will surely fund the necessary activities related to the peace agreement within the financial year without any support from donors and with piled debts which might make donors shy away from allowing the country to borrow.
The US withdraws support
In July 2022, the United States announced that it had withheld support towards peace monitoring bodies, the CTSAMVM and RJMEC.
This is a gesture that financial constraints would bar these bodies from monitoring significant violations of the peace agreement and gearing it on the right track.
The reason for withdrawal was crystal clear to be protracted implementation of the agreement, marred with insignificant delays.
The United States blamed the government of South Sudan for being unwilling to form a unified, professional military to protect civilians and journalists, and implement public financial management reforms.
“South Sudan’s leaders have not fully availed themselves of the support these monitoring mechanisms provide and have demonstrated a lack of political will necessary to implement critical reforms,” State Department spokesman Ned Price said in a statement.
However, the Washington administration promised to continue to provide about $1 billion in humanitarian and development aid and in support to the United Nations Mission in South Sudan (UNMISS), among another financial backing, the statement said.
Helper next door
In July 2022, the Chinese embassy announced its support to the peace CTSAMVM and RJMEC, as comfort from the hurting withdrawal of funding by the US government, according to Eye Radio.
“China has been supporting South Sudan’s peace process for years and is an important donor to RJMEC and CTSAM-VM,” the Chinese embassy said in a statement.
“We will continue our support in various ways to assist the implementation of the revitalized peace agreement including funding the RJMEC and CTSAM-VM as we always did.”
But as of now, there is yet to be a proper quantification of the support to ascertain whether the peace monitoring bodies would operate normally.