Ngor cautions against borrowing from Central Bank                                                                                                               

Ngor cautions against borrowing from Central Bank                                                                                                               
Minister of Planning Dior Tong Ngor.

The Minister of Finance and Planning, Dier Tong Ngor cautioned the government against the tendency of borrowing money from the Central Bank to cover the budget deficit.

Ngor made the remarks on Thursday in response to the concerns raised by the finance and legal affairs committees during the second reading of the 2022/2023 fiscal budget.

He highlighted the challenges in meeting the SSP 1.3 trillion budget for the 2022/2023 financial year.

 “The resource envelop presented to you is only SSP 833 billion, and therefore we have deficit of SSP 560 billion,” he lamented.

He said the country could only mobilise 40 per cent of the resources, meaning there is a huge financial gap that needs to be filled.

“If we implement this budget and we are short of SSP 560 billion, we can take grants, but those things we don’t have in our hands.” We will be passing a budget that we only control 60% of and we don’t control the other 40%,” Ngor explained.

The sources of income to fund the fiscal budget were categorised into four-the oil revenue which takes SSP 715 billion, tax revenue takes SSP 117 billion while the deficit is SSP 560 billion.

However, the minister said it is very likely that the government might not raise the required loans due to unfavourable global economic environment.

 “Even if they give us grants, they will not implement it through our budget.”

“If we are to implement the budget the way it is. It would be for us to deficit finance through borrowing from the central bank and it would be disastrous if you go that route of just printing money and then closing this gap,” Ngor added.

Despite amendment made by the parliamentary committee of finance in non-oil revenue collections in the financial bill, Ngor said it will take the government some time to realise how much it will earn.

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