Why we have no cash to pay salaries: Agak
The Minister of Finance and Planning, Agak Achuil Lual, has said the government does not have enough money ready to pay the salaries of its employees.
In a joint press address with the Governor of the Central Bank, Moses Makur Deng, the minister explained in detail why the national government has been struggling to pay salary arrears and why there seems not to be a reachable remedy soon.
“If I have to pay salaries, I have to borrow and when I borrow, that means that your oil is being sold in advance,” he said.
The two leaders were addressing the media after their return from participation in the World Bank-International Monetary Fund (IMF) Spring Meetings in Washington, D.C. Agak led South Sudan’s delegation to the meeting.
The meeting was focused on the World Economic Outlook in the wake of the war in Ukraine, global financial stability, fiscal monitoring and policy advice.
Agak fought off the notion that the government has not been appropriately using the oil money. He promised to pay the arrears for 2022 public servants’ salaries but maintained that it would take a lot of effort.
“It is not that the government is seating on the money and not paying arrears. I have instructed my people to prepare three months’ pay sheets for January, February, and March. Where am I going to get the money if the oil has been sold in advance up to 2027 and that means I will go to 2028 to request money from someone so that in 2028, the person will be given that oil,” Achuil stressed.
He further said that maintaining the five vice presidents, the generals in the hotels and trying to purchase vehicles for all the vice presidents needs money which had to be borrowed and repaid per the contract.
“Some of the proceeds from oil were going to repay the loans and that is why there are years of salary build-up because there are priorities over priorities and a lot of arrears were accumulated,” Achuil said.
The minister further said that when he assumed the office in November, he found huge arrears for four months beginning from July that had not been paid; which he cleared and that the only arrears are for January, February, and March.
“The reason why we are not paying the arrears is that part of the oil money is going towards repayment of loans and priorities of the government,” he said.
Achuil reiterated that the COVID-19 pandemic and the floods among other calamities brought the oil prices down to zero and his predecessors were selling the oil with the Ministry of Petroleum where one cargo was earning only $20 million or even less than that.
Achuil said the floods submerged three-quarters of South Sudan, in which the oil fields are located.
“That means the technology our people are using the Chinese technology, cannot get us the oil from all these floods. This means the production went down and when the production went down, we were almost getting nothing,” he stressed.
He added that at times South Sudan would get half a cargo by the end of the month and sometimes one cargo could be shared by the consortium that dug the oil out.
“When this comes, it is shared between these companies and the government. The government’s share at that time was very limited and doesn’t go as much as two cargo and that is the reason why people went to get pre-payment or loans from other financial institutions to keep the government running,” Achuil said.