South Sudanese Finance Ministry suspends payments due to budget crisis

South Sudan’s Ministry of Finance and Planning took the unprecedented step of suspending payments to government spending agencies at the end of the 2023/2024 fiscal year on Sunday.

Since no new budget has been presented to Parliament, civil servants have not been paid for months, which is further exacerbating the economic crisis.

The country suffers from high inflation, which is exacerbated by the weakening of the national currency against the US dollar. The crisis was further exacerbated when a key oil pipeline carrying 60 percent of crude oil to Port Sudan collapsed in February 2024. Due to the sharp price increases, families can now barely afford basic necessities.

Malual Tap Dieu, First Under-Secretary of State for Finance, announced the suspension of payments under the Public Financial Management and Accountability Act (PFMAA-2011) of the Republic of South Sudan.

“As you are aware, the 2023-2024 fiscal year officially ends on June 30, 2024,” Mr Tap said in a press release. “Therefore, the Ministry of Finance and Planning hereby informs all spending authorities and the public that all payments are suspended until further notice.”

The ministry will not process any new applications until the 2024-2025 budget is adopted and legally approved by the Transitional Assembly. Meanwhile, South Sudan is lagging behind its partners in the East African Community (EAC) – Kenya, Tanzania, Uganda and Burundi – which have already submitted their annual budgets in accordance with an established regional tradition.

Finance Minister Awow Daniel Chuang recently unveiled a preliminary draft budget for the 2024/2025 fiscal year totaling SSP2.4 trillion. The government expects annual revenues to cover about SSP1.7 trillion of the budget, leaving a deficit of SSP742.9 billion. While details of the draft have not yet been announced, the finance minister stressed that 10 percent of the budget will be allocated to the agricultural sector, as he recognizes it as a key pillar of the economy.

As South Sudan grapples with economic challenges, citizens eagerly await further developments in budget negotiations and hope for stability in the coming months.