Budget Expenditures On The Rise In South Sudan: World Bank

Some of the luxurious vehicles used by government officials. The World Bank says without policy to reduce its very large public wage bill, South Sudan will find it difficult to fund capital expenditures. [Gurtong | File]

In its Economic Brief, the second in a series of briefs on economic policy, public expenditure management and current development challenges, the World Bank says,”Budget expenditures have been on the rise in South Sudan since the Comprehensive Peace Agreement (CPA), reaching levels that are quite in excess of those of its East African neighbours. The approved budget surged from SSP 3.4 billion in 2006 to SSP 5.9 billion after independence in 2011, almost a twofold increase.”

The Task Team Leader, Dr. Kimo Adiebo of the South Sudan World Bank said that the vast oil resources that fund almost entirely the expenditures that have allowed South Sudan to sustain public expenditure of more than US$ 300 per person, much higher than its neighbours.

Dr. Kimo says that the government Per capita current expenditures are comparatively large. He added that the note examines the extent to which oil resources that finances most public expenditure are productively used to address the huge development challenges of the country.

“The quality of leadership and economic management with respect to these issues will largely determine whether South Sudan will follow the path of those middle-income oil producing countries, such as Gabon, or Equatorial Guinea or Nigeria which have been unable to provide basic services to the majority of their population, or alternatively reflect the experience of those other African countries which in the last decade have seen remarkable progress in both economic growth and social indicators,” he said.

The report also cites the need for South Sudan to protect social expenditure and the non-oil economy from the high volatility in oil reserves and to achieve long term fiscal sustainability and adequate savings for future generation while allocating sufficient resources to meet development needs.

Nevertheless, the report continues to cite that in the early years of the CPA, the government spent a reasonable share on capital and that it has been declining since 2008.

From 25% in 2006, the capital declined to 17% in the first six months of 2012.
Dr. Kimo said that the declining trends in investment spending over the last four years were accelerated by the need to adopt austerity budget.

“Without policy to reduce its very large public wage bill, South Sudan will find it difficult to fund capital expenditures at satisfactory levels,” he said.

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