Juba adopts austerity measures to survive oil shutdown

South Sudan has imposed 50-per cent cut on spending as it struggles to fill revenue gap created by the shutdown in oil production.

The cut affects all sectors except security, health, education and infrastructure, Information minister Barnaba Marial Benjamin said.

“Agencies will be given a monthly operating and capital spending limit for February equal to 50 per cent of their regular minute,” Dr Marial announced in Juba Monday.

But the minister said the salaries, which accounted for about half of the country’s annual budget, would not be affected, but that a minimal reduction would be imposed on block transfers to all the 10 states.

Mr Abraham Diing Akoi, the Economic Policy and Communication Officer at the ministry of Finance, said the cuts were to be effected immediately.

Compliance

At the same time, Mr Akoi said, the Ministry of Finance and Economic Planning was intensifying efforts to increase collection of non-oil revenue through enforcement of the Tax Act, 2009.

“Through increased compliance with the existing Business Profits Tax, Excise Tax, and Personal Income Tax, the ministry aims to triple non-oil revenue collection within six months,” Mr Akoi said.

“The cutbacks are effective immediately and will ensure that the necessary funds are available for the continued operation of the government and security forces. Everyone’s pay cheque is being maintained,” Finance and Economic Planning minister Kosti Manibe said in a Sunday statement.

Dr Marial said the 2012-2013 budget preparation would begin with a total spending of about $2.5 billion to cover the period from June to December this year.