corrected estimates tables

473 Pages·2016·6.26 MB·English

Draft Budget Tables
Fiscal Year 2016/17
Ministry of Finance and Planning
Republic of South Sudan

October 2016
TABLE OF CONTENTS
FOREWORD 1
NATIONAL BUDGET PLAN
I. Macro-Fiscal Developments 2
III. 2015/16 Budget Execution 10
III. 2016/17 Revenue Plan 15
IV. 2016/17 Expenditure Plan 19
V. Planned Expenditure Reforms 22
VI Donor Funding 24
VII. Financing plan and debt position 27
2016/17 Resource Envelope 30
REVENUE AND EXPENDITURE SUMMARY TABLES
2015/16 Approved Budget 31
2015/16 Mid Year Actuals 33
2016/17 Approved budget (by fund) 35
2016/17 Approved budget (all funds) 37
Expenditure Estimates by Expenditure Item 39
STAFFING LEVELS, SALARY SCALES AND
ALLOWANCES
Staffing Structure by Spending Agency 41
Salary Scales 43
Allowances 48
TRANSFERS TO STATES AND COUNTIES
RSS Transfers by Sector and Spending Agency 55
RSS Transfers by Location and Chapter 57
RSS Transfers Totals for All and Individual
Locations 61
ACCOUNTABILITY SECTOR 62
Anti-Corruption Commission 62
Audit Chamber 66
Finance & Economic Planning 70
Fiscal & Financial Allocation & Monitoring Commission 78
National Bureau of Statistics 81
National Revenue Authority 87
Reconstruction & Development Fund 90
Sector aid table 93
ECONOMIC SECTOR 94
Electricity & Dams 94
Electricity Corporation 99
Investment Authority 103
Irrigation & Water Resources 106
National Bureau of Standards 113
Ministry of Petroleum 116
Ministry of Mining 119
Petroleum & Gas Commission 123
Ministry of Information, Telecomm. & Postal Services 126
South Sudan Broadcasting Corporation 131
Media Authority 134
Access to Information Commission 137
Ministry of Trade, Investment & Industry 140
East African Community 146
Urban Water Corporation 149
National Communications Authority 152
Sector aid table 155
EDUCATION SECTOR 155
General Education & Instruction 156
Higher Education, Science & Technology 168
Sector aid table 175
HEALTH SECTOR 176
Drug and Food Control Authority 176
Health 180
HIV/Aids Commission 192
Sector aid table 196
INFRASTRUCTURE SECTOR 197
Housing & Physical Planning 197
Roads & Bridges 202
South Sudan Civil Aviation 207
South Sudan Roads Authority 212
Transport 216
Sector aid table 221
NATURAL RESOURCES AND RURAL SECTOR 222
Agricultural Bank of South Sudan 222
Ministry of Agriculture & Food Security 225
Ministry of Environment and Forestry 233
Land Commission 237
Livestock & Fisheries Industry 240
Ministry of Wildlife Conservation and Tourism 245
Sector aid table 252
PUBLIC ADMINISTRATION SECTOR 253
Ministry of Cabinet Affairs 253
Civil Service Commission 257
Council of States 260
Employees Justice Chamber 263
Ministry of Foreign Affairs 267
Ministry of Labour, Public Service & Human Resource Deve2lo7p1ment
Local Government Board 277
Ministry of Federal Affairs 281
Office of the President 285
National Constitution Review Commission 292
National Elections Commission 295
National Legislative Assembly 298
Parliamentary Affairs 301
Public Grievances Chamber 304
Northern Corridor Implementation Authority 307
Parliamentary Service Commission 310
Sector aid table 313
RULE OF LAW SECTOR 314
Bureau of Community Security & Small Arms 314
Commission for Refugees Affairs 318
Fire Brigade 321
Human Rights Commission 325
Interior Headquarters 329
Judiciary of South Sudan 333
Ministry of Justice 336
Law Review Commission 340
Police Service 343
Prisons Service 347
Sector aid table 352
SECURITY SECTOR 353
Ministry of Defence & Veteran Affairs 353
De-Mining Authority 367
Disarmament, Demobilization & Reintegration 371
National Security Service 375
Sector aid table 379
SOCIAL AND HUMANITARIAN AFFAIRS SECTOR 380
Ministry of Culture, Youth & Sports 380
Ministry of Gender, Child & Social Welfare 384
Ministry of Humanitarian Affairs & Disaster Management 388
Peace Commission 391
Relief & Rehabilitation Commission 395
War Disabled, Widows & Orphans Commission 399
Sector aid table 403
ANNEX
Transfers to States by Sector 404
Foreword
Budget execution last financial year was extremely challenging. Falling global oil prices
significantly reduced government revenues, as well as our Gross National Income. We did
not have sufficient revenues to execute all our budgeted expenditures, and had to contract
loans from the Bank of South Sudan and take advances from oil companies in order to
guarantee payment of salaries and state transfers. Borrowing from the Bank of South Sudan
weakened our macro-economic position by increasing inflation and exchange rate
depreciation. Inflation has now reached crisis levels, with normal people struggling to afford
basic goods such as food. Something has to be done to address this crisis.
The 2016/17 Budget provides the first step to stabilising the economy and creating an
environment that will set South Sudan on a path to recovery. This Budget contains significant
real reductions in government expenditure, in an attempt to reduce inflation and restore
confidence in the ability of the Government to execute its budget. It will be accompanied by
stringent cash management procedures, to ensure that we do not spend beyond our means.
In the event that there are insufficient funds to execute all budgeted expenditures, we will
prioritise our payments to ensure that salaries are paid, states receive their transfers and we
service our outstanding debts.
Alongside this Budget, I will be implementing the Government’s Fiscal Stabilisation Measures
Action Plan. This includes various measures that will reduce government expenditure,
increase government revenues, and improve cash management. Many of the measures are
included in The Financial Bill 2016/17 and the Taxation Amendment Bill 2016/17, which will
be laid before the Assembly alongside this budget.
It is important that we as a Government regain our fiscal credibility and steer our finances
onto a sustainable path. I call on all of my colleagues in Government and the Assembly to join
the struggle to stabilise our economy, end the evil of runaway inflation, and lay the
foundations for a sustainable recovery in South Sudan. Only through sustained peace and
growth will we be able to provide the services and livelihoods that our people deserve.
Achieving both will require a conscious and sustained effort. But it will be worth it in the long
run. And I hope that the Budget that I present to you here will be a first step in that process.

Stephen Dhieu Dau
Minister
Ministry of Finance and Planning

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National Budget Plan
I. Macro-Fiscal Developments
The current macroeconomic environment in South Sudan poses huge difficulties. The global
crash in oil prices combined with ongoing threats to security have resulted in a large decline
in South Sudan’s Gross National Income (GNI). The Ministry of Finance and Planning estimate
that South Sudan’s GNI per capita in US dollars has fallen by around 70% since independence.
Year on year inflation was around 730% for August 2016, and the pound has lost close to 80%
of its value against the US dollar over the year to August.
Chart 1: South Sudan Inflation
Annual Inflation Monthly Inflation
800 89
700
600 69
Monthly (Right Side)
500
49
400 Through The Year (Left Side)
300
29
200
100
9
0
Aug-14 Feb-15 Aug-15 Feb-16 Aug-16
-100 -11

Key figures for 2015/16
Q1 Q2 Q3 Q4

CPI Inflation (quarter / annual average) 25% 23% 56% 215%
CPI inflation (end of period) 21% 17% 68% 71%
Parralel Exchange Rate (average) 14.48 17.98 32.62 46.35
Official Exchange Rate (average) 2.96 5.34 24.38 38.63
Monthly Average Oil production (mbls) 4.92 4.78 4.47 3.78
Average Price of Brent Blend (USD/b) 40.74 32.19 19.20 38.64

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Annual
Q1 Q2 Q3 Q4 (2015-16)
CPI Inflation
(quarter / annual average) 25% 23% 56% 215% 173%
CPI inflation (end of period) 21% 17% 68% 71% 328%
Parallel Exchange Rate
(average) 14.48 17.98 32.62 46.35 25.73
Official Exchange Rate
(average) 2.96 5.34 24.38 38.63 16.73
Monthly Average Oil
production (mbls) 4.92 4.78 4.47 3.78 4.48
Average Price of Brent
Blend (USD/b) 40.74 32.19 19.20 38.64 32.69

The first of a series of shocks occurred in 2012, when oil production was shut down. The
second shock was at the end of 2013, when the civil war broke out, disrupting oil and
agricultural production. In order to cope with these two crises and maintain expenditure
levels, government savings and reserves were exhausted, and substantial loans were
incurred. While these actions stabilised the economy for some time, they left the country
with a diminished ability to take countercyclical action or withstand further negative shocks.
When the oil price fell further from July 2015 onwards, the country was already experiencing
high inflation and depreciation, and had no reserves or savings available to support
government spending or defend the pound. This meant the fixed exchange rate regime
became increasingly untenable and distortive, and so the currency was floated in December
2015 in order to help deal with the ensuing crisis.

The execution of the 2015/16 budget is best understood within this context. That is, the
significant fall in oil price through the year and the subsequent floating of the exchange rate.
In addition to this, there was an increase in salaries for government employees in response
to rising prices and the depreciation of the exchange rate. But these factors should not
distract from the fact that uncontrolled expenditure, once again, was a significant negative
factor that undermined budget execution. The uncontrolled expenditure contributed further
to the inflation through excess borrowing from the Bank of South Sudan, as the long run
trend of overspending by a number of spending agencies continued despite the worsening
macroeconomic environment. The headline figures for the 2015-16 Budget Execution are
presented in Tables 1. Key points are:
 Gross oil revenues in USD terms fell far short of budgeted levels, as the oil price was
below the forecast of $50 per barrel for the majority of the fiscal year (August to June),

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averaging just $35. However, in SSP terms, the realignment and floating of the
exchange rate resulted in gross oil revenues above budget projections;
 Net oil revenues were similarly above projections, though primarily because payments
were not made in full to Sudan and oil producing states and communities. Unbudgeted
payments to Nilepet reduced net oil revenue, as did the payment of arrears to Sudan
for the previous financial year.
 Government expenditures were well over budget – in part because depreciation
increased the SSP value of dollar-denominated Government expenditures. Inflation
severely eroded the real value of the salaries of Government employees and so, in
response, the Government introduced a new unified payscale, increasing base salaries
for most Government employees. The first stage, which affected staff on lower grades
only, was implemented for all salary payments from February onwards. The second
and third stages, for staff on higher grades, were not implemented during the fiscal
year 2015/16.
The immediate and marked impact on increasing non-oil revenues can be seen in Chart 2;
nominal non-oil revenues increased from SSP 98 million in December to SSP 309 million in
February. Non-oil revenue collection was over SSP 4 billion in 2015/16, which was SSP 2.5
billion higher than the previous fiscal year. Although the realignment reversed the downward
trend in non-oil revenues, the increase in real terms has been limited to date. While non-oil
revenues increased considerably compared to the previous fiscal year, most non-oil revenue
lines remained below budgeted levels, due to the unrealistic adjustments made to the
forecasts by the NLA during the passage of the 2015/16 Budget. Net oil revenues were more
than USD 100 million below budget, despite non-payment and the further accumulation of
arrears to Sudan.

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SSP millions Chart 2: Non-oil Revenues SSP millions
700 700
600 600
Non-oil Revenue (nominal)
500 500
400 Non-oil revenue (real) 400
300 300
200 200
100 100
0 0
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16
The depreciation of the exchange rate has led to both gross and net oil revenues exceeding
budgeted levels (in SSP), with net oil revenues SSP 6 billion above budget, despite both
production and USD price being below Budget forecasts.
Chart 3: Oil Production and Revenues
Millions of Barrels Millions USD per
per Month month
8 400
Total Production (Left Axis)
7 350
Value of Gvt Entitlement (Right Axis)
6 300
5 250
4 200
3 150
2 100
1 50
0 0
Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16
Floating the exchange rate greatly increased the SSP value of government revenues and may
have alleviated inflationary pressure had spending levels been controlled more stringently.
However, because USD expenditure remained high due to the unbudgeted spending of a
number of spending agencies, the positive effects of the reform were somewhat muted. In
addition, the fall in the price of oil reduced the supply of foreign currency to the market,
causing the SSP to depreciate further. As such, the increase in non-oil revenues was not
sufficient to substantially close the budget deficit, or compensate for the loss of foreign
exchange caused by the sustained and drastic fall in oil revenues (Chart 3).
This meant inflation and depreciation accelerated from the beginning of 2016, with average
month-on-month inflation during the second half of the fiscal year of 19.3%, up from an

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average of 6.3% in the first half of the fiscal year. The exchange rate depreciated severely,
rising from SSP 18.8 to 1 US dollar at the end of December to SSP 45.3 to 1 US dollar by the
end of the fiscal year (Chart 4). The situation has worsened since.
USD/SSP Chart 4: Exchange Rates USD / SSP
50 50
45 45
Parallel Exchange Rate
40 40
35 35
Official Exchange Rate
30 30
25 25
20 20
15 15
10 10
5 5
0 0
Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Mar-16
Having exhausted savings, reserves, and opportunities for external borrowing, and with little
in the way of expenditure reduction measures implemented, Government borrowed further
from the Bank of South Sudan. New borrowing from the central bank totalling SSP 5,563
million was incurred over the fiscal year, which accelerated inflation further. Net financing
was more than double what was budgeted for 2015/16. In part, this also stemmed from
dollar denominated borrowing, such as oil advance sales, having a higher SSP value following
depreciation. In future, financing this large debt burden given the macroeconomic situation
will be challenging, and will require expenditure reductions and revenue increases.
Financing budgeted expenditure proved challenging throughout the year. There were delays
in executing salary and transfer payments, and June salary and transfer payments were
deferred to 2016/17. Arrears continued to accumulate through the year, and it was not
possible to honour the 2012 Cooperation Agreement and make full oil payments to Sudan
during 2015/16. Domestic arrears and liabilities to Sudan are additional to the formal debts
shown in Chart 5.

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