Articles (Opinion/Analysis)

R-ARCSS on Economic & Financial Management Reforms in South Sudan (Part 3) 

By Roger Alfred Yoron Modi, 27th November 2021

This Part Three of this article starts with some relevant most recent developments concerning reports of exemptions of some countries, by China, from debts; and South Sudan’s “assurances” to IMF on borrowing and transparency. The article then goes on to mention, for the benefit of the reader, the R-ARCSS provisions  on Public Expenditure; Borrowing and Public Finance Management, which are, in the Agreement, under the General Principles on RESOURCE, ECONOMIC AND FINANCIAL MANAGEMENT.

China’s State Council Information Office, China Daily reports, on Friday released a white paper titled “China and Africa in the New Era: A Partnership of Equals.”

The paper says China has announced an exemption from debt incurred in the form of interest-free Chinese government loans due to mature by the end of 2018.

“It will apply to Africa’s least developed countries, heavily indebted and poor countries, landlocked developing countries and small island developing countries that have diplomatic relations with China. During the Covid-19 pandemic, China cancelled the outstanding debts of 15 African countries in the form of interest-free loans that matured at the end of 2020,” the paper read in part,  highlighting that the “Foreign aid” from 2013 to 2018 totaled RMB270 billion, of which, 45 percent went to African countries in the form of grants, interest-free loans and concessional loans.

A Facebook page titled Chinese Embassy in South Sudan on Saturday posted part of the information, however, when asked whether South Sudan is included in the loans exemption, a reply from the page simply read “There is concessional loans in South Sudan.”

Well, the government of South Sudan does borrow from various sources. And South Sudanese deserve better, on all these, regarding transparency and accountability.

It is also worth recalling that the recent joint Troika statement by the US, UK and Norway on economic reform in South Sudan and the engagement the International Monetary Fund IMF reportedly had  recently with the government did welcome “assurances” that the government “will provide far greater transparency over revenues (including oil), spending, and on levels debt and public procurement.”

“The government knows the IMF can only support governments that deliver economic reform and that the IMF can only continue lending if the Government can prove it is using the assistance to pursue agreed reforms,”  the statement says “This means going beyond simply being accountable to the IMF for the use f resources lent by the Fund. The government needs to demonstrate clearly- to its own people- how much it contributes from its own resources and how those resources are being used to benefit the South Sudanese people.”

Here below are relevant provisions of the R-ARCSS under Chapter Four on RESOURCE, ECONOMIC AND FINANCIAL MANAGEMENT.

1-On Public Expenditure

That:

– The Revitalized Transitional Government of National Unity RTGoNU shall within three (3) months of the commencement of the Transitional Period:

-Establish effective public procurement and payroll systems, granting of public concessions, public borrowing and debt management in compliance with the law;

-Carry out an effective payroll cleansing exercise under public service reform;

-Adopt strict measures to control borrowing and to ensure that all borrowing is in accordance with the law;

-Review the implementation of Public Financial Management and Accountability Act, 2011;

-Assess and determine the level of public debt and ascertain the correctness in procedures used;

-Adopt strict macroeconomic coordination between the fiscal and monetary arms of the economy and by the Ministry of Finance and Economic Planning, and the Bank of South Sudan;

-Strictly enforce financial discipline in budgetary planning, constructing and executing;

-Establish a mechanism for safeguarding public assets. (See article 4.12 of the R-ARCSS). 

2-On Borrowing

That:

– The (Reconstituted) Transitional National Legislative Assembly TNLA shall by legislation prescribe the terms on which the RTGoNU and the States may borrow and impose reporting requirements;

– The RTGoNU and the States shall report financial and fiscal data to the relevant National Government bodies for statistical purposes;

– A State government may borrow with the approval of the State Legislative Assembly and in consultation with the National Government in accordance with the law;

– Any borrowing shall be negotiated through the National Ministry of Finance and Planning and the BoSS; and BoSS shall then guarantee such loans;

– Borrowing by any level of government shall be done in a manner that does not undermine national macroeconomic policies and shall be consistent with the objectives of maintaining external financial viability and debt sustainability. (See article 4.13. of the R-ARCSS).

3-On Public Finance Management

That:

-The RTGoNU shall ensure that government finances are managed responsibly and that budget execution is enforced in accordance with the law;

– The RTGoNU shall ensure that all its transactions are transparent and subject to auditing and oversight to promote accountability;

– The RTGoNU shall ensure that debts, arrears and prepayments will be audited, fully accounted for, responsibly managed and controlled. New debt and payables will be issued and undertaken in an open, transparent and responsible fashion and shall be contracted strictly in accordance with the law;

– The Ministry of Finance and Economic Planning shall identify all loans and contracts collateralized or guaranteed with oil, checked, and made publicly available for the purposes of transparency and accountability;

– The National Audit-Chamber shall audit and report on all public funds and financial dealings to relevant institutions generally and in particular to the Transitional National Legislative Assembly or to a State Assembly;

– The TNLA shall receive pending reports of the Audit Chamber within six (6) months of the start of the Transitional Period. Subsequent reports shall be received in accordance with the law.

– After receiving an audit report, the Transitional National Legislative Assembly and or the State Legislative Assembly, as the case may be, shall immediately debate and consider the report and take appropriate action;

– All revenues, expenditures, deficits, and debts of the RTGoNU shall be accounted for and the information shall be made accessible to the public. An annual report which details the RTGoNU financial activities shall be required by the Transitional National Legislative Assembly;

– The RTGoNU shall define and adhere to clear lines of authority, public disclosure requirements, and reporting channels amongst the Ministry of Finance and Planning, the Ministry of Petroleum, the Ministry of Mining, and the Bank of South Sudan, other line Ministries, and Transitional National Legislative Assembly in accordance with the law;

-The RTGoNU shall reform South Sudan’s existing economic and public sector financial management institutions, to ensure that public financial management of oil and non-oil revenues, the exchange rate, budgetary processes, procurement, management of payroll, public concessions, borrowing, debt and regulatory agencies are effective, transparent and accountable, free from corruption, compliant with international best practices and the laws of the Republic of South Sudan, and that resources are properly allocated and used for the benefit of the people of South Sudan. (See article 4.13. of the R-ARCSS).

While delays in implementing the R-ARCSS continue to be there, with various reasons being cited, dialogue, engagements and knowing what should and can be done at various levels as far as reform and the implementation of the agreement is concerned is important and a part of the peace process.  

Links:

https://radiotamazuj.org/en/news/article/opinion-r-arcss-on-economic-financial-management-reforms-in-south-sudan-part-3