South Sudan Admits to Financial Indiscipline, to setup Committee on Daily Expenditure

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South Sudan’s government said it’s reviving a system to allow it to take daily spending decisions as the oil-producing African nation battles an economic crisis caused by more than two years of civil war.

The country’s current funding position is “uncertain and volatile” and “revenues may fall short of focus and will fluctuate widely in the short term,” Finance Minister Stephen Dhieu Dau said in a statement published Tuesday in the Juba Monitor newspaper. “This situation calls for monthly, weekly and daily decisions on spending, borrowing and saving so that there are resources available to keep government functioning.”

The world’s newest nation saw inflation exceed 720 percent in August as it struggles with declines in oil revenue and the local currency. Conflict that began in December 2013 has left tens of thousands of people dead. Fighting between factions loyal to the president and his deputy in the capital, Juba, in July claimed hundreds more lives and forced the then-vice president to flee, throwing a peace agreement into turmoil.

The government last week approved a 22.3 billion South Sudanese pound (about $474.7 million) budget for the 2016-17 fiscal year with plans to fund it by external borrowing and sales of crude. As inflation rises, the sum may prove less effective than planned over the year, Cabinet Affairs Minister Martin Elia Lomuro told reporters on Sept. 30.

Southern Sudan first established a cash management committee in 2008, three years before the then-semi-autonomous territory gained independence from Sudan. It met daily for almost a year before lapsing, according to the statement.

Source: Bloomberg