1st October 2020
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Why gov’t struggles to pay civil servants

Author: Emmanuel Akile | Published: Friday, September 11, 2020

Salvatore Garang, former minister of finance and planning | Credit | Emmanuel Akile/Eye Radio

The Minister of Finance has told a parliamentary committee that the ministry only receives money from the sale of one cargo of crude oil per month.

Salvatore Garang claims this is the reason the government is unable to pay civil servants salaries on time.

A large crude carrier known as supertanker, on the average, can hold 2 million barrels or 84 million gallons of crude oil and petroleum products.

A crude oil tanker | Credit | Courtesy

It is used mainly in the Mediterranean Sea, the North Sea, and near West Africa, with an approximate capacity of 2,000,000 barrels of oil.

South Sudan transports its crude through the Red Sea from the Port of Sudan.

On Monday, global oil prices nosedived to its lowest since April’s historic oil price collapse.

The global benchmark Brent crude dropped to $42.04 per barrel for a fourth straight day.

Economists have attributed the drop to the coronavirus pandemic which has undermined energy demand worldwide, but especially in China.

China is the world’s largest importer of crude oil, using about 10 million barrels per day.

South Sudan is already facing its worst economic conditions because it gets much of its hard currency from oil sales.

The current production levels of the crude oil in South Sudan have dropped from 250,000 barrels to around 175,000 barrels per day.

“The ministry of finance is only given one cargo, which is 600,000 barrels and the cost now is below 30 per barrel,” Garang told members of the Assembly Business Committee on Thursday.

It is not clear whether this shipment is on a monthly or quarterly basis.

But Salvatore insists this is why civil servants are not receiving their salaries on time.

“We cannot meet the new salary structure and even the old one is now being augmented by overdrafts,” he added.

He also attributed the economic situation on mismanagement of non-oil revenues.

“The reason is that, there are a lot of taxes which are not coming to finance. We could afford to pay the salaries if the taxes were put in the treasury,” Garang added.

In July, the production in Upper Nile reduced from 130,000 barrels per day to 120,000 barrels per day and in Unity state, it dropped from 60,000 to 50,000 barrels per day.

Last year, the government used to receive over 5.5 million US dollars per day or more than 165 million dollars per month from selling crude oil.

But recently, the Central bank announced that is not able to stuff its foreign currency reserve due to scarce revenue from oil sales.

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