By Charles Lotara, SSMJ Juba, Wednesday (October 2, 2024) – In a crucial move to invigorate the mining industry and drive economic diversification, South Sudan's Ministry of Finance and Planning has allocated a record SSP 75 billion to the Ministry of Mining in the 2024/25 fiscal budget in a strategic shift which comes on the heels of a prolonged decline in oil production, largely impacted by the ongoing conflict in Sudan. The fiscal blueprint, presented to the Reconstituted Transitional N
By Charles Lotara, SSMJ
Juba, Wednesday (October 2, 2024) – In a crucial move to invigorate the mining industry and drive economic diversification, South Sudan's Ministry of Finance and Planning has allocated a record SSP 75 billion to the Ministry of Mining in the 2024/25 fiscal budget in a strategic shift which comes on the heels of a prolonged decline in oil production, largely impacted by the ongoing conflict in Sudan.
The fiscal blueprint, presented to the Reconstituted Transitional National Legislative Assembly by the Minister of Finance and Planning, Marial Dongrin Ater, signals the government's intent to shift focus from oil dependency to more sustainable sectors, with mining and agriculture being at the forefront.
Speaking to lawmakers during the presentation of the national budget for the 2024/25 fiscal year, Minister Dr. Dongrin Ater emphasized the government's determination to revitalize the mining sector as part of broader efforts to diversify the economy.
The Ministry of Mining has received an allocation of $166 million (SSP 75 billion), which is more than twice the amount it had previously requested to fund critical initiatives like the geological survey project that China's Geological Exploration Technology Institute is currently working on.
“I wish to emphasize the government's unwavering commitment to providing financial allocation to incentivize strategic investments in the mineral sector. In line with this objective, the government is dedicated to pursuing tangible reforms targeted at the mining industry to expand the revenue base and foster economic diversification,” dR. Dongrin told the assembly.
With oil production still stymied by regional unrest, the Ministry of Finance projects that non-oil revenue will be critical in sustaining the economy. As Dongrin outlined, half of the projected revenue for the next fiscal year is expected to come from non-oil sectors, with mining emerging as a key pillar in these projections.
The substantial increase in budget allocation comes after years of constrained funding for the Ministry of Mining, which previously stifled its capacity to execute key projects.
In the fiscal year 2023/24, the ministry received just $14 million—significantly less than the $25 million allocated in 2022/23. This reduction prompted the Ministry of Mining to voice strong concerns over its ability to carry out its mandate, particularly with respect to the systematic geological survey aimed at mapping the country’s mineral wealth.
In an interview with the South Sudan Mining Journal last year, Martin Gama Abucha, Minister of Mining, expressed his disappointment with the budget cuts.
“To be honest, we are seriously disappointed that this draft budget of 2023/2024 significantly reduces our budget from approximately $25 million in 2022/2023—which was equivalent to SSP 50 billion that year—to only $14 million this year, which is about SSP 14 billion," Abucha said.
He emphasized the significance of the geological survey by pointing out that the project's minimum cost of around $50 million exceeded the ministry's budget at the time.
The Institute of Social and Policy Research's analysis, which supports the minister, demonstrates that inadequate budget allocations to ministries in charge of production, such as mining, trade, and industry, starve the institutions of much-needed resources to spur economic growth.
However, the ministry now has the capacity to fund the $70 million geological survey that China's Jiangsu-based Geological Exploration Technology Institute is conducting, thanks to the new SSP 75 billion allocation.
The project aims to systematically map South Sudan’s mineral resources, a critical step toward unlocking the sector's vast potential. The geological mapping will not only identify commercially viable mineral deposits but also provide crucial data to attract further investment in the sector.
The shift in budget priorities comes as South Sudan’s oil-dependent economy continues to reel from the effects of reduced production. Oil, once the lifeblood of the nation's economy, has seen significant setbacks due to the ongoing conflict in neighboring Sudan, which has disrupted crucial infrastructure and supply chains.
Minister Dongrin stressed that, as the country faces challenges in resuming oil production, strategic investments in the mining sector are necessary to bolster the national revenue base.
“Of this [SSP 4.172 trillion], expected income from oil is SSP 1.138 trillion, while non-oil revenue is projected to be SSP 1.119 trillion, constituting 50 percent of the total revenue estimates,” he explained.
This budget marks the first time that non-oil sectors are expected to contribute such a significant portion of the country's revenue, signaling a transformative moment for South Sudan's economic policy.
The government's broader strategy to diversify its economy and lessen reliance on oil revenues is in line with South Sudan's renewed focus on the mining sector.
Dongrin presented the budget under the theme "To Accelerate Economic Recovery through Improving Livelihoods, Sustaining Peace, and Investing in Critical Social Services and Agriculture," highlighting the allocations made with an eye toward economic recovery and reform.
The finance minister reiterated the government’s commitment to long-term reforms that will enhance the sector’s contribution to the economy.
“The Draft National Budget for the new fiscal year outlines the government's projected annual spending in line with revenue estimates under the Appropriation Bill, which provides detailed guidelines for allocating the estimated revenues to key government priorities and other financial obligations,” Dongrin explained.
The SSP 75 billion allocation to mining underscores the South Sudanese government’s recognition of the sector’s potential to drive economic growth and diversification. After years of underfunding, this budget represents a significant step forward for the Ministry of Mining, which has long advocated for increased investment to realize the country's untapped mineral potential.