By Charles Lotara, SSMJ Malakal, Monday (September 16, 2024) – The Upper Nile State government has unanimously suspended the Community Development Committees responsible for coordinating the payment of the 3% oil revenue shares meant for local development. In a letter addressed to the national Ministry of Finance and Planning, dated September 9, 2024, State Governor James Odhok Oyay ordered that communications pertaining to the oil share be channelled through his office. “ I am writi
By Charles Lotara, SSMJ
Malakal, Monday (September 16, 2024) – The Upper Nile State government has unanimously suspended the Community Development Committees responsible for coordinating the payment of the 3% oil revenue shares meant for local development.
In a letter addressed to the national Ministry of Finance and Planning, dated September 9, 2024, State Governor James Odhok Oyay ordered that communications pertaining to the oil share be channelled through his office.
“ I am writing to you in reference to the above-mentioned subject to inform your esteemed office that I suspend these CDCs of 3% of oil revenue from direct writing to your office, ”
he wrote in the statement obtained by the South Sudan Mining Journal.
“All those committees should write to the office of the governor, and then the office of the governor writes to your office."
It is unclear what compelled the gubernatorial move to suspend the committees, according to James Basha, minister of Information and Communication in Upper Nile State.
Over the past years, there have been contentions over the remittance of the oil revenue to the oil-producing states and communities.
In July 2023, the Reconstituted Transitional National Legislative Assembly directed the then Minister of Finance and Planning, Dier Tong Ngor, to suspend the transfers of the 3% oil share to Unity state until Community Development Committees (CDCs) are established.
Under the Petroleum Management Act 2013 , regions with active oil production, including Upper Nile State, are entitled to receive a share of the Net Petroleum Revenue.
According to Chapter 8, section 29 of the Act, the Ministry of Petroleum shall allocate shares of the Republic’s Petroleum Revenue to the petroleum-producing states and communities, which shall be paid out of the Consolidated Fund.
The Act provides that the oil-producing states shall receive 2% of the Net Petroleum Revenue, which shall be allocated to benefit the state development programs and shall be approved by the State Legislative Assembly.
Meanwhile, the local communities in the petroleum-producing states shall receive 3% of the Net Petroleum Revenue, which shall be allocated proportionally to the counties in the petroleum-producing states according to the following ratios in the ratios of 55% (to Petroleum Producing Counties in the state) and 45% (to Non-Petroleum Producing Counties in the State).
However, the allocation of the revenue shares has been marred by claims of misappropriation of funds. According to a 2018 report by the SUDD Institute, the shares were improperly allocated to the producing states and communities.
“The three per cent (3%) share of net petroleum revenues has not been properly allocated and transferred to petroleum-producing communities. The two per cent (2%) share of net petroleum revenues has been improperly allocated and transferred to the producing states,” the report partly read.
A 2021 report from the Auditor General details how beneficiaries of the 3% share of net oil revenue, which include Renk Community, Ruweng Administrative, Melut Community, and Maban Community received less than half of their revenue shares.
In a period spanning from 2014 to 2020, the Bank of South Sudan deposited $60.1 million to the 3% account. But audit report noted that $59.5 million was wired to individual bank accounts and private entities. A breakdown of the transactions shows that the four communities shared $1.9 million.