August 20, 2018 / 3:43 PM / 3 months ago

South Sudan plans public spending jump, with few details on funding

JUBA, Aug 20 (Reuters) - South Sudanese lawmakers approved a 75 percent increase in public spending in the 2018/2019 budget on Monday, though ministers did not spell out where the cash would come from in an economy ravaged by nearly five years of civil war.

Finance Minister Salvatore Garang Mabiordit told parliament that the planned budget of 81.6 billion South Sudanese pounds ($626 million) was “based on our own resources” - not on expected grants or loans from donors.

South Sudan’s only significant economic resource is oil, but fighting has forced operators to shut down many fields and output is less than half its pre-war level of 245,000 barrels per day.

Fighting broke out between troops loyal to President Salva Kiir and his former deputy turned rival Riek Machar in late 2013, less that three years after South Sudan declared independence from Sudan amid celebrations and promises of support from major world powers.

Earlier this month, Kiir granted an amnesty to rebels including Machar after a series of failed peace deals and broken ceasefires - and there have been no reports of major fighting since.

But the ethnically charged violence - which has killed tens of thousands of people and forced nearly four million to flee their homes, according to U.N. figures - has left the finances of the world’s youngest country in tatters.

Inflation has been in the triple digits at various stages during the conflict, with hyperinflation persisting for several years due in part to its depreciating currency.

The minister said 40 percent of approved spending would go on salaries, which he said previously up 50 percent of spending, without specifying when.

He did not say how much would be spent on the military and other security costs, typically the largest expenditure category, saying only that “peace is expensive” without giving details.

In the previous fiscal year, Mabiordit said, the country’s 400 MPs had each received loans from the government of $40,000 to buy cars. Such loans had not been included in this year’s budget, he said. (Writing by Maggie Fick Editing by Andrew Heavens)

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