Minerals are sources of wealth.
Asian economic giants attribute their wealth to massive natural resources which they exploit and use to develop their countries.
However, this is not the case for South Sudan where hunger, insecurity, poor healthcare systems, dilapidated infrastructure, among other social problems continue to be reported despite the country boasting of massive oil fields.
Humanitarian aid has become a key lifeline to the vast rural population which continue to report cases of starvation, in the face of glaring revenue leakages leading to loss of funds which would be utilised in service provision to these citizens.
For several months, this writer, through personal experiences and engaging citizens, businesspeople and other stakeholders, unearthed various schemes used by government officials to beat the systems.
There are claims that government officers including soldiers are into other income-generating ventures including selling charcoal and firewood for upkeep as salary delays are reported due to revenue shortages to sort out salaries and other government services.
Pundits attribute this problem to poor leadership which has failed to tap into the revenue from huge potential to transform the lives of citizens.
A source who sought anonymity due to safety concerns claimed corruption and poor revenue collection structures have seen many powerful individuals evade taxes, while much of the revenue collected through taxes do not get to the government coffers.
But What Exactly is the Problem?
The poor revenue collection structure can be witnessed in the manner in which this is handled.
Business premises are not new to raids by various government agencies such as the garbage collection team from the city council; the city councils, the police, organized forces, fire brigade, and wildlife.
The source claimed that even the country’s main revenue collection agency, South Sudan Revenue Authority (SSRA) is part of the mess, with some officers issuing fake receipts to conceal their schemes.
“Things are very expensive. This paper (Ruksa) is very expensive. The big one is seven thousand South Sudanese Pounds (SSP), and the small one is five thousand. Can twelve thousand be given to them in one day? They take this every day. This money cannot be reported, it will just be eaten here,” says a motorcycle (boda boda) rider in Maban.
Mayik (not real name), a businessman in Malakal says they are forced to pay more and what is recorded on the receipt is different from the amount you pay.
Luka Away Nyebil, Upper Nile State’s Director-General of Trade and Industry says some counties do not pay taxes.
“What makes the situation more difficult is the fact that some of these areas are controlled by SPLA-IO forces and so they collect taxes for their operations and do not report to anyone apart from their generals for their daily operations because they are not on the government payroll,” says Nyebil.
Sudan People’s Liberation Movement-in-Opposition (abbreviated SPLM–IO), also known as the anti-governmental forces (AGF) is a political movement in South Sudan.
“But we are still waiting for the government to solve the issue of two forces, who will really manage the affected areas because the opposition forces are only there for the tax collection,” says Gabriel Oluoch, Relief and Rehabilitation Commission (RRC) Coordinator in Upper Nile State’s Panyikang County.
Extortion at checkpoints
In our undercover investigations, this writer witnessed numerous roadblocks collect taxes from motorists in guise of security checks.
For instance, between Malakal and Paloich, there are about eight checkpoints where vehicles are stopped by forces and they pay money before being allowed to proceed.
There are also more than 10 checkpoints along the Juba-Nimule highway that collect numerous taxes.
Other checkpoints are found along rivers such as the Nile and Sobat, and they charge taxes on goods transported from Juba to Upper Nile State by water.
Mr Nyebil says most people who collect taxes on the river transported goods are doing so illegally.
Nyebil explains that illegal money collectors on waterways carry out their activities with impunity, and armed.
He says most of the people in areas like Nasir, Tonga, and Maiwut are still armed and are hard to approach if they are to be stopped from illegal taxation and compelled to remit the taxes collected to the state and national government.
On 24th June 2024, a circular from the South Sudan Revenue Authority accused non-governmental organizations of evading tax through collaboration with powerful individuals.
Also, there have been allegations of serious extortion at airports in South Sudan, and double taxation of air cargo. However, the government has over the years denied this.
A businessman who prefers anonymity says the levy charged on items he buys in Kenya is little compared to what is charged at Juba International Airport.
The high taxation is evident in an air ticket from Malakal to Juba with Cush Air which costs $120, and out of this, $70 is tax.
Weak institutions
Earlier this year, Minister of Cabinet Affairs, Dr Martin Elia Lomuro admitted to the press in Juba that South Sudan had a weak system of tax collection.
“Conventional way of collecting taxes is that you bring goods, you go and pay to the bank. There is nothing called exemption, there is nothing called paying cash to an individual, you don’t see the money. Money goes straight to the bank account. But that system is not in place,” Dr. Lomuro explained.
He said big hotels in Juba do not pay value-added taxes that should either be 18 or 20 percent, claimed reaffirmed by Lino Mayik (not real name), a former employee of the South Sudan Revenue Authority (SSRA).
He adds that big hotels have army generals attached to them, who intervene to stop SSRA staff when they approach these facilities to enforce tax payments.
To Lino, the refusal to pay taxes is affecting the country’s economy, adding that relying only on oil income is not sustainable.
Michael Makuei, the government’s spokesperson has previously claimed that some business people are the ones who raise the dollar exchange rates at will to suit their personal interests.
“There are certain groups of people who are here in South Sudan whose duty is to make sure that they raise the dollar. And these are the big merchants and business people so that they gain more,” he said.
Blatant theft
On September 23, 2021, the United Nations Human Rights Commission published an article accusing South Sudan’s leaders of diverting huge amounts of money from public coffers into their bank accounts. The United Nations Human Rights Commission said this was a grave violation of human rights.
The commission stated that $73 million USD had been diverted since 2018 and other transactions amounting to $39 million USD within less than two months.
This looting narrative by the United Nations Human Rights Commission concurred with the statement of President Salva Kiir Mayardit that some government officials had stolen $4 billion back in 2012.
The commission however noted that the diversion of revenue is a contributing factor to economic, social, and cultural issues affecting the citizens. It said that the same misuse of funds contributes to conflict, violations, and other heightened crimes.
“The commission’s documentation of the corruption, embezzlement, bribery, and misappropriation of state funds by political elites is merely the tip of the iceberg,” the chairperson of the commission Yasmin Sooka stated.
The commission further cited non-transparent contract payments, procurements, and illicit revenue operations diverting non-oil revenues.
It for example pointed out a payment that was made in May 2018 by the Ministry of Finance and Planning to a famous Sudanese businessman. According to the commission, the amount was 21.6 percent of the 2018/2019 Financial Year budget.
In September 2024, the chairperson of South Sudan’s Transitional National Legislative Assembly (TNLA) Changkuoth Bichiok said the monthly collections of oil and non-oil revenues exceeded monthly salaries.
He stated that Nile Blend Crude Oil brings 44 to 47 million dollars monthly whereas the South Sudan Revenue Authority (SSRA) collects SSP 40 billion monthly including taxes and non-taxes.
He says this amount collected by the National Revenue Authority is equivalent to half of salaries and wages if these revenues are deposited directly to the government’s single treasury account.
“This implies that both SSRA collections and Nile Blend Crude Oil are sufficient to pay the entire wage bill monthly and cater for keeping the government operational and slowly clear the entire government salaries and the foreign missions’ arrears that accumulated for almost 10 months,” Bichiok says.
Sources say the state governments remain operational even without support from the national government budget because they do not report their finances to the national government.
They say taxes such as personal income tax have always gone to the personal pockets of the state governors.
According to the East African Community Comparative Report 2022/23 published in January 2024, South Sudan had an unclear economic performance that does not reflect the truth on the ground. (EAC_Comparative_report_2022-23.pdf)
Growth Domestic Product
Records from East African evenue Authorities showed that South Sudan’s real GDP growth increased from 5.3 per cent in the Financial Year 2021/22 to 6.6 per cent in the Financial Year 2022/23.
The same report indicated that Burundi’s increased from 3.6 per cent to 5.8 per cent, Rwanda from 5.8 per cent to 8.1 per cent, Tanzania from 4.7 per cent to 5.2 per cent, Uganda from 4.7 per cent to 5.3 per cent, while Kenya recorded a drop from from 6.2 per cent to 5.2 per cent within the same year.
According to the data, Burundi had volatile macroeconomic issues in the year 2022/23 leading to an increase in the inflation rate from 12.5 per cent to 26.1 per cent, while Rwanda’s macroeconomic performance was not constant with inflation shooting up from 7.1% in Financial Year 2022/23.
In Kenya, inflation shot up from 6.9 per cent in 2021/22 to 7.6 per cent in 2022/23 while Tanzania was stable with increased inflation from 4.1 per cent in 2021/22 to 4.6 per cent in 2022/23.
In Uganda, the inflation rate increased from 3.4 per cent in 2021/22 to 9.2 per cent in the Financial Year 2022/23. As for South Sudan, the inflation rate shot up from 10.5 per cent to 13.6 per cent in the same period.
Currency exchange rates against US Dollar
Between Financial Year 2021/22 and 2022/23, Burundian Franc lost value from 2005.6 BIF per USD to 2321.7 BIF per USD, while Rwandan Franc (RwF) lost value from 1008.0 RwF per USD to 1075.0 RwF per USD.
In the same period, Kenyan Shilling lost value from 112.7 Ksh per USD to 126.2 ksh per USD, while Tanzanian Shillings lost value from 2300.3 Tsh per USD to 2321.7 Tsh per USD.
Ugandan Shillings lost value from 3571.6 UGX per USD to 3754.8 UGX per USD while South Sudan Pound (SSP) lost value from 425.6 SSP per USD to 658.6 SSP per USD in the same period.
The report analyzed that in the 2022/23 Financial Year, three Revenue Authorities namely the South Sudan Revenue Authority (SSRA) with 163.9 per cent, the Rwanda Revenue Authority (RRA) with 103.6 per cent, and the Uganda Revenue Authority with 1002.3 per cent exceeded their targets.
Meanwhile, the Tanzania Revenue Authority (TRA) with 2.5 per cent, the Kenya Revenue Authority (KRA) with 4.7 per cent, and the Burundi Revenue Authority (OBR) with 5.7 per cent missed their targets. South African Revenue Authority (SARS) missed its target too by 0.3 per cent by getting a 99.7 per cent average which was below the East African Revenue Authorities’ (EARAs) average of 109.1 per cent.
Although South Sudan did well in terms of Real GDP Growth as shown above. Ironically, this does not seem to reflect anywhere as the country keeps on borrowing and gets deep into debt. The payment of the salaries of civil servants has remained a long-lasting deficiency for a long time. A Civil society group threatened to sue the government over salary delays.
Impacts on Citizens
The above trend has a greater negative impact on the citizens of South Sudan. For instance, civil servants, including security personnel, do not have decent salaries. The salaries are also delayed because the public funds are used for personal gains by some cartels.
In 2022, former Minister for Finance, Agak Achuil Lual alleged that South Sudan oil had been sold in advance until 2027. He argued that if he was to pay salaries, he was supposed to sell 2028 oil in advance to secure money for paying salaries.
Another impact of this trend is the high cost of living for citizens. Several citizens are unable to afford a decent living because the prices of commodities are very high.
President Salva Kiir Mayardit concurred with this during the swearing-in ceremony of the current Minister for Finance and Planning Marial Dongrin saying the non-oil revenue is enough to pay salaries.
“We have nine solid months; people have not received their salaries and we have money. The money from non-oil revenues is enough to pay people and to do everything. Let us believe that you will. So, I give you a very limited time to see what you will do,” Kiir said.
“The solution will be that you must have one single account because the money is being collected yet everyone has his own account and these accounts do not come to the people. Everyone takes the money to his boss whom he knows, otherwise, we have a lot of money,” the head of state added.
The President said he had been firing several ministers for finance because he was looking for a solution to corruption in the financial sector. In the EAC Comparative Report of the 2022/23 Financial Year, Burundi, Uganda, Tanzania, and South Sudan are recorded to have witnessed tax-to-GDP ratios growth to 18, 13.7, 12.7, and 3.6 per cent respectively.
Conversely, Rwanda and Kenya had reduced tax to GDP Ratios of 15.0 and 14.2 per cent respectively.
South Sudan is once again indicated in the positive column but in reality, it does not reflect in real life of South Sudanese citizens living across the country. The low tax to GDP Ratio is blamed on the looting of resources as indicated by elites and human rights organizations as shown above.
Is There a Way Forward?
There are calls for the government of South Sudan to formulate a revenue reporting strategy, making sure that the revenue is all put into the national revenue authority’s bank account directly.
With this, counties would report their non-oil revenues to the state government, while state government report its non-oil revenue to the national government.
Experts also feel there is need for security organs that are not mandated by law to collect money like soldiers to keep off businesses.
