October 31, 2011 (SSNA) -- The Ministry of Finance and Economic Planning of the Republic of South Sudan, at Home and Away, held a conference on Oil Revenue Management. The event brought together the governors and finance ministers of the oil producing states, government officials, international experts, and representatives from civil society. The conference is part of the on-going deliberation on how to manage oil revenue wisely to promote economic growth and diversification of the economy. In his opening remarks, H.E. Dr. Riek Machar, Vice President of Republic of South Sudan stressed “We all know that natural resources do not last forever, and we need to prepare for the time when the petroleum production declines and eventually ceases altogether.”
The Ministry of Finance and Economic Planning has taken the lead working together with the Ministry of Petroleum and Mining, Ministry of Justice, and the Bank of South Sudan to draft the Petroleum Revenue Management Bill, which was circulated prior to the conference. The Petroleum Revenue Management Bill establishes the Oil Revenue Stabilization Account to act as a buffer against volatility in oil prices and the Future Generation Fund to enable the Government to set aside some funds for future generations. The Bill is in line with the Transitional Constitution of South Sudan which clearly states that the ownership of petroleum and gas shall be vested in the people of South Sudan and shall be developed and managed by the National Government on behalf of, and for the benefit of, the people.
H.E. Kosti Manibe Ngai, Minister of Finance and Economic Planning, knowing oil revenue finances 98% of the Government’s budget, noted that South Sudan is highly exposed to volatility in oil prices. He indicated that a significant share of future oil revenue must be saved to ensure South Sudan has a buffer to cushion future volatility in oil prices and the expected decline in production. The oil production from current blocks is expected to decline by more than 40% over the next five years.
Representatives from the Ministry of Finance of Norway and Ministry of Finance of Ghana shared their experiences as the conference provided an opportunity to review models in these other countries. Hon. Pagan Amum, Secretary General of SPLM pointed out that oil can only be a curse if not managed well. The oil revenue management will be based on best international practice and principles for good governance, transparency, and accountability.
Hon. Simon Kun Pouch, Governor of Upper Nile State lauded the Central Government for working closely with all stakeholders to find the best way for South Sudan to manage its petroleum revenue. South Sudan is committed to park some of the oil revenue in a fund for the benefit of future generations and to avoid more serious negative consequences for economic growth, poverty, and social unrest.