The 2021-2022 fiscal year budget promises mixed fortunes if the figures tabled on the floor of the Parliament are anything to go by.

The Minister of Finance and Planning, Agak Achuil Lual, told the lawmakers that the country is reeling from the debts, mostly owed to external lenders, but he remains hopeful that the economy will remain on an upward surge in the post-COVID-19 lockdown blues.

Public debt

Agak said the country owes US$2.7 billion to both local and external lenders.

According to the minister, the public debt as of June 30, 2021, represents 48.7 per cent of GDP.

He said of this money, US$D2.2 billion, which represents  82.1 per cent is external debt, and the balance of US $489.45 million, which represents 17.9 per cent is domestic debt.

He said the ‘‘US$2.2 billion external debt is made up of US $ 1.1 billion, which accounts for 50.9 per cent of commercial debt, and US$622.5 million, which accounts for 27.8 per cent of oil advances.’’  Also, there is US$326.9 million, which accounts for 14.6 per cent of the debt owed to multilateral institutions and US$ 150 million which accounts for 6.7 per cent of bilateral debt.

Commercial debts               

He said the commercial debt and oil advances take up almost 65 per cent of the country’s public debt, both of which are very expensive with terms and conditions that make debt service very costly.

Agak stressed that the government’s policy going forward will be to avoid any further contraction of commercial debts and oil advances unless a very limited set of conditions are met.

“In addition, we will start to build capacity in debt contraction management in MoFP so that any future debt contraction is properly analysed to inform any decision to contract such debt,” he stated.

However, Agak revealed that the gross domestic revenues for FY 2021/2022 are estimated to grow at SSP 647.4 billion, which represents 28.9 per cent of GDP.

‘‘Of this amount, SSP 589.1 billion, which represents 91.0 per cent of oil revenues, while the remainder of SSP 58.3 billion, which represents 9.0 per cent, is non-oil revenue,” the budget reads.

The document also revealed that total oil production in the financial year 2021-2022 is expected to be 156,000 barrels per day, down from 170,000 barrels per day in FY2020/2021.

It also noted that the projected reduction in oil production is due to the depletion of some oil wells as well as the effects of floods experienced in 2020. The government’s profit share in the oil production is 42 per cent, while the benchmark price for Dar Blend is projected at US$ 63 per barrel.

“Out of the gross oil revenues of SSP 589.1 billion, the government has provided for direct transfers or mandatory payments of SSP 478.1 billion, leaving a balance of SSP 111.0 billion to support the FY 2021/2022 budget,’’ the document reads.

The SSP 478.1 billion in mandatory transfers are accounted for by transfers to Sudan of SSP 63.8 billion for processing, transportation, and transit fees, transfers to oil-producing states and communities of SSP 26.3 billion, and transfers to the Ministry of Petroleum of SSP 15.8 billion.

Other mandatory/direct transfers are for the oil for roads projects of SSP 184 billion and debt service of SSP 188.2 billion.

Non-oil revenues are also expected to be SSP 58.2 billion in financial 2021-2022, up by SSP13.8 billion or 31.1 per cent from SSP 44.4 billion in FY 2020/2021. This has been attributed to sector reforms to instil accountability in revenue collection.

‘‘The projected increase in non-oil revenues is on account of the tax administration reforms that we are implementing at the National Revenue Authority, which include digitization of tax collections, broadening the tax base, and the proposal to fully deploy National Revenue Authority staff in the nontax revenue collecting institutions,’’ Agak said.

“We have proposed some adjustments in the fee: structure for some of the non-oil revenue categories. These proposals are included in the Financial Bill for FY 2021–2022,” he said.