South Sudan, a developing nation with nascent institutions and limited human resources capacity, is experiencing its worst economic crisis since gaining independence in 2011. Improving service delivery in this context requires effective public financial management systems.

In the third quarter of 2024, UNDP, funded by the African Development Bank (AfDB) through the Institutional Support Project for Strengthening Economic Governance in South Sudan, organized capacity-building workshops in all states and administrative areas. These workshops aimed to enhance the government's policy and technical capacities around revenue mobilization, budget processes, and legislative oversight. Under the facilitation of UNDP’s Economic Governance Analysts, the workshops provided a platform for subnational governments and stakeholders to learn about and share experiences regarding tax revenue policies, budget frameworks, and legislative oversight to ensure a prudent economic management process. The workshops also identified capacity gaps and provided policy options and recommendations on critical issues.

The events convened senior government officials including governors, ministers, government advisors, members of parliament, commissioner generals of revenue authorities, directors of audit chambers, ministry director generals and directors, and senior officials from municipal councils, as well as youth and women’s groups. The aim of these events is to strengthen economic institutions at the subnational level to serve as catalysts for addressing public financial management and sustainable development challenges.

Background Context

South Sudan is facing an enormous economic crisis due to internal conflicts, floods, and external factors such as wars in Ukraine, Sudan, and the Middle East, which have disrupted supply chains and led to macroeconomic instability. A recent pipeline breakdown disrupted oil production, significantly reducing government revenues and presenting a substantial fiscal challenge to the national budget, whose deficit is estimated at around 50% for FY 2024/2025. The oil sector initially accounted for 98% of total revenues, 95% of total exports, and 75% of GDP as of 2023. The reduction in oil revenues during FY 2023/2024 has correspondingly decreased transfers to states and administrative areas, which have struggled for many years to raise sufficient non-oil revenues to finance their budgets due to inadequate capacity and a fragmented tax system. This situation has affected service provision and exacerbated poverty levels and food insecurity. Additionally, most states and administrative areas have not been preparing their annual budgets in a transparent, comprehensive, and accountable manner. Budgets were signed into law without legislative oversight and citizen participation. Furthermore, both states and administrative areas lacked adequate policy and technical capacity to manage economic functions, undermining progress towards recovery, resilience, and development.

Against this backdrop, the series of workshops aimed to strengthen the human capacity of economic institutions, review past policy issues, guide budget preparation at the local level, identify challenges, and propose actionable solutions and recommendations aimed at enhancing non-oil revenue mobilization, budget processes, and legislative oversight. The overall objective of the workshops was to provide a catalytic platform and process to fast-track economic governance reforms at the subnational levels.

Workshop Categories

1. Taxation unification and revenue mobilization 

To harmonize the tax system and strengthen technical capacities to optimize non-oil revenue mobilization, three-day tax policy dialogues and trainings were organized in Warrap, Western Bahr el Ghazal, Northern Bahr el Ghazal, Lakes, Eastern Equatoria, Jonglei and Unity States, and Ruweng Administrative Area. In each of the state and administrative area, at least 50 government officials were trained, except in Warrap (90) and Eastern Equatoria (102), where significantly high numbers of officials attended. The workshop served as a platform to accelerate the eradication of the overlapping tax jurisdictions, ensuring fairness, transparency, and efficiency in tax collection. The workshop also emphasized the need to streamline tax laws, rates, and procedures, reducing the risk of double taxation, and providing clarity for taxpayers. It further highlighted that improving revenue mobilization would accelerate implementation of state/area development plans. 

2. Budget processes 

To strengthen capacities for budget processes and fiscal mobilization and management, several officials from the spending agencies in Upper Nile State (70), Central Equatoria (50), Greater Pibor Administrative Area (50) and Western Equatoria State (60) were convened for a three-day workshop in each state. In Upper Nile State, participants were trained on payroll management (South Sudan’s Electronic Payroll System), budget execution, and public procurement) and national financial legislations. The workshops were also to prepare agencies for the budget process in FY 2024/2025 and to address issues such as the salary increment and resource allocation which came up during FY 2023/2024 especially in Greater Pibor Administrative Area. 

3. Legislative oversight functions

To enhance legislative council’s ability to oversee financial matters, promoting transparency, civil society participation and accountability in fiscal policy and the budget process, UNDP in collaboration with the governments trained 50 MPs and senior government officials in Abyei Special Administrative Area and 100 MPs in Western Equatoria State on the annual budget process and financial scrutiny and audits. In Western Equatoria, a two-day fiscal year 2024/2025 budget preparation orientation workshop was also conducted for 60 participants comprising Director Generals, Directors for planning and budgeting, County Executive Directors, and county planners.