Radio Miraya
2736: Parliamentary oversight on government critical for debt management and accountability
This week, the National Parliament referred the public financial accountability 2011 amendment bill 2023 for the third reading and the Chairperson of the Standing Specialized Committee of Finance and Economy Planning in the Parliament, Chiang Kotha Bichak, presented the bill for the second reading and this happened on Monday. Now, one of the important highlights of this process is that the Joint Committees are recommending limiting loan borrowing by the government. All loans are to be approved by Parliament. Essentially, they are proposing a layer of scrutiny of government funding. Now, we want to understand the implications of this. What is the problem that the legislators are trying to solve and if things go their way, what changes can there be? Our economist, analyst, James Waboya, is in the studio to discuss with us. Good morning and welcome to the program. Good morning. Right. Firstly, what do you think must have moved the parliamentarians to propose that the government borrowing must have additional gatekeeping? Yeah. Thank you so much for hosting me and thanks for this also and this for hearing my voice. There are three or four things that actually wanted Parliament to exert their efforts to get this bill passed in the way the Democratic went to the third reading. One was the requirements of the peace agreement that Parliament has to up its accountability requirements in order to make sure that there is a bill that promotes transparency and accountability in South Sudan. And the second reason is because between 2013 to today, the government borrowing capacity has gone to about $6 billion. Wow. And the borrowing from different entities, Parliament wasn't aware of those borrowings. There are things that Parliament is aware about if Parliament hasn't approved. So to date, there's about $2 billion worth of debt that the government accounted for and the government has no plan in it. And if you look at the national budget, it's basically we talk about $2 billion of borrowing to be on the budget. So basically if we approve a budget, the whole budget will go into paying the debt. And then we don't have a proper debt management database to really know how this debt has been coming in. Parliament needs to be informed on that, but the Parliament has not been informed on that. And the last part of it is to do with the role of Parliament. The constitution and the public finance and management and accountability act was very clear in terms of providing that every borrowing must go through Parliament and Parliament shall be the only sole institution that has the role of approving and deciding the loan. And that has not been happening. Right. And how have these institutions managed to bypass Parliament? I mean, there's been a lot of, I don't know, calling it subordination or a kind of not to recognize in the role of Parliament, because I mean, there's been these sentiments for over years now that Parliament is legitimate institution and the fact that the Cabinet looks at itself as the government that also created one of the issues. But the last issue I want to talk about, the international market fund conducted an assessment of risk situation in South Sudan in 2013, and they sort of make a very significant ratings about South Sudan. They talk about the risk external debt distress in this country is extremely high. They talk about over the risk of debt distress management in South Sudan is completely not as sustainable and high, it's very high, and it's through the accumulation of debt that will cripple the economy of South Sudan is not sustainable. So, of recent, of course, there's been a lot of efforts of civil society included into social policy and other institutions who are working with Parliament to really understand their role when it comes to the legislation making, and I think that's sort of resonated to now they become more aware of wait a minute, this has to be happening. And the last thing I want to talk about is to do with the constitution talks about the economic objectives in South Sudan, especially when we look at article that is at the seven of the constitution, it talks about every economic decision must go into the education of poverty. So the borrowing is assumed that you borrow to educate the poverty, there is to do with the attainment of sustainable development goals, if that goes that becomes a very sound of objectives. The last one talk about guaranteeing equal distribution of wealth, this borrowing has actually created inequalities because individuals borrow and then they distribute to themselves. It doesn't go through those sectors that are required to be that. And of course, the final issue is to do with the imbalance in incomes within different communities that that borrowing could have gone into that. And basically, when I talk about that in terms of the economic objective of the constitution, especially when we talk about promotional article that is seven, we talk about the budget that is financed by the borrowing, but goes through those critical sectors that affects South studies. And you say that Parliament has been mandated from get-go, but this has not been happening. But the current move, do you think it can stand to safeguard this unsustainable debt accrue? I think significant as so, my belief comes from a way that Parliament is up its responsibility and accountability and oversight role. If they do that because there are many, many set of look at several issues, it looks at issues to do with the promotion of prudent accountability measures and expenditures and also borrowing. It looks about issues to do with enhancing transparency, it's about accountable management of national wealth and resources, I think that are more strengthened within the law. And that is to do with the budget preparation process itself. I mean, before there is no talking about requisition and expenditures report that needs to be coming out, the issue to the borrowing and lending and accountability measures that are required in terms of examining accounts. So basically, there will be accountability in terms of how much money is in accounts, where is it coming from, how is this money has been spent, and that accountability needs to be rendered to Parliament. And that is one of the accountability issues that is important in that aspect. And the other aspect of talking about more important that the bill has a really broad form more importantly is to do with the procedure governing transfer to the states. And we even advocated transfer to the states and the local governments. Before, if you look at our budget analysis, there's been a very small money going to the states and also local governments. And you know that the local governments are the vehicle for service delivery. It's not the national government, it's not the state government. They just use it as a vehicle of challenging resources. So this bill seeks to also strengthen the public finance management within the local governments and the states so that too much of the resources goes into those institutions. Yeah, a lot of local governments. The only challenge is that, and that's why we advocate for the consistent making process because we have to find out what type of government or governance is required to push that part. Because if we talk about this federalization, if we talk about devolutional power to those states, if we talk about federalism, it could be even more better because then those become like semi-autonomous institutions, the local governments, the counties, the municipalities, the town councils, the bombers, the payams, and perhaps also the state at that particular level. But this bill is really good in terms of its intent, but we wait to see what institutions of governance could be, the parliament, and if parliament is being subordinated by the executives, could we have a strength and legislative that we could take this issue to court? And the court will strike this issue down and then it will become more stronger in that nature. Right. And you spoke about, just to take you back a little bit about the preconditions at work in place for the borrowing, it has to come to eradicating poverty or meeting the SDGs. Now, how much of this information is in the public and how can the public be empowered to hold their representatives accountable? Yeah. I mean, one thing that is, we were talking about the parliamentarians for many, many times, especially me, what I made with them is to have a very strong awareness on these processes and get the evidence more important, go back to your consortium and educate your people about what parliament is doing and what are the problems process related to public finance and accountability mechanisms in this country. And this, you have a bit of mobilization in terms of people knowing what is happening. And one thing that also we talk about accountability is that we do not do naming and shaming in a way that people know that, okay, we have done our job as parliamentarians, it's the executive that's not doing their job. They're all on public finance management, obviously, from the public finance accountability act is resting on the minister of finance. But now, even this bill is also talking about the bottom-up approach of budgeting, bottom-up approach of planning, because that was one thing that was missing. They had something called ceiling. They give you, you minister, you deserve to have $100 million, $50 million, $10 million. They just decide, it's not decided on what is your plan for this year and how much does plan cost. Right. And what are the priorities? And this issue that I talk about in terms of public education, sustainable development goals, equal distribution of wealth, addressing the balance of income, and also achieving decent standard of life for people of South Sudan. Are they their objectives? So sort of linking the plans, the budget, into some of those issues, we could begin to see this as. Right. Right. So what sort of criteria should legislators apply when they are scrutinizing these proposed borrowings by the government? I think the entry point would be in terms of the discussions. I know one thing that the parliament have talked about is the issue of Minister of Finance begin to present a policy, a budget policy statement. From the policy, budget statements will begin to see what are the policies of the government, and then that will create a kind of dialogue between some society, the parliamentarians in terms of begin to look at some of the approaches. And by the time that the budget is presented a parliament, you begin to see what are the issues that need to be addressed, and then the focus will be, how much are we borrowing and for what? And the issue here also I want to talk about as one of the issues is to do with the documentation of these issues in parliament. Because parliament do not have a book that sort of documents this borrowing and even some of the decisions that have made that could be followed for future. Right. Not to just understand, what powers must the parliament have, must they have the powers to stop a loan process, should they disagree with the terms, and how far can the parliamentarians go with this? Parliament has a very absolute role and responsibilities in terms of anything that the government does that is not in line with the public interest. It must be struggling. And the role of parliament is not based on the individual interest, it's based on the public interest. So they have the power to hold. They have the power. Right. The only problem is, if you talk to the espalent members of parliament, they fear to scrutinize their own members of parliament because some of those executives are actually their leaders in their parties and they will be shocked. So these are about revocations. I mean, people say we want to speak, but it will be revoked and that becomes a challenge. So if there is a will of allowing freedom of expression and choice in decision-making parliament, so the parliament will press as independent institution as mandated by the constitution and also the peace agreement, I think you will see a lot of changes because I told people that all the sufferers we are having, parliament has a responsibility to even end the suffering. Because if they don't want a minister that does not do his job or had a job, they can impeach that person. Right? They can stop the long process. They can stop any process that is happening. But the problem is, there is a lot of worry, you know, because most people in parliament or the honorable members of parliament, they are looking at being in parliament as a livelihood. And if I lose my job, I won't be able to get it back. So that becomes one of the biggest challenges in terms of enhancing and increasing accountability. Right. Now let's speak hypothetically in a case where the terms of the loan are agreeable by the parliamentarians or the legislators, possibly by also everyone else, what can be done to make sure that the intended secured fund is actually put to the intended use. What happens usually is that when a minister of finance goes away to the loan, they come up with the terms and conditions, this comes in conditions as processed through the specialized committee of finance in parliament. It goes through the process like the way the budget process has been made. And then parliament then sits on a proof. In that approval, there are a lot of conditions that are put in there, including how are they going to spend the money or these things. Because by the end of the day, this loan is going to be factored into the budget for payment. Because there are certain loans that come to the high level interest that will be paid, the other that will come with maybe very low interest. So this will be factored in so that by the next financial year, parliament is aware that we have this number of loans that needs to be factored into the budget for payback. So that process right now is lacking. It's only put into the budget and certainly we have borrowed this amount of money last year and parliament police approved that. And they were not the ones who are participating in the approval of the loan, but now there have been force to participate in putting those loans into the budget for the payment. So that is a process that we advocate to be made very transparent and everyone must know because it's us and our children in the future that will definitely serve. These loans are going to be paid by oil money, by nine oil money, by taxes, by everything. Right? And you know this country is facing a lot of economic crisis now. So the more we borrow, the more we suffer. And of course, if we borrow to be eaten, we borrow to be looted or we borrow for corruption, then that accumulates and that also impacts the ability of government to really begin coming out and begin providing services to people of South Sudan. And that is why we're saying, please stop that process, let us go back to the law and make this more stronger and begin to implement the law because when the law is there, people will have a selective mechanism of suging what they want, what they don't want, that also impacts the ability of getting a robust public finance and accountability systems in this country. Right. And as we conclude this, can we be confident that this move shows a desire towards open governance and the running of public accounts or we need to be cautious and just wait and see? I think so because now our relationship between the government and the citizens, civil society and the community, is going to be through this law, anything they do where they fight them to the law. And this law becomes our discussion points. So I think the more we stick to the law, the more you begin to see changes. But if we just say, no, let them implement the law and nothing happens, then it becomes an issue. So I think that's one of the issues that the South Sudan needs to be able to even read this law once it's published so they know what needs to be happening moving forward. Right. Thank you so much for your time. What are your final words? No, I'm happy that parliament is really doing its job, especially the, I just want to give a very strong thanks to Tankot Banchok, who is the specialized person of this committee for finance and the company. Because since he took over his job, he has been doing a very good job. We've never seen someone working like that. His committee, including the members, has been doing a tremendous job. So let them keep South Sudan hard and let them work according to the interests of this country. Thank you so much. Thank you so much for your time. You're welcome. Oh yes, you're listening to the Miraya Brook for sure, and this is where the nation's biggest conversations begin every morning.