Press Release

OFFICE OF THE PRESIDENT, GOVERNMENT OF SOUTHERN SUDAN

18/04/2007

Council of Ministers No 9/2007 18 April 2007; Interim Press Statement.

In an interim Press Statement issued after 5pm today, HE Dr Samson L Kwaje, GOSS Minister of Information and Broadcasting, made the following report.

GOSS Rejects Islamic Banking Plans

The Government of Southern Sudan (GOSS) Council of Ministers firmly rejected pressure from Islamic banks operating in Southern Sudan, for the Bank of Southern Sudan (BOSS) to allow them to operate a mixed conventional/Islamic banking system in the Southern Sudan. In a statement, HE Dr Samson L Kwaje, Minister of Information, made clear that such a move would be in clear contravention of the terms of the Comprehensive Peace Agreement (CPA). The CPA stipulates that the Southern Sudan will establish a conventional banking system, whilst the North will operate according to Islamic banking Principles. “You cannot do both”, he said.

As a result of this decision, the Minister said, a number of Islamic banks had indicated that they would withdraw from the Southern Sudan. These banks are: the Omdurman National Bank, Bank of Khartoum, Faisal Islamic Bank and Farmers Bank, which currently operate in Juba and other cities in Southern Sudan. If these banks, or any others, are unable to comply with the requirement to provide purely conventional banking services, they will be obliged to cease operating in Southern Sudan.

Public Service Salaries Reinstated to January Levels, Until End of 2007

In an interim statement issued during a meeting of the Government of Southern Sudan (GOSS) Council of Ministers, which is still in progress, HE the GOSS Minister for Information and Broadcasting announced that a decision had been taken to alleviate the losses suffered by Public Service staff as a result of recent exchange rate fluctuations between the US Dollar and the New Sudanese Pound. Until the end of 2007, he announced, these salaries would continue to be paid at the January 2007 levels. This will take effect from the April pay round.

For the past two months, explained the Minister, Public Service employees had suffered a loss of approximately 20% in their salaries. This was due to the fact that the GOSS budget had been drawn up in US Dollars, whilst salaries are paid in New Sudanese Pounds. The Sudanese Pound had strengthened in value by about 20%, as compared to the US Dollar, which caused a 20% reduction in the Sudanese Pound wages of affected employees.

Since the beginning of the year, the New Sudanese Pound has greatly strengthened in value in relation to the US Dollar, moving from an exchange rate of around 2.5 Sudanese Pounds per US Dollar, to a rate of around 2.0 NS Pounds per US Dollar. This loss was felt by the Council to be too much for Civil Servants to bear. As a result, the decision had been taken to pay Public Service salaries at levels relevant when the exchange rate was 2.5 NS Pounds, a level which was last paid in January.

This arrangement will last only until the end of 2007; the Ministry of Finance has been instructed to draw up next year’s budget in New Sudanese Pounds, ensuring that Public Servants will no longer be subjected losses due to currency fluctuations caused by the strength of the Sudanese currency.

Ministry of Finance to Crack Down on Payroll Irregularities and Freeze Public Service Appointments for 2007

HE Dr Samson Kwaje further reported that the Ministry of Finance had been instructed to make savings on payroll. He said; “It seems that a lot of Ministries have either ‘ghost workers’, or double payments… Ministers will now sit down with their Directors, Directors General and Under-Secretaries to check on this”.

The Council further resolved to freeze recruitment in 2007 in an effort to save money. There is once again a deficit, explained HE the Minister, of around 15.8 Million New Sudanese Pounds per month, or almost 160 million Dinar. The methods available to save money included; saving money from the payroll, freezing recruitments, or increasing non-oil revenues. Both of the first two measures have been acted on in today’s Council meeting.

The meeting, which is still sitting, is discussing the functioning of the Ministry of Finance. The current financial environment is necessitating difficult financial decisions, due to such factors as a large recruitment, reorganization of the Army and absorption of Other Armed Groups (OAGs). As a result there is a need to find ‘new methods of raising revenues and stabilizing the financial situation in Southern Sudan’.

Meeting Continues: Other Issues

Other issues so far discussed include a report from the Minister of Culture Youth and Sport. The Council resolved to accept the policy and the policy framework presented by the Minister, HE John Luk Jok

Finally, the GOSS Vice President and Minister of Housing, Lands and Public Utilities, HE Dr Riek Machar briefed the Council on the decisions taken in the Committees of the National Congress Party (NCP) and Sudan Peoples’ Liberation Movement (SPLM). These included issues affecting the functioning of the GOSS. These were discussed, and decisions were taken which will be taken to the Government of National Unity (GoNU) as the GOSS recommendations.