South Sudan 2011 Constitution (reviewed 2013)

PART TWELVE. FINANCE AND ECONOMIC MATTERS

CHAPTER I. GUIDING PRINCIPLES FOR DEVELOPMENT AND EQUITABLE SHARING OF NATIONAL WEALTH

169

1. The National Government shall promote, support and encourage decentralized broad based and balanced and participatory economic development based on the principle of subsidiarity and devolution of governmental functions and powers to the appropriate levels where the people can best manage and direct their own affairs.
2. Equitable economic development shall be based, inter alia, on the agricultural and agro-industrial sectors, and promotion of private sector conducted in accordance with the best known practices of sustainable development within a framework of transparent and accountable governance.
3. The National Government shall promote and encourage the participation of the people in the formulation of its development policies and programmes.
4. The National Government shall endeavour to build institutional, human, social and economic capacity, develop infrastructure and social services and raise the standard of public services to attain the Millennium Development Goals.
5. The sharing and allocation of resources and national wealth shall be based on the premise that all states, localities and communities are entitled to equitable development without discrimination as shall be regulated by law.
6. National wealth and other resources shall be allocated in a manner that will enable each level of government to discharge its legal and constitutional responsibilities and duties and ensure that the quality of life and dignity of all the people are promoted without discrimination on grounds of gender, religion, political affiliation, ethnicity, language or locality.
7. The National Government shall fulfill its obligations to provide financial transfers to all levels of government, and shall, except as otherwise provided herein, apportion revenue equitably among the states and local governments as shall be determined by law.
8. Revenue sharing shall reflect a commitment to devolution of powers and decentralization of decision-making in regard to development, service delivery and good governance.
9. All taxes and duties set out in this Constitution shall be regulated by law to ensure coordination, fairness, equity, transparency and to avoid an excessive tax burden and tax incident on the citizens, private sector and investors.
10. No level of government shall unduly withhold any allocation or financial transfer due to another level of government. In case of dispute, any level of government, after attempting amicable solution, may initiate proceedings before the Supreme Court.

CHAPTER II. LAND OWNERSHIP, TENURE AND NATURAL RESOURCES

170. Land Ownership

1. All land in South Sudan is owned by the people of South Sudan and its usage shall be regulated by the government in accordance with the provisions of this Constitution and the law.
2. Notwithstanding sub-Article (1) above, and the provisions of Article 28 of this Constitution, the government at all levels, may expropriate land in the public interest as shall be prescribed by law.

171. Land Tenure

1. The regulation of land tenure, usage and exercise of rights thereon shall be governed by this Constitution and the law.
2. Without prejudice to sub-Article (4) below, the land tenure system in South Sudan shall consist of:
   1. public land;
   2. community land; and
   3. private land.
3. Public land shall include, but not be limited to:
   1. all land owned, held or otherwise acquired by any level of government as defined by law; and
   2. all land which is not otherwise classified as community or private.
4. Regardless of the classification of the land in question, rights over all subterranean and other natural resources throughout South Sudan, including petroleum and gas resources and solid minerals, shall belong to the National Government and shall be regulated by law.
5. Community land shall include all lands traditionally and historically held or used by local communities or their members. They shall be defined, held, managed and protected by law.
6. Private land shall include:
   1. registered land held by any person under leasehold tenure in accordance with the law;
   2. investment land acquired under lease from the Government or community for purposes of social and economic development in accordance with the law; and
   3. any other land designated as private land by law.
7. Rights in land and resources owned, held or otherwise acquired by the Government shall be exercised through the appropriate or designated level of government which shall recognize customary land rights under customary land law.
8. All levels of government shall institute a process to progressively develop and amend the relevant laws to incorporate customary rights and practices and local heritage.
9. Communities and persons enjoying rights in land shall be consulted in decisions that may affect their rights in lands and resources.
10. Communities and persons enjoying rights in land shall be entitled to prompt and equitable compensation on just terms arising from acquisition or development of land in their areas in the public interest.

172. Land Commission

1. There shall be established an independent commission to be known as the Land Commission, and it shall be composed of persons of proven competence, experience, integrity and impartiality.
2. The Chairperson, Deputy Chairperson and Members of the Commission shall be appointed by the President in accordance with this Constitution and the law.
3. The structure, composition, functions, powers and terms and conditions of service of the Chairperson, Deputy Chairperson, Members and employees of the Commission shall be regulated by law.

CHAPTER III. PETROLEUM AND GAS DEVELOPMENT AND MANAGEMENT

173. Guiding Principles for Petroleum and Gas Development and Management

1. 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.
2. Petroleum and gas development and management shall be guided by the following principles:
   1. safeguarding National interests;
   2. creating lasting benefits for society;
   3. promoting efficient and sustainable resource management;
   4. using oil revenues to develop other sectors of the economy, especially agriculture;
   5. ensuring transparency and accountability;
   6. promoting fair competition to increase productivity and efficiency in the petroleum and gas sector;
   7. promoting balanced and equitable development;
   8. creating a secure and healthy investment environment;
   9. protecting the environment and biodiversity;
   10. building the capacity of South Sudanese within the petroleum and gas sector;
   11. establishing oil infrastructure within South Sudan, such as pipelines, refineries, storage, processing and transport facilities;
   12. safeguarding interests of future generations;
   13. ensuring accountability for violations of human rights and degradation to the environment caused by petroleum and gas-related operations; and
   14. ensuring restoration of land and resources affected by development and management.

174. National Petroleum and Gas Commission

1. A National Petroleum and Gas Commission shall be established as a policy- making body with respect to petroleum and gas resources as shall be regulated by law.
2. The National Petroleum and Gas Commission shall report to the President and the National Legislative Assembly and Council of States.
3. The National Petroleum and Gas Commission shall consist of relevant national Ministries, other relevant institutions, and representatives of oil producing states appointed by the President in accordance with the law.
4. The Chairperson, Deputy Chairperson and members of the Commission shall be appointed by the President with the approval of the National Legislative Assembly.
5. The Structure, Composition, Functions, powers, terms and conditions of service of the chairperson, Deputy Chairperson, Members and employees of the Commission shall be regulated by law.

175. Ministry in Charge of Petroleum and Gas

1. The Ministry in charge of petroleum and gas shall be the policy implementing body of the Government with respect to petroleum affairs. It shall act in accordance with this Constitution and the law.
2. The functions of the Ministry shall include:
   1. negotiating all oil contracts for the exploration and development of oil and ensuring that they are consistent with its principles, policies and guidelines;
   2. initiating legislation, rules, and regulations regarding the petroleum and gas sector;
   3. managing the relations of the Government with petroleum and gas companies operating in South Sudan;
   4. formulating strategies and programmes for the development and management of the petroleum and gas sector;
   5. developing the necessary technical cadres for the petroleum and gas sector;
   6. in consultation with affected communities, ensuring that all petroleum and gas projects be subjected to environmental and social impact assessment; and
   7. signing contracts on behalf of the Government upon the approval of the National Petroleum and Gas Commission.

176. National Petroleum and Gas Corporation

There shall be established a national petroleum and gas corporation which shall participate in the upstream, midstream and downstream activities of the petroleum and gas sector on behalf of the National Government. Its structure, management, and functions shall be determined by law.

CHAPTER IV. SOURCES OF REVENUE

177. Sources of Revenue for the National Government

1. there shall be established a National Revenue Authority. Its structure, composition and functions shall be regulated by law.
2. The National Government shall legislate for raising revenue or collecting taxes from the following sources:
   1. petroleum, Gas/oil, mineral, and other natural resources;
   2. national personal income tax;
   3. corporate and business profit tax;
   4. customs duties and import taxes;
   5. airports, rail, road, and river transport revenue;
   6. service charges, fees and fines;
   7. national government enterprises and projects;
   8. value added tax or general sales tax on goods and services;
   9. excise duties;
   10. loans and borrowing from the Bank of South Sudan and the public;
   11. grants-in-aid and foreign financial assistance;
   12. fees from nationality, passports, immigration and visas;
   13. royalties; and
   14. any other tax or revenue as may be determined by law.

178. National Oil Revenue

1. The National Government oil revenue shall derive from the net oil revenue after payment to the Oil Revenue Stabilization Account. The two percent payable to the oil producing states shall be increased to five percent and shall be allocated as follows:
   1. Two percent shall be allocated to the states; and
   2. Three percent to the communities,

   The above allocations shall be regulated by law.

2. An Oil Revenue Stabilization Account shall be established from government oil net revenue derived from actual export sales above an agreed benchmark price. The benchmark price will be established annually as part of the national budget.
3. The National Government shall establish a Future Generation Fund from its share of net oil revenue.

179. Sources of Revenue of the States

The states shall legislate for raising revenue or collecting taxes from the following sources:

1. state land and property tax and royalties;
2. service charges for state services;
3. licences issued by the state;
4. state personal income tax;
5. levies on tourism;
6. at least two percent of net oil and other mineral revenues for each producing state;
7. state government projects;
8. stamp duties;
9. agricultural production taxes;
10. grants-in-aid and foreign aid;
11. excise duties;
12. other state taxes, which are not within the exclusive jurisdiction of the National Government;
13. loans and borrowing in accordance with Article 184 (2) and (3) of this Constitution; and
14. any other tax as may be determined by law.

CHAPTER V. FISCAL AND FINANCIAL INSTITUTIONS

180. National Revenue Fund

1. All revenue collected for or by the National Government shall be pooled in a National Revenue Fund administered by the Ministry of Finance. Such Fund shall embrace all accounts and sub-funds into which monies due to the National Government are collected, deposited and reported.
2. All the revenue and expenditure of each level of government shall be on- budget operations and made public as the case may be.
3. Any withdrawals from the National Revenue Fund shall not be made except in accordance with the law.
4. The criteria and conditions for allocation of revenue to the states shall be determined by law.

181. Fiscal and Financial Allocation and Monitoring Commission

1. There shall be established an independent commission to be known as the Fiscal and Financial Allocation and Monitoring Commission, to ensure transparency and fairness in regard to the allocation of funds collected at the level of the National Government to the states and local governments.
2. The Commission shall undertake the following duties and responsibilities:
   1. recommend criteria for allocation of National revenue to the state and local government levels;
   2. ensure and monitor that grants from the National Revenue Fund are promptly transferred to the respective levels of government;
   3. guarantee appropriate sharing and utilization of financial resources at the state and local government levels;
   4. safeguard transparency and fairness in the allocation of funds to the state and local government levels;
   5. monitor allocation and utilization of grants to and by the state and local government levels; and
   6. perform any other function as may be prescribed by law.
3. The Commission shall submit a quarterly report to the President and the National Legislative Assembly and the Council of States about its performance, and the President shall take appropriate remedial action to resolve any problems affecting the work of the Commission.
4. The President shall appoint the Chairperson, Deputy Chairperson, and Members of the Commission.
5. The structure, composition, functions, powers and terms and conditions of service of the Chairperson, Deputy Chairperson, Members and employees of the Commission shall be regulated by law.

CHAPTER VI. BANKING IN SOUTH SUDAN

182. Establishment of the Bank of South Sudan

1. There shall be established a central bank in South Sudan to be known as the Bank of South Sudan to provide for banking services in accordance with this Constitution and the law. The Bank shall be an independent corporate legal entity.
2. The Bank of South Sudan shall be responsible for the formulation, conduct and implementation of monetary policy.
3. The Bank of South Sudan shall use the market-based banking instruments developed by the Bank to regulate and supervise the implementation of the national monetary policy in South Sudan in relation to the following:
   1. formulating monetary policy;
   2. issuing currency;
   3. promoting and maintaining price stability;
   4. maintaining a stable exchange rate;
   5. maintaining sound, effective and efficient banking and credit system;
   6. chartering and supervising financial institutions in South Sudan; and
   7. performing any other function as may be prescribed by law.
4. The Bank of South Sudan shall be independent in the performance of its functions and the exercise of its powers.
5. All financial institutions shall be subject to rules and regulations set by the Bank of South Sudan as well as to internationally recognised regulatory and prudential standards for finance.
6. All financial institutions shall be bound to implement monetary policies set by the Bank of South Sudan.
7. The Bank of South Sudan shall be headed by a Governor and assisted by two Deputy Governors, appointed by the President and approved by two-third majority of members of the National Legislative Assembly present and voting.
8. The Governor of the Bank of South Sudan shall appoint other senior officers within the Bank of South Sudan in consultation with the Board of Directors and in accordance with the law.
9. There shall be established a Board of Directors for the Bank of South Sudan appointed by the President. It shall consist of nine members as follows:
   1. Governor of the Bank of South Sudan, Chairperson;
   2. two Deputies of the Governor, members; and
   3. six non-executive, highly qualified, competent and experienced South Sudanese who are not employees of the Bank, members.
10. The Board of Directors shall be the highest policy-making body of the Bank and shall be responsible to the President.
11. Decisions of Board of Directors on matters that may affect adversely the interests of the clientele shall be by consensus.
12. The tenure and terms and conditions of service of the Governor, Deputy Governors, members of the Board of Directors and other officials of the Bank shall be prescribed by law.

183. Circulating Currencies in South Sudan

1. The Bank of South Sudan shall have the exclusive right to issue a currency to be the legal tender of South Sudan, the design of which shall reflect the historical and cultural diversity of the country.
2. Until a new currency is issued on the recommendation of the Bank of South Sudan, the circulating currency in South Sudan shall be recognized as a legal tender.

184. Borrowing

1. 1. The National and state governments may borrow money with the approval of their respective legislatures. The appropriate legislature may by law exempt any categories of loans from the requirement of approval and in this case determine the extent of the money value of the loan subject to such conditions as it may prescribe; and
   2. Neither the National Government nor the Bank of South Sudan shall guarantee borrowing by any state government without their prior approval.
2. The National and state governments may borrow money from foreign sources depending on their respective credit worthiness.
3. Foreign borrowing by the governments of the states shall be in a manner that does not undermine national macro-economic policies and shall be consistent with the objective of maintaining external financial viability. All foreign borrowing transactions of National and state governments shall conform to the specifications of the Bank of South Sudan.
4. The National and state governments shall report financial and fiscal data relating to such loans to the Bank of South Sudan for statistical purposes.

CHAPTER VII. ACCOUNTING STANDARDS

185. Accounting Procedures, Standards and Fiscal Accountability

1. All levels of government shall comply with the established and generally accepted accounting procedures, standards and fiscal accountability to ensure that public funds are allocated and expended according to the budget of the respective level of government.
2. All levels of government shall hold all income and revenue received in public accounts and subject to public scrutiny and accountability.
3. The accounting procedures, standards and fiscal accountability shall be regulated by law.

186. National Audit Chamber

1. There shall be established an independent institution to be known as the National Audit Chamber, consisting of persons of proven professional competence, experience, integrity and impartiality.
2. The National Audit Chamber shall set auditing standards for the whole country and supervise the financial performance of all levels of government, including revenue collection and expenditure, in accordance with the budgets approved by their respective legislatures.
3. The President, with the approval of a two-third majority of all members of the National Legislative Assembly, shall appoint from qualified professionals the National Auditor General who shall be the head of the National Audit Chamber.
4. To assume office, the National Auditor General shall take oath before the President.
5. The office of the National Auditor General shall fall vacant under the following circumstances:
   1. removal from office by the President on the following grounds:
      1. serious violations of the Constitution or any other law;
      2. gross misconduct, whether in performance of his or her office functions or otherwise;
      3. physical and mental incapacity to perform the functions of office;
      4. incompetence or inefficiency; and
      5. bankruptcy;
   2. resignation;
   3. by a resolution of two third majority of Members of National Legislative Assembly present and voting; or
   4. death.
6. The National Auditor General shall be accountable to the President for the performance of the Chamber.
7. The National Audit Chamber shall assume auditing of the accounts of the National, state and local government levels, independent commissions, public institutions and corporations and any other institutions as may be determined by law.
8. The National Auditor General shall present an annual report to the President and the National Legislative Assembly or the Council of States, as the case may be.
9. The National Auditor General and senior officials of the National Audit Chamber shall be prohibited from engaging in all businesses in which constitutional office holders are not allowed to engage, pursuant to Article 120 (2) of this Constitution.
10. The law shall organize the National Audit Chamber and shall specify the tenure, functions, and terms and conditions of service of the National Auditor General and the employees of the Chamber.

CHAPTER VIII. INTERSTATE TRADE, COMMERCE AND LIABILITIES AND ASSETS

187. Interstate Trade and Commerce

1. Free interstate trade and commerce are guaranteed by this Constitution. No legislation or level of government shall impede interstate commerce, the flow of goods and services, capital or labour between the states and local governments.
2. There shall be no levies, taxes or fees or any other charges on interstate trade and commerce.

188. Government Liabilities and Assets

1. Any debt or liability incurred by any level of government shall be the responsibility of that level of government.
2. There shall be a fair and equitable division of government assets. An asset shall in the first instance be allocated to the level of government responsible for the function in respect of which the asset is related.
3. In the event of a dispute, such dispute shall be referred to a committee consisting of a representative of each of the parties involved in the dispute and a mutually agreed expert. The decision of the committee shall be final and binding.