South Sudan: A deeper look into the billion dollar credit scam

The US advocacy group The Sentry has made damning allegations of a $1 billion credit scam involving senior government officials, foreign companies, and international banks in South Sudan. The situation dates back to 2012 to 2015 when the South Sudanese government secured a credit line from Qatar National Bank and CFC Stanbic Bank in Kenya to import essential commodities such as food, fuel, and medicine to the war-torn nation. However, questions arise about where this substantial sum of money disappeared. Is it a case of corruption, mismanagement, or valid trade deals? In a recent interview with CNBC Africa, Akol Dok, the managing partner of Orus, shed light on the issue from Juba, South Sudan. Dok dissects the allegations made by The Sentry, emphasizing the economic challenges faced by South Sudan during the mentioned years, marked by low oil prices and a dire need to import crucial goods. He asserts that not all parties involved in the transactions should be painted with the same brush, as some legitimately conducted business to address the country's urgent needs. One of the discrepancies highlighted by The Sentry is the involvement of government officials' associates and relatives in trade deals. Dok rebuts this claim, stating that family ties to officials should not automatically equate to corruption. Additionally, the allegation that the letter of credit system was misused raises valid concerns, but he points out that there were audits conducted to address such issues. The report's emphasis on targeting specific individuals linked to powerful figures might not provide a fair assessment of the situation. There is a debate on whether the banks involved should bear the responsibility of repaying the alleged embezzled funds. Dok clarifies that the $1 billion was allocated to facilitate imports through the banking system, and the blame should not solely fall on the banks as they were conduits for legitimate transactions. He explains that the differential rates between the bank rate and the black market rate were leveraged to ensure goods were imported at affordable rates, aiming to alleviate the burden on consumers in a challenging economic environment. Addressing South Sudan's tarnished transparency record, Dok underlines the importance of strengthening the country's financial institutions to combat corruption effectively. With South Sudan ranking poorly in Transparency International's Corruption Perception Index, there is a pressing need to align the banking sector with international standards, enhance KYC procedures, and implement professional banking practices. The recent convergence of the bank and market rates is seen as a positive step towards curbing financial irregularities. As South Sudan moves towards fostering a stable economic environment, the focus lies on empowering the banking sector and instilling measures to promote financial integrity. The ongoing discussions at global economic forums, as represented by South Sudan's Minister of Finance, reflect a concerted effort to bolster the country's financial resilience and eradicate corrupt practices. By ensuring a level playing field in the financial markets and upholding transparency, South Sudan aims to attract investors and rebuild its reputation on the global stage.