Almost U$1 billion supplied to South Sudan through a credit line issued in US dollars in the form of letters of credit (L/Cs) from Qatar National Bank (QNB) and Kenya’s Stanbic Holdings to support the country’s efforts to import food, fuel, and medicine has gone missing, according to a new report.
South Sudan’s government has sought to distance itself from the report by investigative group The Sentry which accuses the country’s leaders, including members of President Salva Kiir’s family, a former governor of the central bank and military officials of stealing hundreds of millions of dollars from the L/C programme between 2012 and 2015.
Abuse of the L/C programme has been widely known for several years, but this latest report does appear to shed new light on the destination of funds siphoned from the programme.
Essentials not delivered
Millions of dollars’ worth of essential pharmaceuticals, fuel, and food were apparently not delivered according to the report.
It says the government failed to repay the borrowed money and entered arbitration proceedings initiated by QNB at the International Centre for Settlement of Investment Disputes (ICSID).
By July 2020, the matter remained unresolved, and the government reached a debt-restructuring agreement with the Qatari state-owned bank according to the report. It does not mention that in 2021 QNB brought a second ICSID claim against South Sudan.
Following the money
The Sentry says much of the money was diverted through a network of shell companies and bank accounts in Kenya, Uganda and Dubai and split amongst elite officials.
A 2015 report by the auditor general of South Sudan, Stephen Wondu, was presented to parliament but was never made public. This report, as well as interviews with South Sudanese close to the L/C programme, shows that the disbursement process developed into a confusing, disjointed system of documents and signatures that corrupt actors circumvented or subverted according to The Sentry.
The Wondu report, The Sentry says, provided a comprehensive overview of the timeline of events surrounding the L/C programme, the parties involved, and the wrongdoing committed, but did not identify which individuals or companies benefited directly from the scheme or may have violated the law.
South Sudan’s information minister described The Sentry’s report as “unsubstantiated” and aimed at “regime change”.
But when asked by Voice of Africa if the US$993 million provided by QNB ended up in the hands of individuals who were businesspeople and who were given L/Cs, not the government, Michael Makuei simply replied, “yes”.
The Sentry report, Cash Grab: How a Billion-Dollar Credit Scam Robbed South Sudan of Fuel, Food, and Medicine, can be found here.
South Sudan’s information minister Michael Makuei’s interview with Voice of Africa can be found here.
Categories: Trade Based Financial crimes News