WASHINGTON, 17 December 2015 (IRIN) - South Sudan is an oil-rich country with fertile soil and a wealth of untapped mineral riches. Pilfering money is easy for those who are so inclined, and the attraction of diverting revenues for personal benefit is a key reason why the young country has been mired in a deadly, destructive two-year conflict.“There are many ways to make money through corruption in South Sudan,” the Enough Project ’s John Prendergast told IRIN at a hearing in Washington about the failure of leadership in South Sudan.
“Officials literally divert money from the treasury. They make money off contracts: you contract for a road to be built, the company never does the work but gets the money for building the road and gives half to officials. And officials manipulate the exchange rate – they feed off the differential between the market rate and the rate set by [the] central bank.”
Two years of conflict have helped to enable this corruption. Since the start of 2015, the black market rate for South Sudan’s currency has soared to 18 pounds to the dollar. The central bank in Juba still trades at a rate of around three-to-one. A report published in 2012 by Oxford University Professor of Development Economics Christopher Adam and then Oxford Policy Management consultant Lee Crawfurd warned that the dual exchange rate system was a door to corruption waiting to be opened, and that those who even before the conflict were buying and reselling foreign exchange, were “often… government officials and closely linked to the political elite.” The victims, meanwhile, are “those who would otherwise have benefited from public expenditure.” In other words, ordinary South Sudanese.
Prendergast says those in power in South Sudan today recognised all the possibilities available to them to make a quick buck 10 years ago, back when the Comprehensive Peace Deal was signed, ending the long civil war in Sudan and sowing the seeds for the birth of the new nation. After years in the bush, liberation fighters with no financial or governance experience were given unsupervised access to the riches of southern Sudan. Different factions sprang up like toadstools and quickly began sparring with each other for control of the wealth.
“One group got kickbacks from oil. Another group got kickbacks from contracts,” Prendergast told IRIN. “In my view, what descended the country back into war in 2013 is that the paramount faction, led by the president today, threw its rivals out of the government.”
He was referring to the firing by President Salva Kiir of the entire cabinet in July 2013, five months before a conflict erupted that has now killed tens of thousands, displaced millions and shut down the economy.
Deputy Chief of Mission for South Sudan in Washington, Baak Wol, told IRIN after the hearing that the sacking of the cabinet in 2013 was just one way that President Kiir was "trying to do something about corruption."
Prendergast says the fired officials felt they had to go to war to get back into a position where they could once again exploit loopholes and use South Sudan’s resources to enrich themselves because there are no legal avenues for officials to go down to seek redress. That’s because South Sudan’s officials never set up institutions.
Corrupt from top to bottom
While corrupt officials are now the generals and commanders in South Sudan’s ongoing war, corruption, in a different way, also provides a steady supply of footsoldiers to fight on the frontlines.
“The war may have been triggered by the conflict at the top, but where does the momentum come from to keep the conflict going?” said Loyola-Marymount University’s professor of African Studies, Jok Madut Jok. “Why do all these unemployed youths flock to the conflict?”
“They join because they have nothing to lose because corruption has not allowed resources to trickle down” to create jobs for them and give them a future, he told IRIN.
Around 80 percent of South Sudan’s working-age youth are unemployed or underemployed.
Jok argues that the billions of dollars of foreign aid pouring into South Sudan is also enabling corruption and, by default, fuelling the conflict, which, in spite of a peace deal that was signed in August, continues to seethe.
“Foreign aid pays for what the leaders are supposed to be paying for. So that local money, oil money, and other resources, can still be stolen,” he explained. “Donor money is used to show something is happening. Foreign aid is a kind of alibi for the failure to invest revenues from natural resources in the welfare of the people.”
First, end the fighting
Anti-corruption NGO Global Witness says one of the best ways to end corruption in South Sudan would be to fully implement the peace deal that was signed in August.
“The Peace Agreement recognises that for there to be a sustainable peace in the country, the Transitional Government (which was supposed to be up and running as of November but has already been delayed until January) must fundamentally overhaul the way the state is run – including, critically, how oil dollars are collected, accounted for and spent,” Global Witness said in a recent report.
“The Peace Agreement is a 30-month reform programme which seeks to create a transparent and accountable South Sudanese state by 2018,” it said.
But former US Special Envoy to Sudan and South Sudan, Princeton Lyman, told IRIN he is not convinced that Kiir and former vice president turned rebel leader Riek Machar would be fully committed “to the kind of transformation that is called for in the peace agreement, that is that you have a real change in the political structure, economic management, a much more democratic system.”
“If you have a court that goes for accountability, if you have a new constitution that prevents people from hijacking the system, if you have security sector reforms and can't have your own militia – all these things run against what they've been doing and probably would make it very hard for them to seek power in the future,” Lyman said.
“Peace, if it serves their interests, yes, but real transformation – they wouldn't have enough of a stake in that.”
An off-shoot of the Enough Project, the Sentry, is tracking the money coming out of South Sudan and has gathered “reams of evidence on a whole network of people that have benefitted remarkably as a result of the conflict,” Prendergast told IRIN. He refused to name names but said Sentry would release a full report early next year on corruption in South Sudan, including who’s involved and who in the international community is enabling the embezzlers.
Several NGOs contacted by IRIN for this story declined to comment, saying they feared they might be expelled from South Sudan, or worse, if they did.