South Sudan investigates grain fraud worth billions of dollars

January 22, 2011 (JUBA) – The semi-autonomous regional government of South Sudan says it wants to prosecute companies involved corrupt practices in relation to a huge fraud regarding grain deals, which officials describe as the worst corrupt event the region had ever witnessed.

During food shortages in 2008, the government directed the ministry of Finance and Economic Planning to buy and distribute food reserves worth two billion Sudanese Pounds (0.8 billion US Dollars) to the region’s ten states, which was to be sold by state authorities at subsidized prices.

Over 700 companies were contracted to provide and distribute the grain. While some of such contracts were genuine, according to officials, the bulk of the process turned out to be a looting spree when individuals and groups registering fake companies that did not exist or have capital, in order to win the contracts.

The official spokesman of the government, Dr. Barnaba Marial Benjamin, told the press that the government was to investigate the issue and punish the culprits.

Officials say the grain corruption has damaged the image of the south as it approaches likely independence, after a referendum held earlier this month. Countries friendly to southern Sudan have continued to criticize the region over the fraud.

The south, which having only just came out of war in 2005 does not have many private companies. However, hundreds of paper or fake companies were registered with the ministry of Legal Affairs and Constitutional Development and won contracts with the Ministry of Finance and Economic Planning, amounting to more than six billion Sudanese pounds ($3 billion dollars).

The companies have been demanding payment from South Sudan government of costs they claimed to have incurred during the delivery of the grains, mainly maize and dura. While some have delivered the grain to the needy populations, the bulk of the companies are suspected to have not delivered despite having acquired certificates of delivery from state authorities.

In a meeting on Friday chaired by President Salva Kiir Mayardit, a list of 410 companies, demanding to be paid an outstanding balance of 2.5 billion Sudanese pounds was presented to the Council of Ministers by the Minister of Finance and Economic Planning, David Deng Athorbei. They claimed to have delivered more than 10 billion bags of maize and dura to the ten states. Nearly 78 million Sudanese Pounds has already been paid by the GoSS ministry of Finance to some of such companies.

However, in the resolution passed on Friday, GoSS resolved to refer back all the outstanding claims to the respective states to scrutinize the lists and identify the companies that had truly delivered and then pay them from the revenues collected from the sale of the grains in the states.

A 3-person ministerial committee was formed to follow up with the process in the respective states.

The bulk of the individual companies are believed to have already run away tens million of Dollars. Marial said investigations will be carried out and “the law will take its course” for culprits found responsible. He said no further payments will be made to any of such companies “until further notice.”

(ST)