Government officials accused of misusing letter of credit in Jonglei state
June 20, 2015 (BOR) – South Sudanese members of chamber of commerce, which is a union for traders, has accused government officials of diverting large portion of $30 million worth of letter of credits (LCs) in Jonglei state since May last year.
Speaking at the traders meeting in Bor on Friday and Saturday, the traders expressed their deep concerns about the lost funds from the $30 million LCs which they said had resulted in soaring of prices in the market for essential food commodities.
The LCs were supposed to be provided to traders who import essential commodities from neighboring countries.
Sudan Tribune conducted interviews seeking evidences of the claims by traders who said the process was corrupted by government officials and could not make positive impact for the intended purpose which aimed to avail and reduce prices in the state.
“The letter of credit has been coming here, but for us as traders, we are not getting it at all. It is controlled by the government officials, only eight companies out of 38 known registered companies got it, and lots of money was taken by government officials who are not traders,” said Mabior Kuol Ajok in the state capital, Bor.
The state government formed the LC committee with traders’ representation to facilitate and oversee the distribution of LCs to the companies, but Ajok said the LCs instead ended up in the hands of government officials who were not traders.
“What I know is that some government officials had taken LCs,” he said.
“The committee of LC came to tell us, you traders, come with your licenses for registration for LCs, and tomorrow you get traders are not there, only the government officials are receiving it. These government officials are not running businesses here in Bor, they are not traders, I don’t [know] what they used the money for,” he explained.
According to South Sudan national chairman of chamber of commerce, William Akwoch Lwong, the management of the LCs entirely rested on the government shoulders, saying its management had not given to traders’ body.
Since 2013 after crisis, Central Equartoria, Jonglei, Upper Nile and Unity states had been receiving $10 million in form of LCs in an interval of 3 to 4 months, according to Lwong, adding, “Our participation in issuing of LCs has [stopped]. It is completely managed by the government.
He also added “there is no law that guides the usage and monitoring, of the letter of credit nationwide.”
As the number of registered companies increased from 38 to 63 in Jonlgei state in 2015, majority of new trading companies were either foreign, or non-existing companies owned by government officials or their relatives, according to traders. They said they only knew 38 registered companies in Bor town, currently selling goods either at retail or whole sale prices.
The receivers of Letters of Credit valued $30 million from LC committee attached to state ministry of finance since the crisis started, very few had so far turned up with an imported goods to the local market in Bor. With increasing need for hard currency amid its scarcity, most of the essential goods are no longer affordable to low-income families, inflicting high cost of living.
Majok Kur Kuer, the owner of Padak-three trading company registered to sell food commodities received LC of $100,000 in May this year to import goods that would be sold at cheaper prices to the local populations.
Kuer’s company was among many of the last companies that received the last LCs of $10 million in the year with the aim of importing various items including drugs to Bor, but only his company had imported the goods.
Previously $20 million letters of credit were given to 42 companies in the last two phases but none was seen coming home with imported goods sold at recommended prices.
Among the goods Kuer’s company brought included sugar, one of the commodities almost out of stock in Bor. Rice, wheat flour, oil, onions, soap and food spices, among others were brought.
He now sells a bag of rice at SSP180, while the rest sell the same at SSP285 in Bor Marol market; his 50kg bag of sugar is at SSP600 while other traders sell it at SSP750.
Kuer brought wheat flour in 50kg bags priced at SSP300 per bag, and the general market price is SSP100 higher than his. According to him, all the receivers of the LC had commitment to bring goods to help the locals get basic needs at affordable prices, but the agreement was not honoured by majority of those who benefited from the LCs.
“We all agreed to import goods to the people of Jonglei. All the recipients of LCs were sons of Dinka Bor, some of them came from Juba and the state officials added their names, little was done to establish whether they owned shops in Bor market. These people sold dollars in the black market and are now building towers in Bor and elsewhere,” Kuer further revealed.
He challenged those who used the LCs money to construct buildings, saying the purpose was to import what could help the citizens of the state to access affordable commodities and live a good life.
He also urged the state government to follow the recipients of the LCs by tracing them using phones calls and meet them to find who brought what from where with the aim of verifying the documents used to bring in goods from where they came with them.
Recently, South Sudan government announced to withhold LCs dispatched to traders in the national capital, Juba, as a result of worsening economic crisis brought about by dollar scarcity.
(ST)