Africa’s youngest nation, the Republic of Southern Sudan, has lost more than $4 billion due to public sector corruption.
The country’s first and current president, Salva Kiir, sent a letter to 75 current and former government officials, accusing them of embezzling the money from state coffers. Though the letter didn’t say when the money was stolen, the embezzlement probably dates from 2005, when Sudan and Southern Sudan signed a Comprehensive Peace Agreement and Southern Sudan began managing its own finances. The country became independent on July 9 last year.
Since 2005, Southern Sudan has collected about $10 billion in oil revenues. It produces half a million barrels per day, which fund nearly 98% of the government’s budget.
Southern Sudan’s government has opened an account in a Kenyan bank where anyone holding stolen government funds can return them without being prosecuted. So far $60 million of the $4 billion has been recovered.
Corruption in Southern Sudan is endemic and civil wars wracked the country from 1955 to 2005, badly degrading the infrastructure. However, it is immensely rich in natural resources such as oil, gold, uranium, diamonds and iron ore. It also has a fast-growing population of about 8.3 million, with increasing spending power. This makes it very attractive to foreign investors, and many are now jostling for opportunities there.
But the endemic corruption presents a serious compliance challenge. Last year, MacMillan Publishing admitted trying to bribe World Bank employees to win book sales in Southern Sudan. It paid £11 million in a negotiated civil settlement with the U.K. Serious Fraud Office and was debarred by the World Bank for three years. It also voluntarily withdrew from all public tenders by its education division in East and West Africa, regardless of the source of funds.
Michael Kuria is a contributing editor of the FCPA Blog. He’s a counter-fraud and counter-corruption consultant currently active in the East, Central and Horn of Africa regions.