Can South Sudan combat corruption?

Salva Kiir, the president of South Sudan, has accused current and former senior officials of stealing at least $4bn in state funds.

In a letter to those he suspects of taking the money, he says: “We fought for freedom, justice and equality. Yet, once we got to power, we forgot what we fought for and began to enrich ourselves at the expense of our people ….”

“The steps taken indicate that this young republic is moving in a democratic manner that will control and solve the problem of corruption once and for all.” – Barnaba Marial Benjamin, South Sudan’s information minister

Kiir said the credibility of South Sudan is on the line, but he is also promising an amnesty and confidentiality for any of the 75 suspected officials who return the embezzled funds.

To facilitate this, he said the government has set up a special bank account in Kenya where officials can deposit the money they took.

South Sudan is desperately in need of money. Although oil production accounts for 98 per cent of its revenues, an ongoing dispute with the government of Sudan shut down production earlier this year.

From 2005 until independence Juba and Khartoum split the oil revenues evenly, with South Sudan collecting roughly $2bn a year from exports. The landlocked South produces 350,000 barrels of oil a day.

Last month, World Bank documents warned of possible “state collapse” if South Sudan runs out of foreign exchange reserves, which it said could be depleted by July.

“This is a public relations exercise. There’s been $17bn which has gone since 2005 to Juba. Where is it all?… it’s been corruption, diversion of money into arms, fat-cat guys putting money in bank accounts and now they’re saying ‘put it back’.“ – Paul Moorcraft, the director of the Centre for Foreign Policy Analysis

According to a previously released report by the South Sudanese auditor-general, over $1bn from oil revenues was unaccounted for during 2005 and 2006.

The auditor-general’s report also indicated that for two consecutive years there was no financial reporting of what happened to non-oil revenues that were collected in taxes by the national government or states. Billions more were feared missing between 2007 and 2011.

Millions of dollars were also reportedly smuggled out of South Sudan in bags across borders to unknown destinations.

Inside Story asks: Is this sort of corruption in South Sudan inevitable, and who is to blame for it?

Presenter Ghida Fakhry analyses this with guests: Barnaba Marial Benjamin, South Sudan’s information minister; Jonathan Temin, the director of the Sudan Programme at the US Institute of Peace; and Paul Moorcraft, the director of the Centre for Foreign Policy Analysis.

“The biggest economic help that South Sudan could get right now would be to strike a deal with Sudan on oil revenue-sharing … if the oil can get back online using the existing pipelines that can hugely help the cash flow.” Jonathan Temin, the director of the US Institute of Peace’s Sudan Programme

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THE STATE OF SOUTH SUDAN’S ECONOMY:

• South Sudan’s economy is fragile and underdeveloped
• About 98 per cent of its revenues come from oil but the abrupt shutdown of production caused by the dispute with Sudan has severely constrained economic growth
• South Sudan is considered to have the worst social and economic indicators in the world
• Its annual inflation shot up to nearly 80 per cent in May
• The latest average gross domestic product per capita is $3,000, which puts it at 172 in the world
• Around 70 per cent of the people are illiterate
• According to a recent survey, one out of every seven children in South Sudan dies in infancy
• There is only one doctor for every 500,000 people in some regions
• More than 90 per cent of the people in South Sudan live on less than $1 a day