Corruption in South Sudan is among the worst in the world. The nation's elites have developed a kleptocratic system that controls every part of the South Sudanese economy. This system has taken shape quickly in a relatively short period, South Sudan having won self-rule in 2005 while remaining part of Sudan, and having been accorded full sovereignty in 2011.
According to one member of parliament, the nation has lacked any and all regulations to "combat frauds and malfeasance among the senior government officials," especially among government procurement officials within the Ministry of Finance and Economic Planning. In a 2013 article, Nyol Gaar Nguen wrote that "[o]utright thieves and looting of public funds in broad daylight by the enforcer or man in charge always reigns" in South Sudan. The degree of corruption and mismanagement revealed in the Auditor General's report for 2005 and 2006 reportedly "brought some MPs in South Sudan's National Legislative Assembly to tears." A 2012 report stated that more than $4 billion in government funds had been stolen since the advent of self-rule in 2005.
The major corruption scandal since the beginning of self-rule has been the so-called "Dura Saga," although there have been dozens of other significant instances of similar wrongdoing. These episodes have often been shrouded in confusion and have almost never resulted in prosecution or punishment. The Africa Review noted in 2013 that despite the South Sudanese government having ordered several investigations into scandals, they are virtually always ignored or intentionally sabotaged altogether. President Salva Kiir Mayardit has repeatedly declared that his government is actively fighting corruption, but on April 12, 2013, he fired Elias Wako Nyamellel, Deputy Minister of Foreign Affairs and International Cooperation, "for acknowledging that South Sudan is corrupted and 'rotten to the core.'" The problem is compounded by the serious lack of transparency in South Sudanese government records and business information. Requests for official data can be arbitrarily turned down with impunity.
Beginnings South Sudan, notes a 2015 report by The Sentry, was founded with hope in mind with its citizens voting overwhelmingly for independence and the international community providing substantial assistance. Given its high level of oil revenues, South Sudan was predicted to rapidly attain self-reliance after the transition, but instead it "plunged into civil war, economic collapse, and creeping international isolation," while its rulers took over virtually every sector of the economy, squandering "a historic chance for the development of a functional state." The ongoing civil war is largely the result of conflicts among the elites who desire to "re-negotiate" shares of the political-economic power balance, including natural resources, through war.
The corruption system A report by the U4 Anti-Corruption Resource Centre, identifies the main types of corruption in South Sudan as bureaucratic corruption, patronage, political corruption, and embezzlement, and states that these forms of corruption take place largely in the following sectors: extractives, public financial management, and police and security forces.
A report by The Sentry categorizes corruption in South Sudan in a slightly different way, identifying the following four main methods the nation's wealth is diverted into the pockets of elites:
The extractives sector, the nation's largest revenue source, lacks any transparency and is completely mismanaged. Oil is the government's main source of hard currency, and serves as collateral for the foreign loans that keep its economy afloat. The military state maintains control over the nation's economy directly by controlling the public budget and indirectly by close ties to businesses and contracts. South Sudan's military spending is higher than that of any other country in the region. Virtually no information about military allocations is provided, which in some cases is a violation of the law. The military involves "a large and complicated patronage system," and there is little oversight of payroll expenses, with the leading security ministries (Defense, Interior, and Intelligence) rarely reporting their payroll expenditures. In many cases, military commanders have stolen the salaries of soldiers; there are also tens of thousands of "ghost soldiers," i.e., soldiers who exist only on payroll documents, and this is said to be the primary method of military and security officials to divert wealth to private accounts. Military generals wield great power in allocating government funds, and often redirect non-military funds to military purposes. Acquisition of military weapons and supplies is carried out in an ad-hoc manner and is characterized by corruption, overpricing, and a lack of proper paperwork and transparency. The president's personal budget is "subject to very little oversight," and many items in it are outrageously inflated and apparently conceal military expenditures. State spending involves a procurement system that is susceptible to corruption and waste, with lucrative contracts regularly awarded to the suppliers connected to government officials. Nearly every public institution is crippled by corruption and mismanagement. No-bid contracts, notably for roadbuilding and vehicle imports, are regularly awarded to companies owned by ruling elites at inflated prices with no oversight. State spending in South Sudan is marked by a "widespread disregard" for reporting, regulation, and documentation. Setting up companies involves dealing with an elaborate bureaucracy, and this complex system is believed to have enabled officials to profit extensively through bribes and the acquisition of undocumented shares in firms. Rules requiring annual financial disclosures are systematically ignored. A considerable amount of state funds is also diverted into shell companies that are used to divert state wealth on a large scale. In several cases, government contracts have been awarded to firms that had no background in the relevant activity and that were likely set up only days or even hours before the contracts were awarded. Money laundering: Elites exploit the country's fragile financial industry by using it to launder money and generate revenue. South Sudan's elites are involved heavily in the financial sector, especially in speculation in the parallel currency market, which lowers the value of the currency and leads to inflation. The sector has expanded considerably since the country gained its independence, making it easier for elites to engage in illegal transfers. "Bulk cash couriers" allow for simpler and faster transfer of funds out of the country, with fewer disclosures and less traceability. In addition, several banks' board of directors lists name the same nation's elites, indicating these banks chiefly serve their interests. Also, private FOREX bureaus have been established, and facilitate money laundering and other illicit transactions. Some of them are reportedly owned by members of the elite, which would represent a major conflict of interest. A major cause is also tribalism. Locked in a competition for power and control of resources and territory, South Sudan’s elites continue to pursue partisan political ends, mobilizing and exploiting ethnic differences and tensions. Dura Saga In 2008, expecting a famine, the South Sudan government paid nearly $1 million, according to a 2013 report by the Voice of America, for cereals that were never delivered. This is known as the "Dura Saga," after the South Sudanese name for sorghum, dura. World Bank auditors found in February 2013 that 290 firms were paid without ever having signed a contract, and another 151 firms were overpaid significantly. A criminal probe launched in the wake of this audit sought to ascertain why the contractors were paid for goods that never arrived, why the prices were so high, and if government officials were involved in the scandal. The probe was to be led by Prosecutor General Filberto Mayout Mareng.
A February 2012 report by the Sudan Tribune described the Dura Saga as the largest and most costly corruption scandal in South Sudan since the nation's founding in 2005 and maintained that it involved the disappearance of not just one million but several billion dollars that had been allocated for the building and repair of grain stores and the purchase of grain. In a June 2012 article, Dr. Jok Madut Jok, Under Secretary of the National Ministry of Culture, put the missing amount at $4 million and added the funds were somewhere among the traders who falsely claimed to have delivered the grain, the governors who lied about the grain delivery or were criminally negligent, or the ministers of finance in Juba who approved payments for more than double the national budget.
A list of 81 fake companies that had allegedly been involved in the scandal was posted online in January 2013, along with appropriated amounts for each firm ranging from SSP 400,000 to SSP 2,000,000 . Among those blamed for the scandal were Michael Makuei Lueth, Parliamentary Affairs minister, whose then-ministry had registered the companies, and Benjamin Bol Mel, chairman of the Chamber of Commerce and owner of the ABMC construction company, who wrote to President Kiir to insist payment for the bogus contracts.
Other incidents An audit of government accounts showed that over $1 billion had disappeared without a trace from 2005 to 2006. The parliament subsequently summoned Arthur Akwen Chol, former Minister of Finance and Economic Planning, and Elijah Malok Aleng, former Governor of what was then called the Central Bank of Southern Sudan (CBoSS), and accused them of aiding corruption. Chol refused to appear; Malok did appear, and denied guilt, while saying that some of the missing funds had been diverted into Akwen's personal accounts. Akwen was also accused of buying government vehicles from the Cardinal Company at an inflated price, but Akwen said that he had made the purchase at the direction of Vice President Riek Machar. Machar, in turn, while admitting to having asked Akwen to purchase vehicles, denied being involved in the details of the transaction.
Between 2006 and 2012, the country spent $1.7 billion on road construction, but only 75 kilometres of roads had been built or paved. Stephen Madut Baak, a presidential advisor, was caught at Heathrow Airport in 2008 with allegedly $3 million in cash –which was later confirmed by the Government of Southern Sudan to be false information as Mr Stephen Madut Baak was only in possession of $137,000 to open the Government of Southern Sudan liaison office in London. Due to UK restrictions on such sums of money coming from countries outside of the European Union and failure to declare the funds, the money was seized by HM Revenue and Customs, however, the total sum was cleared of any suspicions and was released back to him by the local authorities within 24 hours. Also in 2008, Arthur Akuien Chol, former Finance Minister, reportedly stole $600 million. In 2009, a sum of $323,000 that was intended for East African students was deposited into a private bank account in Uganda.