Audit report reveals South Sudan lost $1 billion through letters of credit

By John Agok

South Sudan lost $1 billion in letters of credit issued for imports between 2012 and 2015, an audit report said.

The latest report from the Auditor General indicates that the letters of credit (LC) issued by South Sudan’s government to various institutions to import commodities and try to stabilize prices were diverted to personal pockets of individuals.

After the closure of oil production in 2012, the government negotiated the supply of strategic imports including, pharmaceuticals, fuel, food, building materials and industrial inputs but rogue companies set in to rob the country, the report to parliament signed by the Auditor General, Ambassador Stephen Wondu said.

According to the report, “the Letters of Credit program facilitated the illicit transfer of one billion dollars out of South Sudan at a time when the country was in dire need of every single dollar.”

“Many of the applicants’ importers and their foreign beneficiary exporters used the government sponsored letters for illicit transfers, capital flights and parallel market dealings,” it said.

“Incompetent and nonexistent companies with no addresses and visible office spaces were allocated dollars for purposes of importing strategic goods to the country.”

The report said the Letter of Credit project failed totally and instead “benefitted a few officials and fake traders who turned this noble international trade payment facility to a mere means for personal benefit at the expense of the people of South Sudan.”

“The performance and the management of the Letter of Credits cost the country, not only huge financial losses but also national dignity and credibility in the eyes of the region and the world,” it said.