South Sudan’s elite make their money and run

December 8, 2015, 4:39am

Once the site of makeshift schools such as this, Juba is starting to rebuild itself — but South Sudan still faces problems such as poverty and corruption. Picture: REUTERS/JOK SOLOMON

Katrina Manson, The Financial Times Limited on Business Day Live  

THE most conspicuous feature of South Sudan’s elite is its absence. The newest country in the world is in dire need of committed, educated nation builders. But many of its most wealthy citizens park everything, from their assets, families and even themselves — outside the country.

The people of South Sudan spent decades fighting a war of secession with the Khartoum government to the north, only to plunge into an own civil war soon after independence in 2011.

In the past two years, more than 2-million people in a nation of 12-million have fled death and ethnic atrocities. An August peace deal may see the government and rebels form an interim joint administration, but even if that comes off, trenchant poverty and insecurity will pervade for years.

Alongside that, due to reduced petroleum output because of fighting, a bad deal agreed with the north, and falling world prices, the oil-based economy is shattered. Without incoming dollars to sustain central bank reserves, the currency is now in meltdown.

Yet many have found a way to make money, thanks to the combined effects of oil revenues, aid dollars and corruption. Many are even proud that South Sudan is one of the few African countries that, on balance, sends millions of dollars out to its diaspora, rather than relying on remittances sent in from abroad.

Lual Malok, a businessman who rents out warehouses and offices in the capital Juba, sends thousands of dollars to his family in Kampala every month.

"I have four kids; these are from my first wife. Then I have two younger kids with my second wife. She’s here," says Malok, whose business supports them all.

Like many South Sudanese, his first wife lives in neighbouring Uganda so the children can get a good, safe education they cannot hope to access at home.

"For renting, I have to pay $1,100 per month, then for the food I send another $1,000, plus every three months, I send $3,200 for school fees," says Malok in his office. "All the business people here are the same: they transfer money out to their families, especially for school fees; that is a must."

Underdevelopment at home is only part of the explanation. A diplomat involved in protracted peace talks describes the South Sudanese leadership as "shameless looters who are living in luxury while showing breathtaking indifference (to their people)".

South Sudan was ranked 171st of 175 countries in Transparency International’s annual corruption perceptions index last year.

The rot set in early. Within a year of independence, President Salva Kiir declared officials had already stolen horrifying amounts from the fledgling state. "An estimated $4bn is unaccounted for or, simply put, stolen by former and current officials, as well as corrupt individuals with close ties to government officials," he wrote. "Most of these funds have been taken out of the country and deposited in foreign accounts. Some have purchased properties, often paid for in cash."

An investigation commissioned by Avaaz, an online campaign group, indicates South Sudan’s top leaders move considerable property and banking assets outside their own country, into East Africa, the Middle East and Europe.

"While South Sudan goes up in flames, the families of the elite enjoy a luxurious lifestyle outside the country subsidised by endemic corruption of state coffers," Sam Barratt at Avaaz said.

In Kenya’s capital Nairobi, South Sudanese number plates are commonplace on the sports utility vehicles that circulate the leafy suburb of Lavington.

Even so, the streets of Juba bear the marks of much change in the past 10 years. While the city was once a dustbowl in which the only accommodation comprised shacks, tents and containers, today it has high rises and even higher hopes.

Developers speak of creating rooftop cigar rooms to serve the country’s elite; businesses from insurance to banks make record profits.

Car dealerships are still doing a decent trade, but they remember wistfully the best of the good old days, when the new government put in orders for dozens of vehicles at a time for ministers and senior public servants. Even today, the odd Hummer parks up outside late-night bars.

The Financial Times Limited 2015