Home | News    Friday 12 June 2015

S. Sudan’s Central Bank declines to handle letters of credit

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June 11, 2015 (JUBA) – The governor of South Sudan’s Central Bank, Kornelio Koriom, has advised the country’s lawmakers against returning the management of letters of credit under the bank’s authority, saying the beneficiaries threaten to “kill” if not awarded.

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Kornelio Koriom, South Sudan’s Central Bank Governor addresses journalists in Juba, 11 September 2012 (ST)

Appearing before members of the National Assembly, Koriom said the letters of credit, which are meant to enable traders access United States dollars from commercial banks to enable it import basic items such as food, fuel and medicines caused problems to the Central Bank before it was transferred to the finance ministry in 2012.

“Everybody who has never gone out of this country wants the LCs [the letters of credit] and want to be an importer,” the governor told lawmakers on Tuesday.

“But not every trader can be an importer. Even he who doesn’t know the A, B, C of the foreign trade will almost kill you if you say no. So it is not an easy thing,” he added.

A parliamentary investigation presented to the country’s lawmakers showed discrepancies in awarding the much-sought letters of to business people and government institutions, totaling over $600 million between April 2014 to April 2015.

Goc Makuac Mayol, the parliamentary specialized committee of finance, who tabled the report to legislators, said the ministries of trade, finance, health, petroleum and agriculture were the main beneficiaries. Petroleum and trade ministries took forty per cent each and twenty per cent is distributed between the other ministries.

Mayol said the parliamentary findings unearthed several controversies and lack of supervision from the ministries of trade and finance on traders awarded LCs to import goods from neighboring countries.

“The [parliamentary committees noted that the origin of the problem of the LCs is rooted in the absence of the single reporting authority which means that no joint report and assessment was made on who received the LC and who do not,” said Mayol.

State governments are also entitled to letters of credit to enable their traders import goods.

For instance, Central, Western and Eastern Equatoria states each are reported to have received $3million. The country’s other states like Lakes got $3 million while Warrap took $1.9 million. Northern Bahr-el Ghazal state reportedly obtained $2million with Unity State taking $15millions, Jonglei taking $5millions and Upper Nile being allicated $10millions.

There are records for Western Bahr-el Ghazal, according to MPs report. More than 100 companies from the states are allegedly awarded those LCs but good were never delivered, leaving market shelves empty and prices skyrocketing nationwide, MPs said.

The five committees tasked to investigate the issuance of LCs recommended that the management be returned to Central Bank from the ministry of finance.

Several lawmakers said the audit by South Sudan’s anti-graft body, the Audit Chamber, should be launched immediately and report return to parliament within 60 days.

Koriom said return the LCs to his authority would make success only if the number of companies and individuals seeking U.S dollars is reduced to very few people.

“The rest of people (traders) can take (buy goods) from here, if things are brought to Juba and take to wherever (part of the country) they want,” he said.

He also revealed that foreign traders “are moving out their capital. When they are moving out their capital and we shall never see those dollars.”

“It is a loss and that is what is called capital flight,” he said.

MPs launched an investigation last month following a motion moved by a lawmaker regarding the surging of prices in the market across the country. Traders said at the time said hard currencies were lacking as the ones in black market were expensive.

(ST)

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  • 12 June 2015 07:11, by Ahmed Chol

    This country will never get up on the group given this system. Why don’t we think of ways of manufacturing goods instead of importing for the whole of our life time on earth? Foolish indeed.

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    • 12 June 2015 09:13, by Ayuen deng

      Letter of Credit is wide window of corruption in South Sudan i think it should be close to avoid further damage to our country and the government to agree with Sudan,Ethiopia,Kenya,Uganda and the rest of the world to bring life saving goods to sell them in Pounds to our traders and they will be the one to be buying the Dollar from central bank only.

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  • 12 June 2015 07:14, by Mi diit

    "For instance, Central, Western and Eastern Equatoria states each are reported to have received $3million. The country’s other states like Lakes got $3 million while Warrap took $1.9 million. Northern Bahr-el Ghazal state reportedly obtained $2million with Unity State taking $15millions, Jonglei taking $5millions and Upper Nile being allicated $10millions."

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    • 12 June 2015 07:16, by Mi diit

      That above break down in distribution of benefits will clearly tell you that it was not about trade but about politics and war. States of Upper Nile region for the first time got the lion’s share, if that is true, and this is to buy hearts of those politicians and generals to support the government in the war against Riek Machar’s democracy.

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      • 12 June 2015 07:18, by Mi diit

        Before the war it was Bahr el Ghazal region that always got the lion’s share in corruption, whether by contracts, Letters of Credit (LCs) or Dura Saga.

        But now the calculation has changed to buying support from the Upper Nile region’s politicians and army generals who use the LCs to get access to foreign currency (dollars) and put in their foreign bank accounts abroad.

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        • 12 June 2015 07:21, by Mi diit

          What always happens in the Central Bank or ministry of finance is not promotion of trade, but promotion of corruption for self-enrichment. The beneficiaries strike deals with officials who give them LCs so that the acquired dollar currency is divided and resold in the black market. That is what that business is all about. It is not about import as lied for by the governor of Central Bank, Koriom.

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          • 12 June 2015 10:26, by Lango2010

            Midit
            you may be right at a wrong time, what we discussing here is corruption, and corruption is an enemy of everybody, and here in South Sudan everyone is corrupt only God knows. those who rebel were among the list of 75 Officials with 4 billions Dollars of innocent South Sudanese, others are still in government today; every tribes is involves no doubt.

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            • 12 June 2015 11:05, by Lango2010

              no one is worthy in this nation, and because of that we paying for the prices of our inequity. wrath of God is upon us all, i only carry for the innocent one. but let the makers faced it to the end.

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              • 12 June 2015 11:14, by Lango2010

                No where in this planet is body displayed in the market like and other necessity goods but in South Sudan. if there are no dollars in the hand respected traders where do this illiterate people get their dollars always, this so that the level of corruption is rooted in the heart of Southerners, those who talk against it are the one practicing it. what the law makers doing?

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  • 12 June 2015 07:34, by Kerem

    Lakes State has seen that money in the government stores where food is stored but the challenge is still there. Common woman or man who live below poverty line cannot access the food but you see government vehicles coming and loading hundreds of bags. A common person take more than a week to get 50kgs bag of flour

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