3-year investigation exposes corruption in South Sudan government-backed loan

JUBA, FEBRUARY 21^st 2023 (SUDANS POST) – A three-year investigation by the Washington-based investigative initiative – The Sentry – into a South Sudan government-backed financial loan deal between a local firm and the Cairo-based Afreximbank has exposed illegal practices violating bother South Sudan and international laws.

The report titled “Crude Dealings: How Oil-Backed Loans Raise Red Flags for Illegal Activity in South Sudan” sheds lights on how a 2018 deal between Trinity Energy Limited and African Export-Import Bank (Afreximbank) resulted in bribery, money laundering, and circumvention of international sanctions imposed on the world’s youngest country.

“As part of the deal, the government of South Sudan committed to award cargoes of crude oil to Trinity Energy. The deal skirted legislation on oversight, transparency, and competition and facilitated off-book government spending,” The Sentry said in the report released today.

“The loan deal also perpetuated a damaging reliance on future oil production to finance current spending, a pattern that has locked the country in a spiral of debt …… This deal contributed to mortgaging the future prosperity of the country and its citizens,” it added.

“SECRET DEAL TO SUPPLY THE ARMY”

The report also found that Trinity Energy in an arrangement amounting to at least $1 million per a month supplied the South Sudan People’s Defense Forces (SSPDF) – then known as the Sudan People’s Liberation Army (SPLA) – with fuel at a much higher price that generated an additional benefit of $300,000 for the company.

“Between June 7, 2018, and October 1, 2018, Trinity Energy supplied the Ministry of Defence with close to 3 million liters of diesel and gasoline at a total cost of $4.2 million. Trinity charged the Ministry of Defence $1.40 per liter for the fuel. This is 26% more than the average price Trinity Energy charged its nine other clients during the same period, all of whom paid between $1.11 and $1.17 per liter,” it said.

“The markup in prices generated more than $300,000 a month in additional profits for the company. A former Sudan People’s Liberation Army (SPLA) officer told The Sentry that he was instructed by Minister of Defence Kuol Manyang Juuk to purchase petroleum from Trinity Energy at inflated prices. When the officer protested that the price quoted by Trinity Energy was too high, he was overruled,” it added.

Biswick Kaswaswa, Trinity Energy’s former finance manager told The Sentry that the government procurement of fuel supplies for the army from Trinity Energy was done in a transparent manner, and was largely done in what he referred to as “boardrooms”.

“There was no competition for the fuel supply contract to the government,” he is quoted by The Sentry as saying. “The awarding of contracts was done in boardrooms, there was no proper procurement process, no proper evaluation, no system to ensure the contracts were fair. It was a team of people giving out the contracts. There was no fair competition on the market.”