How South Sudan’s wealthy park their assets outside the country

How South Sudan’s elite park their assets outside the country
The UN refugee camp at Malakal © Eyevine

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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 to their families — and themselves — outside the country.

Little wonder, perhaps. The people of South Sudan spent decades fighting a war of secession with the Khartoum government to the north, only to plunge into its own civil war soon after winning independence in 2011. In the past two years, more than 2m people in a nation of 12m have fled death and ethnic atrocities. An August peace deal may see 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 impact of oil revenues, aid dollars and an unhealthy dose of 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, is among them. Every month he sends thousands of dollars to his family in Kampala.

“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, three of whom are of school age, can get a good, safe education that poorer South Sudanese 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 dishevelled Juba 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. One regional 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 (CPI) last year, worse than Iraq, Pakistan and Bangladesh.

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.”

President Salva Kiir in the capital Juba

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 told the Financial Times last year as diplomats pressed for sanctions.

In Kenya’s capital Nairobi, South Sudanese number plates are commonplace on the four-wheel drives that circulate the leafy suburb of Lavington. The Kenyan government has also put up South Sudanese politicians in an elegant hotel, while the Ethiopian government hosted months of peace talks.

Even so, the streets of Juba bear the marks of much change over 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 roof-top cigar rooms to serve the country’s elite; businesses from insurance to banks make record profits. At the Da Vinci restaurant, couples chat and pose for family snaps beside a river, sipping beers as the sun goes down.

Car dealerships are still doing a decent trade, but they remember wistfully the best of the good old days, when the new government of 2011 put in orders for dozens of new vehicles at a time for ministers and senior civil servants. Even today the odd Hummer hugs the streets and parks up outside late-night bars. But friends of the owners caution it is a fragile show of wealth: many live in run-down homes and can no longer afford the cars’ upkeep.

In a country marked by decades of war, still home to an inflated army consisting of hundreds of generals, many former fighters at the helm have also always professed the ease with which they are prepared to “go back to the bush”.

“We are now spending less and it means we can live within our means,” says a senior military officer. He offers this unlikely belt-tightening theory to help dismiss the significance of a dollar crisis so acute that foreign-built factories and formal businesses have this year started to close.

“This austere style of economy that we have to have now is better for us,” he adds.

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