Article from The Independent Uganda
Dated 05 August 2019
South Sudan billions excite Uganda traders
But fight erupts as `Super 10’ run off with compensation monies
Minister of State for Finance David Bahati (R) appearing before the select parliamentary committee on the payment of claims by the Uganda South Sudan traders.
Kampala, Uganda - Muhammad Abdullah Besimira first went to South Sudan in 2007 on a job with his company, BMA Constructions and Fabrications Ltd. He says he got a deal to construct government buildings and ministries in Jonglei State in the Greater Upper Nile Province. At the time, South Sudan was still part of Sudan.
By 2010 Besimira’s company had accumulated payment arrears pending with the government but he kept slogging away, hoping he would be paid. At the time, many Ugandan business people were in the same spot. They had payment pending from the South Sudan government.
But then in 2011 South Sudan broke away from Sudan and in 2013 civil war broke out between forces loyal to President Salva Kiir and those loyal to his former deputy Riek Machar. Besimira and most of the business people fled back to Uganda.
“After the war, I was called back by the State Minister of Finance (South Sudan),” Besimira says. He resumed work and continued demanding payment. But he says he was always told the money the central government would send money to Jonglei would not be enough to enable him to be paid. Then in 2016 war erupted again. Besimira says he and thousands of other Ugandan traders were evacuated in trucks by Ugandan Army soldiers.
“That time, we were just picked and you could not leave with anything,” he says.
He never returned to Sudan. Instead, he and other Uganda business people have resorted to seeking compensation for money they lost.
He is part of an organisation called the Joint Action Redemption of Ugandan Traders in South Sudan. Its members did a range of services from construction to petty trade in South Sudan. This group includes those who were injured during the clashes and those who lost their loved ones.
Formed in 2008, it says the government of South Sudan owes them over $200 million (Approx.Shs740 billion). But in a major twist, they are now not asking for the money from the government of South Sudan but from the government of Uganda.
The arrangement is a result of an agreement signed on December 22, 2016 between the governments of Uganda and South Sudan. In the agreement, the government of Uganda agreed to pay a group of Uganda traders, now called the Super 10, US$41 million (Approx.Shs150 billion) that South Sudan agreed to reimburse. It was also agreed that a joint verification team consisting of officials from both Uganda and South Sudan would be formed to verify or confirm all other claims for subsequent settlement.
Parliament, as required by law, adopted the agreement on April 03, 2018.
But it added an addendum to the agreement that included another “additional verified 23 Uganda -South Sudan traders”. It also added that the joint verification exercise by the government of South Sudan and Uganda “continues until all claims are conclusively handled”. That appeared to have left the door open for new claimants to enter and might explain the many lists of claimants.
The matter became heated after Parliament in May approved payment of Shs947 billion to 82 Ugandan companies that supplied goods and services to South Sudan. Apparently, the government of South Sudan has approved payment of Shs778 billion to 40 companies and Shs169 billion to another 42 companies.
The super 10 and the rest
It is a complicated process with many twists and turns and allegations of corruption. It appears there are business people who deserve payment but are not paid and others that do not deserve payment but are paid. It has sparked a faceoff between the Ministry of Finance and the Ministry of Trade, the Office of the Prime Minister (OPM), and Parliament. There is even talk of the `Super 10’, a list of claimants that gets paid over and over.
The ‘Super Ten’ is a group of companies run by well-connected businesspeople who have received compensation in two batches. It includes Rubya Investments, Kibungo Enterprises, Aponye (U) Limited, Afro Kai Ltd, Swift Commodities Establishment Ltd, Sunrise Commodities, Ms Sophie Omari, Apo General Agencies, Ropani International and K.K Transporters.
Some reports indicate that some of the companies share directors while others; like Swift Commodities Ltd are reportedly out of business.
Apollo Nyegamehe, commonly known as Aponye, who is the leader of the group told The Independent that their demands are legitimate.
According to him, their claims stem from grain supplies they made to the government of South Sudan. Unlike some of the other claimants, they were dealing directly with the top brass of the southern part of Sudan led by then vice president Salva Kiir.
“We got paid $14.8 million (Approx.Shs55 billion) in December 2011 and we received another Shs40 billion (Approx. $10 million) in April 2019,” Nyegamehe says.
Meanwhile others like Besimira keep waiting.
“We have made endless trips to the ministries of Finance and Trade of Uganda in search of compensation but all in vain,” Besimira told The Independent.
He says the government of South Sudan owes his company US$279,445 (Approx.Shs1 billion).
On February 27, 2017 he submitted compensation claim documents to both ministry of Trade and Finance. Since then he has been on a rollercoaster trying to get a penny.
In October 2018, he and fellow traders met Trade minister Amelia Kyambadde but the meeting bore no fruit in spite of her promising the lot that all would be well by February this year.
“They keep saying verification,” he says, “When they talk about verification, they are sending us back five years,” Besimira says of the process.
“They are asking us for too many documents, some banks like Liberty Bank in South Sudan closed and we have already spent way too much in the process of gathering all these documents.”
Some of the claims for compensation go back over 10 years, many lack proper documentation and the claimants are in many groups and their lists keeps changing. The list that had the Super 10 had 33 claimants in total. But an initial list, compiled in 2011 by the Ministry of Trade had 84 claims. And the latest list, compiled by the Parliamentary Select Committee and officials of the South Sudan government has 38 companies. Then the South Sudan government approved 82 companies.
The Minister of Trade, Industry and Co-operatives, Amelia Kyambadde, fueled speculation of corruption when she told the verification select committee led by Kyankwanzi District Woman MP, Ann Maria Nankabirwa, that her ministry verified 36 businesses and not the 23 traders that the Ministry of Finance submitted to Parliament.
“The list we have is what we verified; if anyone has a different list, then they manipulated it. We submitted the list to the Ministry of Finance, which never got back to us. It is Finance that submitted the list to Parliament, so they should account for the list they submitted,” Kyambadde said.
But Nankabirwa told The Independent that they zeroed on 38 companies that were entitled to be compensated. Her committee travelled to South Sudan and Kenya to verify their claims and she now blames the Ministry of Finance; especially Muhakanizi, for failing to pay the traders.
“Our traders have suffered. They have gone to the bank and borrowed money, others have mortgaged their assets,” she said, “Ernst and Young is working for who? Ministry of Finance has taken these people in circles for ten years.”
To verify or not
Faced with the accusations of corruption and many contradicting compensation claims, the Secretary to the Treasury, Keith Muhakanizi who must authorise the payment, is demanding verification.
He is specifically pushing for Ernst and Young; the international accounting firm, to verify claims. But his insistence is opposed by almost everyone, including Minister of State for Finance David Bahati, some of the traders and MPs.
When The Independent asked Muhakanizi why he is insistent on Ernst and Young doing the verification when a select parliamentary committee formed on March 6 had verified the claims of traders, he said “they did a good job on verification of domestic arrears”.
But some MPs and the Speaker of Parliament, Rebecca Kadaga, say the Ministry of Finance should not be insisting on re-verification of compensation claimants when, in their view, this exercise was considered closed after a joint committee of parliament and officials from the government of South Sudan carried out verification.
In a plenary session, Kadaga asked Minister Bahati: “How long are Ugandans going to suffer because of our inefficiency and corruption? When shall they be paid,” Kadaga asked in a recent plenary session.
She said parliament budgeted for the compensation money based on the verification it did.
“So what is he looking for?” she asked Bahati, “We cannot go on like this.”
Kadaga was at the time referring to Muhakanizi’s deputy, Patrick Ocailap, who put out an advert in the newspapers announcing verification of traders’ claims when Muhakanizi was on sick leave early this year.
Kadaga insisted on the traders being paid as soon as possible because parliament appropriated Shs76 billion but it has proved difficult to get it from the coffers of the Ministry of Finance.
But Bahati has been accused of pursuing personal interest. He reportedly has three companies; Kaimat Enterprises, Jan Jang Company Limited, Nile Site Company seeking compensation from South Sudan. On March 23 he was asked by the parliament’s Select Committee handling the compensation to refute the allegation but he did not.
“Even if I owned a company in South Sudan, I wouldn’t accept to be part of the on-going compensation process,” he told the committee, “So I would really request madam chair that those who are crying for me should leave me.”
Rashid Manafwa, the chairman of the Joint Action Redemption group says the contentious issue of verification started when Amelia Kyambadde, Minister of Trade, commissioned a Trade Arbitration Dispute Committee in August 2011. The seven member team was headed by businessman Omar Kassim who passed on in 2017.
Then the committee received 84 claims and according to some minutes seen by The Independent, the claims had clear documentation in form of contracts and other relevant support documents. But from the time of the Kassim committee, the traders have dealt with roadblock after roadblock.