South Sudan hunts missing grain in suspected graft probe

By Skye Wheeler

JUBA, Sudan (Reuters) - South Sudan's finance minister said he was trying to track down hundreds of millions of dollars worth of missing grain deliveries, at the heart of what could be a massive case of mismanagement or corruption.

The news comes at a sensitive time for the under-developed region, where the United Nations has appealed for food aid, warning 1.2 million people may face severe hunger this year following poor rains.

It will also raise questions about financial controls in the oil-producing territory, ahead of national elections due in April 2010 and a referendum on whether south Sudan should split off as an independent country in 2011.

Finance minister David Deng Athorbei said an investigation had found his predecessor at the ministry had issued hundreds of grain contracts worth a total of 6.2 billion Sudanese pounds in 2008.

The discovery had come as a surprise, said Athorbei, because the former minister had not informed the south's parliament about the size of the planned purchases -- and because south Sudan did not have nearly enough money to honour the agreements.

The entire annual budget for south Sudan's semi-autonomous government is only around 3 billion Sudanese pounds.

Former finance minister Kuol Athian told the south's parliament last year he was stockpiling grain to ward off future hunger in the war-torn region, but did not give full details. He was removed in a re-shuffle in June and replaced by Athorbei.

Athorbei said the same investigation had found the finance ministry had eventually only managed to pay traders $200 million to honour some of the contracts for sorghum and maize.