October 28, 2009 / 2:36 PM / 8 years ago

South Sudan hunts missing grain in suspected graft probe

* South Sudan probes missing grain deliveries

* Could be mismanagement or corruption, minister says

By Skye Wheeler

JUBA, Sudan, Oct 27 (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 ($2.7 billion) 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.

But now a fresh mystery had emerged, he said, because finance ministry officials could not find clear records on which grain traders had received the $200 million, or whether the bulk of the grain was ever delivered.

Findings of his investigations would be passed to an oversight committee at the south’s parliament, he told Reuters.

“The committee will decide whether this was intended corruption or good intentions with mismanagement ... it could be either,” he said in an interview.

Senior south Sudanese officials told Reuters the case was widely suspected to involve corruption and Athorbei said his team had heard such allegations.

“$200 million was paid out but we don’t know where it went ... There are people who were paid and they have not delivered grain, this is true. There are people who delivered grain and they have not been paid ... It is so complicated,” he said.

“People say ... some staff in the states actually were involved in a racket -- (that) they go and give their signature for what was not delivered. This is what we want to find out.”

The minister said he had sent investigators to each of the south’s ten states to look for the grain. The teams found only small amounts in scattered locations and were told some had been given away, sold or left to rot, he said.

The minister most of the original grain contracts had been taken by South Sudanese traders who had reportedly sold them on to businessmen in Kenya, Uganda and northern Sudan.

South Sudan has since signed a “Juba Compact” with donors, promising to tighten controls.

The region won its own government and the promised secession referendum in a 2005 peace deal that ended two decades of civil war with north Sudan.

Editing by Andrew Heavens

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