The Observer (Kampala)

18 February 2014

Uganda: Traders Want Uganda to Pay S. Sudan Govt's Debt of U.S. $41 Million

Photo: Samara Scott/U.S. Army Africa
East Africa member states criticise Uganda for sending its army to fight alongside S. Sudan forces (file photo).

City traders are still waiting for the government of Uganda to pay up $41m that the government of South Sudan owes them for buying grain almost four years ago.

Traders say they supplied the S. Sudan with maize and sorghum worth $56m (Shs 140bn) between 2008 and 2010. The South Sudan government only paid up $14.8m (Shs 37.3bn) of the total, and requested for more time to clear the debt.

But after paying the first schedule, the South Sudan government defaulted, forcing traders to petition Parliament to make the Uganda government to pay off the debt since it was the guarantor. A committee was set up by MPs to look into the matter.

Its report recommended that South Sudan pays up the outstanding $41m (Shs 104bn) without further delay. Members from the Uganda-South Sudan grain Traders Association (USSTSAL) and Uganda Traders Association of South Sudan (UTASS) say that the debt is overdue and since the government is involved, it should be the one to pay.

Traders say it is now four years and there has not been a solution to their plight. Chris Kaijuka, the chairman of USSTSAL, said the failure by South Sudan to pay money had brought a lot of suffering on traders; some have defaulted on their loans, losing property to either banks or loan sharks.

"Most of the money was borrowed from banks. They [banks] want their money back. Some of the traders have died from stress because of debts and our suppliers have lost trust in us," he said.

The MOU with the government of S. Sudan, a copy of which The Observer has seen, dated November 21, 2011 and signed by the then trade minister Kahinda Otafiire on behalf of Uganda and Ambassador Deng Alor, who was then minister of Regional Cooperation, and David Deng Athorbei, minister of Finance from South Sudan, stipulated on how the traders would be paid.

At a recent press conference at Fairway hotel in Kampala, Kaijuka said South Sudan had now changed tactics and was using different traders who they pay on delivery.

"When we ask, we are told people are at war and there is no money," he said.

In 2008, S. Sudan called for bids to supply grains and cereals for food. Traders from Uganda, Kenya and Ethiopia were chosen and asked to supply the region. It reached a situation, however, when individual companies could not meet the demand. Instead, they formed an association and decided to work through the government.

Origin:

In 2010, South Sudan and Uganda signed an MOU where the details of companies were divulged and the verification of the supplies conducted. South Sudan gave a payment schedule from 2010 and by June 2011 the payments could have been completed. However, the traders say S. Sudan honoured only one payment.

Since the government committed itself to see that these traders are paid, an account was opened at the central bank, with the ministry of Finance tasked to see that the traders were paid.

Traders further argued that since the government was responsible and acted as the guarantor for the South Sudan government, it was only right that it paid up.

Issa Sekitto, the publicist of Kampala City Traders Association, said the issue raised questions about the spirit of trading in South Sudan.

"If a whole government of South Sudan is behaving like this, what do you expect its people who take goods on credit to do? They give bad examples to their people," he said.

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