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Uganda to clear Shs150 billion South Sudan debt

PARLIAMENT- Parliament has recommended that the government pays outstanding arrears amounting to $41m (Shs150 billion) to 10 Ugandan companies that supplied maize and sorghum to the government of South Sudan.

The 10 companies, under the Uganda South Sudan Grain Traders and Suppliers Association Ltd, supplied maize and sorghum to 10 South Sudan states under the Strategic Grain Reserves Suppliers for $56m (Shs205 billion) between 2008-2010.
Under the agreement, the money was to be paid in five instalments.

However, the South Sudan government only paid the first instalment of $15m (Shss55 billion), leaving a debt of $41m (Shs150b) following a bloody civil war broke out between forces loyal to President Salva Kiir and his exiled former vice president, Dr Riek Machar.

South Sudan has remained unstable since then.
To resolve the problem that has persisted for over five years, Parliament’s Committee on National Economy, after inquiries into the dispute, recommended that government of Uganda pays the balance of $41m (Shs150 billion)to traders who have been verified under their association, on behalf of the South Sudan government.

The South Sudan government, according to the recommendations by MPs, will then pay back the money to Kampala, based on a repayment schedule agreed upon between the two governments in a five-year Bilateral Agreement that runs from 2O18- 2022.

It is, however, unclear how the Finance Ministry will proceed with the MPs recommendations which come after President Museveni directed the Finance minister, Mr Matia Kasaija, to study how government could raise money to rescue the business persons who supplied goods to South Sudan.

In a March 22, 2016 letter, Mr Museveni wrote: “…then, the government can continue with its efforts to recover the money from South Sudan government. The fund should be run transparently so that the only people authenticated by the South Sudan government are the only ones to be paid.”

MPs on Tuesday warned that the compensation of the traders will not be resolved since another consortium of traders; the Joint Association for Redemption of Ugandan Traders in South Sudan that consists of hundreds of traders presented diverse claims amounting to $5.928(Shs18 billion) that was, however, unverified.

The group’s unpaid claims that were supported by relevant documents amounted to $ 8.288m (Shs30 billion).

Aringa North MP Godfrey Onzima questioned the methodology used in the verification process by the ministry and warned that paying only 10 firms will not help.

“Government should look for money to pay all the traders because they all made loses,” Mr Onzima said.

Nakaseke South MP, Mr Semakula Luttamaguzi said the burden of the debts is being felt by many Ugandan companies and warned that singling out only 10 companies may not be a solution to the problem.

“Fairness has to be considered. The small companies should also be verified so that they get paid. In business, even small companies incur losses, the loss for the small and big companies is equal depending on the size of their capital,” Mr Luttamaguzi said.

But Prime Minister Ruhakana Rugunda insisted that the payments will have to be “phased” because of the critical verification process.

“We must deal with this matter comprehensively but in a phased manner because verification is very important. Therefore, all those companies that were verified by both the Uganda government and South Sudan will be paid. Eventually, the South Sudan government will reimburse,” Mr Rugunda said.

THE 10 COMPANIES TO SHARE THE SHS 150B
Rubya Investments Limited $2.4m
Kibungo Enterprises $9.7m
Aponye (U) Limited $13m
Afro Kai Ltd $2m
Swift Commodities Establishment Ltd $811,345.99
Sunrise Commodities Ltd $928,991.16
Ms Sophie Omari $802,26.15
Apo General Enterprises $3.2m
Ropani International $3.2m
K.K Transporters $4.8m

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