Govt to plead to banks on behalf of traders caught in S. Sudan unrest

Mar 28, 2019

In 2010, Government of South Sudan verified loss claims of Ugandan traders, leading to a memorandum of understanding with Uganda for a phased settlement of $56m (about sh207b)

The government has pledged to help South Sudan traders by pleading with commercial banks with claimant loans to reduce the pressure exerted on them as they wait for their compensation from the South Sudan government.

The pledge was made by David Bahati the state minister for finance while appearing before the parliamentary select committee investigating the controversy surrounding compensation of several traders who suffered losses during the South Sudan conflict.

This was prompted by directors of 23 companies that claim to have been left out on the $41m (sh150b) payment who while appearing before the same committee called on the Central Bank to halt commercial banks with claimant loans from charging interests and levying other forms of penalty as they wait for compensation.

Of the sh150b compensation, the government last month released a sh40b partial payment to only 10 companies, leaving out the 23 which has sparked discontent.

The traders led by their chairperson Geoffrey Okwi told Parliament last week that the banks have started auctioning their property and other tough penalties yet they have not yet reclaimed their lost investments.

As brought to the minister's attention by the committee chairperson Anne Marie Nankabirwa (Kyankwanzi Woman MP) yesterday, Bahati said that they will offer "comfort" to the banks by letting them in on the processes and steps being taken to have the claimants compensated so as they can service their loans.

"The problem is when you moved to pay 10 companies first, other banks got impatient or they did not understand, that is a prayer also extend that assistance to the companies which you really know are in the categories that will be compensated upon going through the processes so that the banks can still give them some relief," Nankabirwa appealed.

Bahati said, "If our recommendation can help save the situation, I will be very much willing to help. We shall handle this case by case."

Bahati, however, said the 23 companies were initially not in the memorandum of understanding between the two governments stating that these names came up on the floor of parliament when some MPs brought up other companies that they had also been verified and should, therefore, be added onto the agreement.

"So were you comfortable with the outlandish addition of those companies?" asked Mathias Mpuga (Masaka Municipality)

Bahati said he was hesitant but had no option since this came from parliament, he said that he wrote to the Attorney General William Byaruhanga seeking guidance on the resolution passed by parliament, who in turn advised him to stick to the agreement which had the 10 companies as they subject the rest for verification from both the government of Uganda and South Sudan.

The MPs revealed that prior to the parliament resolution, Cabinet had already directed the ministry of finance to effect compensation of 23 companies under category 2 to a tune of $33.6m (about sh122b).

Bahati who was tasked to forward minutes of the said cabinet meeting assured the committee that government is working around the clock to ensure that these traders are compensated.

"If the government of South Sudan has failed to respond to us, we will go there next month with all the information from the ministry of trade and a list of all these companies to have this issue sorted once and for all," Bahati said.

In 2010, Government of South Sudan verified loss claims of Ugandan traders, leading to a memorandum of understanding with Uganda for a phased settlement of $56m (about sh207b) that the traders were demanding however, South Sudan managed to pay only $15m (about sh55b) to 10 companies, leaving a balance of $41.6m (about sh150b).

Subsequently, Uganda signed a bilateral agreement with South Sudan for the latter to pay off the sh150b balance and await reimbursement from the former, however, Parliament while approving the agreement, said that payment should only be made with an addendum of 23 companies to the list of 10.

In October last year when President Yoweri Museveni addressed South Sudanese at the commemoration and celebration of the Khartoum peace agreement at the John Garang Mausoleum in Juba, he said the conflict in South Sudan cost Uganda $500m (about sh1.8 trillion) in revenue.

(adsbygoogle = window.adsbygoogle || []).push({});