In January 2016, 10 patients died at the Juba Teaching Hospital in South Sudan because there was no diesel to run the generators, so doctors could not perform surgeries.



The family of one woman who needed an emergency C-section delivery was told to bring a “jerry can” (about 20 litres) of fuel for the procedure.

Patients were turned away unless they could provide the supplies needed for their care, including diesel.

The situation was dire, with some four million South Sudanese in need of health services and nearly 20 per cent of health facilities lacking the resources to provide care.

But even before then, from as early as 2012, newborns would die at an alarming rate in the neonatal intensive care unit at the hospital.

Doctors at the hospital would try to manually ventilate the newborns in vain.
Newborns who needed constant oxygen were at the mercy of whether fuel was available to power the hospital’s generator because the equipment at the ICU needed a 24-hour power supply.

“For the day, someone would supply fuel for the generator. It would work for a few hours, but by 8 pm, darkness,” a South Sudanese doctor said.

These tragedies were avoidable, if only …

Crisis phase
Outside the hospital, things were not any better. About 37 per cent of South Sudanese were experiencing food insecurity, and in July 2015, many states were already in the crisis phase, with a smaller number already in a state of emergency.

By 2016, the country was still suffering severe shortages of key commodities, with the situation so dire that some four million South Sudanese needed health services, but nearly 20 per cent of the health facilities lacked the necessary resources to provide care.

Major shortages in pharmaceuticals, fuel, and food had hit South Sudan partly due to an oil production shutdown that took place in 2012 when the major export route through Sudan was blocked due to a dispute between Juba and Khartoum over oil transit fees.

Being a heavily oil-dependent country, half of South Sudan’s gross domestic product was wiped out, plunging the country into a long-term financial crisis.

At this point, the government came up with an ingenious way to prevent the country from sliding further into the abyss.

Faced with dwindling hard currency and shortages in vital imports, the Bank of South Sudan — the country’s central bank — signed several credit facility arrangements to support efforts to import much-needed food, fuel, and medicine to the war-torn and newly independent country.

Between 2012 and 2015, the government of South Sudan received a credit line of nearly one billion dollars, $793 million from a Qatari bank and $200 million from a Kenyan bank.

The credit line — issued in US dollars in the form of letters of credit (LCs) — was intended to help local traders pay for these imports, considering the extreme shortage of hard currency and the weakness of the new local pound.

The government was supposed to allocate the LCs to traders, who could exchange South Sudanese pounds (SSP) at the then-official exchange rate of 3.16 SSP per dollar.

In turn, the traders would then use the LCs — essentially a guarantee from the bank — to pay the exporter upon confirmation of delivery of the needed goods.

The goal was to provide South Sudanese traders with access to US dollars to import essential goods with the borrowed funds intended to enable companies to import urgently needed commodities such as fuel, food, and medical supplies to sell in the markets at affordable prices.

Credit lines
The credit lines were supposed to be repaid through the oil production that the country was hoping to resume shortly.

The traders who applied and were chosen by the South Sudanese government for the programme were supposed to deposit SSPs with the issuing banks, who would, in turn, provide the traders with US dollar-denominated letters of credit (LCs).

An LC is a standard financial instrument to mitigate risk in international trade.

But rather than achieve the intended outcome, the programme turned into a mega scandal that left a human tragedy in its wake, a three-year investigation by The Sentry, a US-based investigative and policy institution, can now reveal.

The investigation by The Sentry showed that South Sudanese government officials and regional networks of traders gained access to the majority of the LC-backed contracts, obtaining more than $500 million of the $922 million allocated LCs without showing any proof of delivering the essential goods these millions were meant to buy.

The one-billion-dollar credit scam roped in Kenyan banks where hundreds of millions of dollars were transferred through commercial banks in the country with the Kenyan banks adversely mentioned in the saga.