South Sudan Corruption Report

The police is widely perceived as corrupt and ineffective and thus presents businesses with high risks (HRR 2015). There have been a number of reported instances of police acting with impunity and demanding bribes in varied aspects of their operations (HRR 2015, HRR 2013). In the same vein, almost half of citizens find the police be corrupt, and abuse among officers is rarely investigated (GCB 2013, HRR 2015). The police are undermined by a lack of funding (BTI 2016). Almost half of firms in South Sudan pay for security and approximately a quarter find that crime and disorder are a major constraint to doing business in the country (ES 2014).

The public services sector carries high corruption risks for business. More than a third of companies expect to give gifts or other irregular payments to government officials to obtain an operating license (ES 2014). Likewise, almost four in every ten surveyed companies expect to offer gifts to officials in order to ‘get things done’ (ES 2014). Recruitment to government positions is based on loyalty to the ruling party rather than merit and the lack of monitoring has left room for corrupt officials to siphon public funds, which would typically come from the employment of ghost workers to inflate public payrolls (FitW 2015).

The total cost and number of procedures and the length of time necessary to start a business and to obtain electricity in South Sudan are among the highest and longest in the world (DB 2016), indicating a high risk of encountering corruption when dealing with public services in the country. Businesses report it being difficult to know how much license and certificate fees should cost (ICS 2014).

Companies face high risks of corruption when dealing with land authorities in South Sudan. Almost half of all businesses expect to give gifts to officials when applying for a construction permit (ES 2014). Property rights are not well protected and customary land use rights have been replaced by more formal laws, leading to conflict in many communities (BTI 2016, BTI 2014). Several other reasons undermine the effective protection of property rights in South Sudan: People in power often trespass property regulations, local elites often engage in disputes with foreign companies over concessions, and property registration as some plots have various legitimate owners who have been accorded ownership from the same or different government entities (BTI 2016).

As of 2015, there were no clear regulations for businesses on how businesses can acquire land; some businesses go about it by leasing land from the government while others lease land from individuals or local communities (ICS 2016). However, land negotiations with communities may take several months to settle (ICS 2016). South Sudan ranks among the countries with the highest averages of time and cost required to register property in the world (DB 2016).

Companies contend with high corruption risks when dealing with the tax administration. More than three in every ten businesses expect to offer gifts during meetings with tax officials (ES 2014). On a more positive note, however, South Sudan performs better than the average in Sub-Saharan Africa in relation to paying taxes (DB 2016).

Businesses face high corruption risks when dealing with the customs administration. There is no law governing customs in South Sudan and trade conditions are generally not favorable to companies (ICS 2016). Almost four in every ten businesses expect to offer irregular payments and gifts to obtain an import license (ES 2014). Furthermore, businesses complain about shady taxes imposed on imported goods into the country (BTI 2016).

South Sudan ranks among the least performing countries in the world when it comes to the ease of trading across borders; with time and cost averages higher than in other countries in Sub-Saharan Africa (DB 2016).

Corruption is considered a problem in South Sudan’s public procurement process and presents business operating in the sector with very high risks. More than a third of companies expect to give gifts and other irregular payments to government officials to obtain public procurement contracts (ES 2014). Furthermore, businesses depend to a large extent on connections in the government and the military – as these are the main contractors-, bribes and other corrupt means to win public contracts (BTI 2016). Public officials often circumvent or influence procurement procedures, suggesting high rates of favoritism in the sector (BTI 2016). Accordingly, companies partially or fully owned by government or military officials are more likely to win public contracts regardless of the quality and price of their services (ICS 2016).

Thus, companies are recommended to use a specialized public procurement due diligence tool to reduce corruption risks related to public procurement in South Sudan.

The natural resource and extractive industries is rife with corruption and companies should be diligent when operating in this sector. The opaque management of the country’s oil resources has allowed for high-ranking officials within the government to siphon funds with impunity (FitW 2015). In 2012, President Kiir accused three-quarters of former and current officials of stealing USD four billion and ordered the money be returned to government coffers, yet no further action was undertaken in the case (FitW 2015).

Companies operating in South Sudan’s oil sector face interference by the government, and corruption is a major factor limiting investment in the country’s natural resources sector (BTI 2014). The Petroleum Act 2012 has anti-corruption provisions, but the Act is poorly enforced (Sudd Institute, Apr. 2015).