The tragedy of Ugandan traders in South Sudan

South Sudan has been the Promised Land, the virgin market overflowing with business opportunities and well-paying jobs in international organisations. And the evidence suggests there is a truth to it. Uganda pockets at least $500m (Shs1.3t) of revenue from South Sudan, annually.

But, just like the farmers in John Steinbeck’s novel, The Grapes of Wrath, some Ugandan traders have similarly sojourned up north in search of this economic promise, only to find the tragedy of economic loss, personal injury and death. They claim they were defrauded in business deals by South Sudanese individuals and institutions, to the tune of more than $60m (Shs150b). Some have been killed, loved ones have gone missing and some have had their properties, like trucks, impounded.

And in a situation where counter claims of fraud, death threats and outright thievery also emerge from South Sudan against Ugandan traders, the difficulties of doing business in a post-war environment are brought into sharp focus here. A business opening baring so much promise has become an opening of wrath on both sides of the border. While Ugandan traders complain of contract breaches, traders from South Sudan complain of dishonest business practices by Ugandans, cited as the leading cause of conflict.

The traders have come down crumbling to their knees, sank and buried by debt as banks from which they borrowed money, moved in and attached their assets.

These incidences pose important questions about the maturity of South Sudan as a functioning state and about its conduciveness for trade. It raises questions about Uganda’s foreign policy, who it benefits, and whether Uganda does enough to protect its citizens’ interests beyond its borders.

Many traders say they dealt with both private individuals and institutions of the state, especially after 2006. For some, initial deposits were paid against the supply of goods or services, and after delivery, the remaining instalments were never paid. For some, no payments of any kind were made. Some traders tell of road ambushes in which they were shot at and at times grenades thrown at their trucks while on the road ferrying merchandise.

Traders say they were threatened with force, attacked and harassed when they sought payment. Many fled in fear of their lives, leaving their equipment and assets behind.

A list from a report by an arbitration committee commissioned by the Ministry of Trade, Industry and Co-operatives to handle the claims, shows that at least 100 traders have officially lodged complaints to the government of Uganda.

The traders are in four categories.
The first category is of traders who supplied the Government of South Sudan with maize and sorghum, totalling up to $56m (Shs140b). The South Sudan government acknowledged this debt and paid up $14.8m (Shs37.3b) of the total. The report recommended that they pay up the outstanding $41.6m (Shs104b) without further delay. But this is yet to be done.

The second is of the 36 traders who dealt in various goods and services. They have support documents to back up their claims. However, although the arbitration committee verified that these traders did indeed deliver goods and services, it could not verify that they had not been paid. It thus recommended payment of monies owed to them upon confirmation that they were never paid in the first place. That bill totals up to $8.3m (Shs21b). However, the arbitration team is yet to meet the team in South Sudan to jointly verify these claims.

The last two categories of traders are those whose documents did not have conclusive evidence or those that lacked proper documentation and thus were not recommended for payment. This made a total of about $8m (Shs20b). There is the possibility that some traders could have brought these hardships onto themselves, through dishonest practices. Senator David Amour Majur, a humanitarian attaché at the Embassy of South Sudan in Kampala, says some of the very Ugandan traders claiming that they were defrauded in South Sudan, are themselves fraudsters running from the law.

Majur mentions cheats and thieves, traders who deal in counterfeits plus quack mechanics. Such elements made it all the easier to target Ugandan traders. “The people of South Sudan are honest people. There was no theft in the whole of South Sudan. Now you come with theft; that is the opposite of what they have; they will kill you,” he said.

Cleopas Ndorere, a senior commercial officer at the MTIC’s External Trade Department, says some Ugandan traders over-priced their goods upon arriving in South Sudan, causing a lack of trust with South Sudanese.

Although Majur says, of all countries trading in South Sudan, only Ugandan traders have this problem (which in turn means it is Ugandan traders with a problem), the arbitration report makes contrary findings. The committee discovered that Kenyan traders had faced similar trade disputes/claims in South Sudan. The Government of Kenya moved quickly to engage the Juba government to find solutions, which resulted in the expeditious settlement of the claims, the report notes.

Ugandan traders do not categorically deny this. Patrick Ntege Walusimbi, chairperson of the Ugandan Traders Association of South Sudan, says it was an open liberal economy where prices were determined by forces of demand and supply, and that the South Sudanese had the liberty to opt out of the deal if the prices were too high.

However, Dr Frederick Kisekka-Ntale, a political scientist and International Relations expert in Kampala, says the clash between the two peoples could have been because of economic competition.

“Many people in South Sudan are uneducated and are competing for more-or-less the same kind of opportunities as Ugandans going there, menial jobs like carrying water, etc. It is possible there is a general thinking (among South Sudanese) that all this would have accrued to us but in this regard, it is the Ugandans that are coming to do this,” he says. Amb. James Mugume, permanent secretary at Uganda’s Ministry of Foreign Affairs agrees. “Ugandans are targeted because of their overwhelming number. It encourages xenophobia,” he says. Majur estimates that there are between four to five million Ugandans in South Sudan.

The traders suggested that government took over their debts in the bank as the claims were settled or that it paid off the traders and then demanded payment from the Government of South Sudan.

But Mr Ndorere says the delay in solving these claims is because the Juba government has now been distracted by a conflict with Sudan. Mr Walusimbi says this is no excuse. “South Sudan is not going to settle down tomorrow. Does that mean that our fate is sealed?” he said.

Amelia Kyambadde, Minister for Trade, Industry and Co-operatives, wrote to the Minister of Finance, Maria Kiwanuka, asking her to instruct the banks that owed traders money to extend their loan recovery period as the MTIC engaged the South Sudan government.

But Ministry of Finance spokesperson, Jim Mugunga, said he was not privy to the communication between the two ministers. “But as a matter of policy, the Ministry of Finance does not unnecessarily interfere in business decisions made by private businessmen and banks in transactions of that nature.”

The traders are mired in accusations of dishonesty. They reportedly got a Shs50m token from State House after meeting the president last year, only for the then top leadership to allegedly keep the money to themselves.

Some traders have been evicted out of their houses as banks have moved in to reclaim them. Some are stuck in their homes, nursing gunshot wounds as they await the banks to move in.

Although there is evidence to show that trade between Uganda and its northern neighbour is strong, the Ministry of Trade arbitration committee’s report states that a failure to settle these claims could have an impact on this trade. It is likely to discourage Ugandan traders from trading with South Sudan, a feat that would allow Kenyan traders take over Uganda’s market share, and, build up insecurity between communities along the border.

Tales of Ugandan Traders

Salim Muhammed Tibo
He started trading in South Sudan in 1997. He supplied salt, soap and maize flour to the SPLA, amounting to 2.7m South Sudanese Pounds, but the money has never been paid, despite a court ruling demanding that they be paid. He started trading in cars but an SPLA solider pretended to test-drive a $15,000 (Shs38m) Toyota Land Cruiser Prado, and drove off with the car. Another drove off with a $5,500 (Shs13.8m) Toyota Omnibus without paying. He reported to police in South Sudan, but was told that it was beyond them because it was a military issue.

Daniel Sesanga
He was lured into South Sudan in 2006. He supplied and installed $33,000 (Shs82m) worth of internal communications systems to a Juba hotel, but was only paid a deposit of $10,000 (Shs25m). He says after the hotel’s owner saw that he had done the work in two weeks, he thought the original amount too high and refused to pay the rest. He was thrown out of the hotel in which he resided, and told to keep away. He says when he reported to Uganda’s embassy in South Sudan, he was told, “Why do you deal with such people?”

Frederick Senoga
He supplied construction materials to the Government of South Sudan in 2007. These were 6,000 bags of cement, 980 iron sheets and brick making machines, which all came up to $132,350 (Shs330m), he says. But he wasn’t paid. He tried Uganda’s embassy in South Sudan, the police in South Sudan and even Interpol but still failed. He used his contacts in Uganda’s military to assert pressure on his debtors, and they eventually paid him $23,000 (Shs57.5m). But that was not before unknown people broke into his house, hit him on the face and slit his jaw. He had been arrested and detained in South Sudan on various incidents before.

Willy Bucyana
He won a contract to construct telecommunication masts for a telecom company in South Sudan in 2007. He was working on several sites, but only completed work on four. Armed men invaded the sites, beat up his workers and threaten to shoot, right as soon as they are nearing completion. Some of his workers were arrested and one of his civil engineers detained for a month in Yei town. He fled, leaving his equipment behind. He claims up to $540,000 (Shs1.4b).

Ruth Namutebi Namubiru
She went to South Sudan with her son in 2007. Her attempts at selling maize flour were futile as she sold it at a lower price than she had bought it. But it’s her son’s disappearance that haunts her. She has not seen him since 2007. He has not called or sent a message, raising fears that he possibly died. When she raised alarms at Uganda’s police, she was told that there was nothing the police could do about it.
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