Corruption within South Sudan’s gold market has robbed the country of much needed economic development and put it into the hands of kleptocratic networks. (Photo: Dame Yinka^[1], Wikimedia^[2], License^[3])

Although South Sudan's emerging gold market is quickly becoming a popular choice for traders in Africa, widespread reports of smuggling and internal corruption have deprived its people of much-needed revenue and economic development.

In 2020, South Sudan’s gold exports to UAE and Uganda alone totalled more than 3,000 kilograms and brought in US$110 million for the young nation. But this figure is believed to be but a fraction of what the industry is actually capable of digging up, with rampant corruption in the government, military, and police ensuring that workers do not get their fair share, according to a Global Initiative Against Transnational Organized Crime (GI-TOC) report^[4].

Gold mining, be it large or small-scale, offers any nation with deep reserves the chance for sustained development. This is because it is widely viewed as a safe-haven asset, since it consistently retains its value during times of economic strife.

Its status as a valuable commodity, however, also makes it an ideal target for criminal activity, such as smuggling and money laundering, especially when a country does not possess proper regulatory frameworks and oversight.

Observers in South Sudan’s gold sector, including its president, Salva Kiir, believe that almost all gold mined in South Sudan is smuggled out of the country, depriving it of an invaluable source of revenue, GI-TOC said.

Corruption at airports and land crossings, as well as a shortage of officers needed to police the country’s nearly 5,000 kilometer-long border, is not lost on political elites and black market agents, who have lept on the opportunity to make a quick buck.

GI-TOC explained that for instance, Juba, South Sudan’s capital and largest city, hosts various actors that drive the country’s illicit gold trade, GI-TOC said.

Political elites, for instance, exercise their power to easily fly gold out of the country via Juba airport. Transportation from the mines to the airport, meanwhile, is guarded by national security agents in the take; one Juba-based journalist reported that whenever large sums of gold are being traded, national security forces are always involved.

It is well known that a driving factor behind corruption is the inability to legitimately earn a livable wage. Airport security and customs officers who are not earning enough to support their families, or who do not receive their pay on time, are therefore far more susceptible to being bribed to look the other way.

For smugglers and the gold’s ultimate buyers in wealthier regions, such bribes are simply a cost of doing business that pales in comparison to the profits they can reap when they resell the metal on the open market, according to the Switzerland-based independent civil-society organization.

At one checkpoint along the South Sudan-Uganda border, a bribe as small as 1,000 Ugandan shillings ($0.26) will usually be accepted, a community official said, according to the report.

And in cases where smugglers are actually arrested, their connections within the police and the military see them back on the streets. No gold smuggling cases ever progress into a courtroom, GI-TOC said.

With such rampant corruption, South Sudan’s gold reserves are being bled dry at the expense of its economic development and well-being of its miners. Gold prices for small scale miners in the country are amongst the lowest in Africa, despite the high purity levels its deposits hold.

With no access to international markets, however, miners are vulnerable to exploitation by officials who dictate their own prices, well below what would be considered fair.

The real profits, GI-TOC said, are exclusively reserved for the country’s kleptocratic networks.

References

1. ^{^} Dame Yinka (commons.wikimedia.org)
2. ^{^} Wikimedia (commons.wikimedia.org)
3. ^{^} License (creativecommons.org)
4. ^{^} report (globalinitiative.net)