Oil-producing areas haven’t received their shares since 2014 – report
Communities in oil-producing states have not received $85 million from their revenue share, the Auditor-General has revealed in a report.
People in Upper Nile and Unity states and Ruweng Administrative Area are – by law – expected to receive 2 percent and 3 percent shares.
These percentages are to go directly to oil-producing states and the communities living near oil fields, the Petroleum Revenue Management Act of 2013 stipulates.
But in his submission on Thursday to a committee of the yet-to-be reconstituted Council of States, the Auditor-General said millions of dollars were collected but not directed to the intended communities and states.
The audit report revealed that the 2 percent account meant for the community – and operated by the Bank of South Sudan – received $25.5 million.
But between June 2014 and December 2020, $5 million was paid off to individuals and institutions not recognized by the petroleum act.
On the 3 percent account for the oil-producing states, $60 million was wired to the central bank between 2014 and 2020.
But this money was also distributed to more than 20 individuals and private companies without clear reasons.
Some of the beneficiaries used the money for medical treatment, forex bureau business, and purchase of commercial aircraft.
A total of $50 million was paid out to parties not authorized by the Act.
“The other payments were made to entities not mentioned as recipients in the petroleum revenue management act,” Steven Wondu told legislators in Juba.
The Auditor-General said the finance ministry has not shown how it calculates the 2 percent transfers to the states and Ruweng Administrative Area.
It said that the ministry has not provided satisfactory evidence that it fully complied with the laws on the allocation and transfer of funds for development programs to oil-producing states and communities.
The report concluded that the information, data and explanations provided by the ministry and central bank do not represent the complete, reliable, true and fair records of the amounts and usage of 2 percent and 3 percent shares of net oil revenue meant for oil-producing states and Ruweng Administrative Area from 2011 to 2020.
For his part, the bank governor, Dier Tong Ngor, says only the Ministry of Finance and Planning can provide a better explanation on the discrepancies found in the Auditor-General’s report.
“If any authorized body comes with the request to deposit or to make payment, my responsibility is to make sure that my requirements as a bank are met,” he said.
“The 3% and 2% accounts were opened by the finance ministry and it is the ministry which is the signatory to these accounts.
“Therefore, when a payment request or a deposit comes into those accounts, we act based on the instructions that are given to us as bankers.”
In its recommendation, the Auditor-General advised the Council of States to pursue legal or other measures to recover the illegal payments and confiscations of the funds.
It encouraged the legislators to use the national audit chamber report, the anti-corruption commission and the law enforcement institutions to safeguard the interests of the oil-producing states and communities.
As the denizens continue to be deprived of their oil shares, recent reports showed that the oil industry in South Sudan has left a landscape pocked with hundreds of open waste pits, the water and soil contaminated with toxic chemicals and heavy metals, according to The Associated Press.
The 2020 reports also described alarming birth defects, miscarriages and other health problems among residents of the region and soldiers who have been stationed there.