photo by jon nicholson

news - Banking on War

october 24th, 2018

Note: This report was published by The Sentry.

South Sudan’s banks should be apolitical engines of the South Sudanese economy, catalyzing business investment. Instead, some of these banks are corrupted institutions used by the political elite to transfer ill-gotten gains abroad at the expense of providing capital and facilitating trade for the millions of South Sudanese suffering from five years of war. Many powerful South Sudanese elite—known as Politically Exposed Persons (PEPs) in banking terminology—their relatives, and their associates exploit privileged access to bank services or control banks outright. The war economy, built on PEPs’ control of banks and capture of oil profits, benefits the elites even as most South Sudanese suffer the devastating consequences of persistent inflation.

While banks can be channels of corruption, South Sudan’s peace, development, and economic future also depend on local banks and, through correspondent banks, the global financial system. Without reforms, however, there is little chance international donors, banks, and investors will trust the country’s banking system enough to finance South Sudan’s peace and stability. The next step for peace-focused policymakers—the coalition of regional mediators, local civil society, and international supporters of the peace process—is to dialogue with banks and position them to support South Sudan’s economy.

Read the full report on thesentry.org.

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