Uganda to pay South Sudan’s debts to traders

August 18, 2016 in Business, Companies, Finance, Policy, Trade & Industry by Editor

KAMPALA-AUGUST 18 – Uganda will settle the claims Ugandan traders have against the Republic of South Sudan, pending the return of normalcy to that country says Mr. Keith Muhakanizi, Uganda’s Secretary to the Treasury and PS to the finance ministry.

Speaking to 256 Business News to refute our earlier post stating that the government had started bailing out distressed business firms and individuals, Muhakanizi said he was not aware of any payments because no policy to guide the proposed bailout had been developed.

“Am not aware of any bailouts to anybody because cabinet has not yet developed a policy under which the bailout money would be paid. What we have decided however, is to pay Ugandan traders owed by South Sudan and file a government to government claim against South Sudan after the country has normalized,” Muhakanizi said.

He added that payments would be made after verification of the claims and the claim against South Sudan would include interest accrued on the debt.

It was not possible to establish if Muhakanizi was making reference to the protracted $49.8 million claim by Ugandan businesses that supplied goods to the transitional Government of South Sudan GOSS, in 2008 or would include claims for damages by Ugandan traders who lost goods and money in the turmoil of December 2013 when hostilities broke between troops allied to President Salvar Kiir and his former Vice- president Dr. Riek Machar and the more recent clashes of June 2016. Either, the Ugandan plan is a risky undertaking given the fact that South Sudan disputes some of those claims.

It also raises questions about the source of funding for the proposed settlement given that Uganda itself is chocking under domestic arrears to the tune of Ushs 1.3 trillion.