Brian Adeba and Hilary Mossberg
The peace process in South Sudan has kept most of the guns silent between the two main protagonists over the past year, but core governance reforms that could help the country’s battered economy and build confidence among its population have seen little progress.
For example, joining the Eastern and Southern African Anti-Money Laundering Group (ESAAMLG), an inter-governmental body that promotes processes to counter money laundering, terrorist financing, and other threats that undermine the integrity of the international financial system, will signal to investors and international donors that South Sudan is willing to take the difficult but necessary first steps to create a conducive environment for business by rooting out corruption.
However, such a move would be devoid of meaning unless it is supported by increasing transparency, strengthening local anti-money laundering regulations, and stemming corruption.
To realise the full benefits of the peace and improve the economic conditions of the population, South Sudan’s leaders should muster the political will required to chart a new course by correcting past mistakes to unravel kleptocratic networks in the country. Lax anti-corruption laws and lack of enforcement have enabled South Sudan’s politicians to milk government coffers dry.
Additionally, weak anti-money laundering laws create room for illicit activity such as terrorist financing, human and drug trafficking, and organized crime to thrive.
Becoming a member of ESAAMLG would offer South Sudan a chance to begin the process of regaining credibility in the eyes of its citizens and the international community. Applying for observer status, the first step in joining, would demonstrate to the world that the government may be willing to begin the arduous task of rooting out illicit activity.
The mutual evaluation process, which involves inviting ESAAMLG’s 18-member states to closely examine South Sudan’s efforts in rooting out illicit finance, would provide the country with a detailed roadmap of how to strengthen its systems to effectively protect against corruption and illicit actors.
The member states of ESAAMLG have strong incentives to support South Sudan’s membership — Kenya, in particular. A significant amount of corrupt proceeds from South Sudanese elites flow into Kenya, and, maintaining the integrity of Kenya’s financial system is critical for that regional economic powerhouse to attract the foreign investment.
Kenya retains considerable clout in South Sudan, and it should use its influence to encourage South Sudanese leaders to join efforts to undercut the flow of laundered money from South Sudan to its neighbours.
Kenya should extend its domestic anti-corruption efforts to cover South Sudan activities, as well, particularly because so many Kenyan banks operate in South Sudan and some may be facilitating the corruption, knowingly or not. Bringing the South Sudan banking sector up to Financial Action Task Force standards would allow Kenyan banks to operate in a lower risk environment.
Joining ESAAMLG alone will not resolve all of South Sudan’s economic and reputational woes.
But combined with strong local anti-corruption initiatives that strengthen institutions and prosecutes corrupt officials and their international enablers, the move will demonstrate to the people of South Sudan and the international community that the government is looking ahead from tenuous peace to future prosperity.
Brian Adeba is deputy director of Policy and Hilary Mossberg is director of Illicit Finance Policy at The Sentry.
