Sudanese Democracy First Group

Sudan’s Transparency Initiative

Corruption and Nepotism of Integrated Agricultural Services Companies (IASCs) in the Gezira and Manaqil Scheme

6 March 2017

The report is available in Arabic at this link.

The Gezira and Manaqil Scheme is one of Africa’s largest public irrigated agricultural schemes operating under one management. It was founded by the colonial authorities in 1925 as a contractual joint venture between the government, the Sudan Plantation Syndicate and farmers.

 The scheme occupies a total land area of 2.2 million feddan (one feddan equals 1.083 Acres and 0.42 Hectares), of which the Sudanese government owns 1.63 million feddan (52%). The remaining 980 thousand feddan (48%) are rented from citizens who own them outright.  The Scheme constitutes half the irrigated agricultural area in Sudan, consuming about 7 billion cubic metres of water from the Blue Nile, almost one third of Sudan’s share under the Nile Water Agreement.

Historical Synopsis of Changes at Gezira Scheme

Since its inception, the Gezira Scheme legal frameworks provided a clear division of tasks and responsibilities between the government - represented by the Ministries of Irrigation and Finance - the Scheme’s administration and the farmers. The Ministry of Irrigation managed and maintained the irrigation canals up until they reach the small where it joined the smaller channels known as Abu Ishreen. The Scheme administration was responsible for preparing the land, developing technical specifications and managing agricultural operations, including land preparation for cotton cultivation, specifying the crop cycle, spraying of fertiliser and pesticide, enhancing and distributing seeds, and facility maintenance inclusive of roads and rail lines.

Historically, the Ministry of Irrigation carried out its tasks through the Construction and Mechanical Departments, until they were replaced in 1974 with the newly formed Earth Moving Corporation and the Irrigation Works Corporation respectively. These two newly established corporations, were conceived of as public entities that operate independently of the ministry. They were contracted to undertake the maintenance operations within the Scheme as well as in the private sector to cover operational costs. The motivation behind the commercialisation was to reduce government’s costs as the price of cotton plummeted worldwide in the seventies, leading to shrinking profits. This in turn caused the Ministry of Irrigation to accumulate debt to the Ministry of Finance for the costs of maintenance and other operational expenses the Ministry incurred in the Gezira Scheme.

In the late seventies, a joint delegation from the Food and Agriculture Organisation (FAO) and the World Bank (WB) visited the Scheme to assess its performance and provide technical recommendations to the Sudanese government. The visit coincided with a shift in the Sudanese government’s economic direction as it embraced the free market development approach. This change entailed submitting to the terms of the International Financial Institutions (IFIs), especially about agricultural policies. In fact, the government did agree to the delegation’s twofold recommendations:

  • The first was a rehabilitation stage for 4 to 5 years, which started in 1984. It focused on the rehabilitation of the irrigation canals, the reversal of production relations - which were always in favour of the farmers since the inception of the Scheme, and the recalculation of the cost of land and water which paid by farmers to include all crops, not only cotton as was the case.
  • The second stage focused on modernizing the Scheme and introducing technology in the irrigation and agricultural operations.

These changes were clearly induced by the deterioration of cotton prices in global markets and the fluctuation of cotton production in the Scheme, leading to the decline of export revenues and earnings. This in turn caused the Sudanese government to gradually move away from direct spending on canal maintenance, land preparation and input provision. These changes also reflected a radical shift in the government’s economic policies and its responsibility towards the Scheme and the public sector at large. Looking back at the history of the Scheme, cotton production suffered similar crises, plummeting production and fluctuations in global prices in the early thirties.  However, the government did not walk away then from its management and maintenance responsibilities. It used the reserve funds, which the government obtained by allocating 2% of annual profit as a precaution against decline in production or prices, to cover maintenance costs and protect farmers’ profits.

The Establishment of the Integrated Agricultural Services Companies (IASCs)

Traditionally, the Scheme’s Agricultural Engineering Division was known as the Tillage Division until it was changed to Agricultural Engineering in the eighties after it was merged with the Agricultural Engineering Development Division to perform the following tasks:

  1. developing technical specifications for land preparation for different crops.
  2. following up crop harvest operations, especially wheat.
  3. contributing to the development of agricultural mechanization.
  4. undertaking deep tillage to rejuvenate the soil, at least once every four years, to eradicate perennial grasses, shrubs and pests; in addition to digging and maintaining small channels (Abu Ishreen).

It worth mentioning that , the Gezira Scheme’s Agricultural Engineering Division (AED) owned, until the mid-nineties, several major agricultural machines (for example, 87 D7 tracked tractors, over 40 harvesters, 264 small tractors (80HP), 39 large tractors (190HP), and 55 Harrow ploughs (40 disks)).  However, after systematic privatisation, all this machinery was auctioned off as scrap metal, thus disposing all the AED’s assets.

The adoption, by the current government, of economic liberalization policies and its move towards privatization exacerbated problems that faced the Gezira Scheme. The trend was most evident in the passing of the 2005 Gezira Scheme Act, amended in 2014, which was based on World Bank’s recommendations and its report about the Gezira Scheme of 2000. Technical committees were formed to oversee the privatization and sale of the Gezira Scheme’s assets in line with the World Bank’s recommendations. The sale included fixed and movable assets owned by farmers and the government, such as AED equipment and the liquidation of the earch moving  Corporation.

In 2011, the Scheme’s administration opened the tender for the establishment of private integrated agricultural services companies to fill the void created by the closure and sale of the Scheme’s corporations. The tender included facilitation by the government of access to funding from the Agricultural Bank for the import of machinery and equipment.  As a result, 6 companies were registered over the summer season, increasing to 21 over the winter season of 2011.

The registration and establishment of these companies were accompanied by corrupt practices and surrounded by lack of transparency to benefit the political and military leaders of the ruling party and the top officials in the Farmers Union, a government established and supported organization, who are not truly represents the interests of small farmers, but instead supported the government and its agricultural policies.

Among the 23 companies registered, 18 are owned by current Farmers Union leaders, while the rest are owned by the supporters of the ruling party, the National Congress Party -NCP) and their relatives. Per the testimonies of members of the  Gezira and Al Managil Farmers Alliance,  a none governmental organization established to counter the influence of the Farmers Union,  these companies received government funds in the amount of $23 million from the Agricultural Bank of Sudan and from Agricultural Renaissance funds, despite them being private companies owned by individuals.

If we examine the IACSs’ tasks and work areas as defined by the Gezira Scheme Board of Directors, we find that they have fully taken over the tasks previously performed by the AED, the Scheme’s administration and the government at large. These tasks include:

  1. clearing, rehabilitation, maintenance and management of the irrigation canals and structures.
  2. preparation and tillage of land.
  3. provisioning of agricultural inputs.
  4. managing scheme assets.
  5. management of animal production services.
  6. financing and marketing.
  7. Any other production services farmers need.

A List of Corrupt practices and Nepotism of the IASCs

Unregulated privatization was the key that opened the door wide for rampant corruption and nepotism in the Gezira Scheme. The establishment, registration and operation of the IASCs was accompanied by widespread political corruption and nepotism.  The list of companies’ owners below, clearly shows the extent of corruption and nepotism that shrouded this process. All you need is to look at the names of the owners of these companies.

  • Al Liwaa Al Akhdar company owned by Alfatih Abdoun, a famous name in the Islamic Movement leadership, operating in west Sennar area.
  • Winter and Summer company owned by Jubara Mohamed Ibrahim, a head of a Farmers’ Union branch, in a partnership with Ahmed Eltayeb, a member of Gezira State Legislative Council, operating in Hajj Abdallah area.
  • Yaquston company owned by Boraii Saeed, former chair of Gezira Labour Union, operating in Al Housh area.
  • Al Warrag company owned by Yousif Atiyatallah (Al Majarabi), operating in Al Basatna area.
  • Abu Sneineh company owned by the late leader of Gezira and Al Manaqil Farmers Union in Wad Albirr area, Abdel Rahim Abu Sneinah.
  • The company of Omar Alamin Alawad, member of Farmers Union executive bureau and its representative on the Board of Directors of the Gezira Scheme, operating in Al Masallamiya area.
  • Sarasir company owned by Ali Siddig Ahmed Albashir, the President’s cousin and a Farmers’ Union’s branch leader in Tabat area.
  • Businesses of Ahmed Omar, pharmacist in Abd Almajid area.
  • Rio company owned by Elshaikh Alubeid Fadl Almawla, operating in Al Turabi area.
  • Al Naseeh company owned by Mosaed Alsiddig, a Farmers’ Union branch leader, operating in Al Mukhtar area.
  • Samah company owned by Abd Albagi Ali, known as Abu Sekeen, son in-law of the Farmers Union treasurer Salah Almardi, operating in Shallaee area.
  • Azeem Alkhair company owned by Alsadig Abdel Bagi Yousif, a Farmers Union leader, in a partnership with Abdel Bagi Alrayyah the former Speaker of Gezira’s legislative council, operating in Shawal area.
  • Seham company owned by Salah Almardi, the treasurer of the Famers Union, in a partnership with his in-law Abdel Bagi Ali, operating in Gaboja area.
  • Mansico company owned by Bilal Ali, a Farmers’ Union branch leader, operating in Al Mansi area.
  • Wad Alnoura company owned by Mudawwy Alsheikh, a Farmers’ Union branch leader, operating in Tahamid area.
  • Al Matoory company owned by Alajab Fadlallah, a Farmers’ Union branch leader, operating in Al Matoory area.
  • Al Sanyoura company owned by Aseel Aldin, a prominent Farmers’ Union branch secretary, operating in Alqurashi area.
  • Reel Kenana Integrated Agricultural Solutions company, operating in Kab Ajjidad area.
  • Al Tijani company owned by Altijani Mohamed Ahmed, operating in Al Huda area.
  • Al-Hafayer company owned by Badr Aldin Osman, a transport contractor, Siddig Salah Almardi, the treasurer of the Farmers Union and, his in-law Abd Albagi Ali.
  • Al-Jouf company owned by Ibrahim Badur, operating in Tahamid area.
  • Qoum Al Rashid company owned by Mustafa Alshami Wad Badur. The company obtained by a special exemption.
  • There are other companies under the names of Zongaha, Matriot, Atiah, Al Badry Koshek, IBH, and Toshna.

Indicators of the IASC Corruption

  1. Privately owned IASCs receive 273 billion SDG fund from the government earmarked for the Agricultural Renaissance project. In addition, these companies imported machinery at preferential official foreign currency rate and enjoyed tariff exemptions under the cover of contributing to the Gezira Scheme rehabilitation. These machineries were quickly diverted to the private commercial operations, for example in gold mining areas.
  2. IASCs have failed to make available the required machineries for rehabilitation of the Scheme’s irrigation canals. The Scheme’s emergency unit revealed in 2015 that there are only 10 pieces of equipment operating in irrigation canal rehabilitation. This number of equipment were far lower than required to clear 14,000 km of irrigation canals.
  3. One of the biggest manifestation of corruption of the IASCs is the destruction of the Scheme’s irrigation canals through carrying out unnecessary operations to justify obtaining more money. In addition, their employees lack required technical training to perform these operations. This is evident when examining the removal of 49 thousand cubic metres of silt through deep digging, at a time when the annual deposits of silts is estimated to be around 10 thousand cubic meters. From an engineering point of view, only 6 thousand cubic metres should have been removed and the rest should have been left to flow with the water to enrich the soil of the small farms (Hawasha). This example illustrates the crime these companies are committing against the Scheme by digging deeper than required and widening the canals that robs this irrigation system of its most important feature, the inexpensive gravity irrigation.
  4. The high cost of agricultural inputs and services these companies impose on farmers. In their first operational season, these companies have raised the costs of agricultural operations by 145%, achieving about 115 billion SDG in profit. When farmers are not able to pay back debts to these companies because of low yields or lower prices of produce, companies hold farmers’ land as collateral till they pay their debt.
  5. The inefficient performance of the IASCs have been mentioned in the final recommendations of the Governmental Gezira Scheme Performance Review Committee chaired by Dr. Taj Elsir Mustafa. The committee’s report, published in May 2013, stated the following:
  • Most of the companies have failed in carrying out their tasks because of lack of technical expertise, financial ability, administration capability and lack of equipment;
  • did not modernize their operations as expected, but instead followed traditional patterns of work
  • several these company disappeared due to failure to meet financial obligations to banks
  • the allocated area of operation for these companies was far bigger than their capacity and capabilities.

Combating the Corruption of IASCs (Recommendations, Suggestions and Solutions)

  1. Combating the corruption and nepotism inherent in the establishment and functioning of these companies starts with a popular demand to repeal the legislation for to their establishment. This can be achieved by rallying farmers in support of organizations that truly represent their interests, such as the Gezira and Manaqil Farmers Alliance and the farmers’ youth organizations.
  2. the demand for the re-establishment of the AED to play its historic and pioneering role in agricultural operations.
  3. Trigger Campaigns among the farmers for the implementation of the recommendations of the Governmental Gezira Scheme Performance Review Committee especially the followings;
  • the necessity to stop disposing of the Scheme’s infrastructures and to reinstate what had already been disposed of. This was also was recommended by another government committee , chaired by Prof. Abdalla Abdel Salam.
  • The same committee also indicated that the liquidation of the AED and Gezira railways had no legal basis.   This point was also made by Dr. Taj Elsir Mustafa’s committee, when it mentioned that the liquidation transgressed both the decisions of the relevant authority and the rule of law which stipulated that the AED and the railways were to be converted into a publicly traded company and not to be sold or liquidated.
  • The recommendation of Dr. Taj Elsir Mustafa’s committee that the experience of the IASCs require an evaluation to review their financial, administrative and technical competence and to research alternatives. 
  1. The public funds that was obtained unlawfully from the agricultural renaissance allocation, require legal investigations against those who channels these fund to personal gain and  presented their cases  to court.
  2. To demand that the control over the management of the irrigation system need to be reassigned to the Ministry of Irrigation and Water Resources.  The committee chaired by Prof. Abdallah Abdel Salam also recommended that the management, maintenance and operations of all irrigation canals must be given back to the Ministry of Irrigation and Water Resources.
  3. The farmers and their true organizations must remain aware of plans to take away the land of small farmers when they fail to pay back debts to the IASCs. They must remain conscious and raise the awareness of farmers about this insidious plans and be prepared for such eventuality.