Issues facing Sudan in light of referendum

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SOURCE
http://www.sudantribune.com/Sudan-s-VP-T...wned,37614

Sudan’s VP Taha warns state owned companies against withholding hard currency

January 13, 2011 (KHARTOUM) – The Sudanese 2nd Vice President Ali Osman Taha on Thursday gave an ultimatum to state owned companies that they must wire any holdings of hard currency to the central bank by January16th or face a freezing of their accounts, Sudan official news agency (SUNA) reported today.


Ali Osman Mohamed Taha, Vice President of Sudan (AFP)
SUNA quoted state minister of finance Al-Fatih Ali as saying after meeting VP Taha that "swift administrative measures" will be taken against firms that are not in compliance stressing that this is part of the recent economic plan adopted by the government.

He added that more steps to restructure these companies will be taken and revealed that decisions will be made later to dissolve them. But it was not clear if he was referring to privatizing them or simply shutting them down.

Last October, the government ordered appropriate agencies to generate the list of firms owned by it in preparation for their privatization. It justified the move by saying that it will lead to strengthening the private sector and making it stand on its feet and provide more job opportunities.

Sudan began privatizing state firms in the 1990s but the economy has been somewhat restrained by U.S. economic sanctions imposed since 1997 isolating them from international money markets. Corruption and bureaucracy have also hindered growth.

However, the issue of privatization became more pressing as the budget deficit soared coupled with chronic shortage in foreign exchange reserves. The North is also wary of the impact generated by the seemingly inevitable secession of the South following the ongoing referendum.

Sudan derives close to half of its GDP from selling 470,000 barrels per day of crude oil which comes mostly from wells in the south, with the infrastructure in the north. Under a 2005 peace deal oil from the south is divided about 50-50 between the semi-autonomous southern government and Khartoum.

Some sharing is likely to continue in a post-secession scenario as it will take years for the south to build refineries and a pipeline to a Kenyan port. But the north’s share will likely be reduced. Khartoum has moved to expand non-oil sectors to compensate.

The loss even if partial of oil revenue will cause a drop in inflow of foreign currency, impact public finances and balance of payments which could lead to additional pressure on the fiscal deficit and the country’s foreign exchange reserve which already at record lows.

Last month, the government began the first phase of measures aimed at ending subsidies on petroleum products and sugar by raising their prices to the public. Furthermore, a 25% cut in salary for 149 ministerial-level government officials and a 30 percent reduction in foreign travel for the government were introduced.

The ministry of external trade also released a list of products that merchants are prohibited from importing such as furniture, dairy products and meat among others. The local banks have been banned from financing any imports of these products or issuing letters of credit for them.

[achali]

SOURCE
http://www.sudantribune.com/Price-rises-...ests,37617

Price rises spark student protests in Sudan’s central state

January 13, 2011 (KHARTOUM) – Hiked prices of sugar and petro products have spawned student protests and clashes with the police in different parts of Sudan’s central State of Al-Jazzirah, in a clear manifestation of growing public resentment over worsening economic conditions in north Sudan.

Early this month, north Sudan approved an austerity plan containing sharp cuts on subsidized petro products and sugar as well as curbs on several imports. The government also slashed spending of government offices by 25 percent.

Students from Al-Jazzirah University and Madani Private College on Wednesday and Thursday held protests over government’s cuts in subsidies for Sugar and petro products, and subsequently clashed with the police who used tear gas and batons to disperse them.

The protesting students managed to reach as far as the central market in Madani town, the provincial capital, before the police was able to scatter them away. Several students sustained injured and six were arrested during the confrontation with the police.

The two-day protests spilled over to other parts of the state, including Al-Kamlin, Al-Hasahisah and Al-Hilaliah areas.

Government cuts on petro products included gasoline (from 6.5 Sudanese pounds per gallon to 8.5); diesel (from 4.5 Sudanese pounds per gallon to 6.5); cooking gas (from 12 Sudanese pounds to 13); jet fuel (from 4.5 Sudanese pounds per gallon to 6.5).

The government also raised the price of sugar by 20 Sudanese pounds per 50 kilogram (110 pounds) bag.

Sugar and petro products are vital in public life in Sudan and any increases in their prices tend to produce a domino affect on prices of other commodities and public services, whose prices have now gone steep for average Sudanese.

The cuts are part of Khartoum’s attempt to offset the economic impact of south Sudan secession and control the slump in the rates of the Sudanese pounds against the US dollar.

"A change to these sugar and fuel prices will allow the ministry of finance to save 2.06 billion Sudanese pounds," Sudan’s finance minister Ali Mahmood said in defense of the cuts last week.

The oil-rich region of South Sudan is widely expected to emerge as an independent state as a result of an ongoing vote that was promised under a 2005’s peace deal that ended nearly two decades of civil war with the north.

Sudan produces some 500,000 barrels per day of oil, but only 100,000-110,000 bpd are from wells in the north. The economy is dependent on oil for some 45 percent of its budget and most of its foreign currency revenues.

In November Sudan temporarily devalued the Sudanese pound to match the black market, hoping to bring more foreign currency into official trade and destroy the parallel market. So far it has met with limited success with banks still unable to meet the demand for foreign currency.

Sudan has spent heavily on government and defense while increasing its debt and imports to cover a fall in local production, leading to foreign exchange shortages, rising inflation and a weakening Sudanese pound

[achali]

SOURCE
http://allafrica.com/stories/201101140242.html

South Expects New Oil Finds to Boost Its Economy

Khartoum — South Sudan government expects that new oil finds in the region by European operators would increase its revenue and help to cover important expenditures for the new state which might proclaim its independence next July.

The semi-autonomous region is conducting nowadays a referendum on self-determination which would lead to the establishment of a new African state devoid of infrastructure and ravaged by war.

The French oil company Total SA (TOT) and Spanish Star Petroleum will start oil exploration next March in two blocks located in Jonglei state, the southern Sudan oil minister said.

"One is Bloc B, the biggest in southern Sudan, to Total. They will start exploration in March. And another bloc is Bloc E with Star Petroleum, a Spanish company," said minister Garang Diing to the Agence France Presse.

"We estimate that these two blocs have huge reserves which could allow us to add three times the current production to reach maybe two million bpd around 2014 to 2015."

The minister estimated the South produces 450,000 barrel per day.

In 1983, Total had to interrupt its activities in the Bor Basin Block B acreage where they operate with Kuwaiti and American funds. After the 2005 peace agreement, the French firm had to prove its rights and defend its concession as a UK company White Nile (WNK.LN), started working on the ground with the support of Juba.

However in July 2007, the national oil commission stated in favor of Total, but the latter was not ready to start as its American partner the Marathon Oil Corp. (MRO) had been forced to withdraw from the project due to the economic sanctions imposed on Sudan in 1997.

An Emirati investor Mubadala company showed interest, but nothing materialized as Juba wanted, at the time, to involve a Spanish company, Star Petroleum in the consortium but Total was reluctant to associate its self with the Iranian owner of the latter.

Now, Qatar Petroleum Company is suggested by the French firm but Juba didn't give its approval for the 20% percent stake.

Total has operating rights for the block with a 32.5 percent stake, Kuwaiti Kufpec Sudan Ltd 27.5 percent and state-owned Sudapet has 10 percent, the southern Sudan government owned Nilepet 10%. After the southern Sudan independence Nilepet or the structure that should be created will get 20 percent.

Total expressed readiness to resume activities once the new state had confirmed its rights. However a spokesperson from the French company added that some outstanding problems needed to be settled first.

"There are some preconditions, which are security guarantees for the operations on the ground, as well as the enforcement of our standards in environmental matters, ethical behaviour and transparency, and the reorganisation of the consortium following Marathon's voluntary withdrawal."

Last July, Sudanese oil minister Lual Deng Lual in an interview with Sudan Tribune disclosed that local communities ask for compensations, services "etc to the extent that these moves lead to either shelving some expansion plans or worse production stoppage".

Oil minister Diing said they want Total brings new standards and knowhow to the oil sector in South Sudan dominated by Asian companies accused of not observing environment and security norms.

"We need to diversify the capital from some Asian - China, Malaysia and India - especially to get Western experience, the best technologies and the best practices," the minister said.

NEW PIPELINE

Diing also expressed hopes that a big find by Total would also help the south to reduce its dependence on the north - its sole existing pipeline goes to Port Sudan.

"We have that thinking that Bloc B is very far from the pipeline. If there is a big discovery, we might need another pipeline to east Africa," he said, adding that that could go to Lamu on the Kenyan coast or to Uganda, where Total has existing operations.

"We should have options ... This is an issue taken seriously by the authorities," Diing said.

Minister Lual who professed a rare support for the unity of Sudan, was not favorable to the idea of a new pipeline saying it was "uneconomical and expensive". The cost of the pipeline project is estimated at $1.5 billion.

[achali]

SOURCE
http://english.aljazeera.net/news/africa...23996.html

South Sudan vote passes threshold. Celebrations erupt as turnout of registered voters exceeds necessary 60 per cent in South Sudan referendum.

Organisers of a landmark South Sudan independence vote have confirmed that the turnout threshold needed for it to be valid has been reached, as Jimmy Carter, former US president, said the region looks set for nationhood.

Drivers honked their horns in the regional capital Juba on Thursday as southerners hailed the turnout achievement in just four days of the week-long polls, saying it showed the importance of freedom to them after five decades of conflict with the north.

"We are already above the threshold yesterday [Wednesday] - some 2.3 million plus - and more today," Chan Reec, referendum commission deputy chairman, said.

"At the end of the fourth day of polling, with 86 per cent of referendum centres reporting, 2,360,922 people are confirmed to have voted in southern Sudan. This exceeds the 60 per cent threshold figure of 2,359,553."

Carter, who has been heading an observer mission, said he expected the vote to meet all of the criteria to be valid.

"There is no doubt about the legitimacy of the election as far as the number of voters is concerned," Carter told reporters.

"I think it will meet international standards both on the conduct of the vote and the freedom of voters," he said, adding he expected the same to be true of the count.

"The likelihood is that the referendum result will be for independence although we won't know until probably the first week of February."

Juba jubilation

Cars draped with the southern flag and banners calling for separation sounded their horns as they criss-crossed Juba's potholed dirt tracks.

There was excitement at the tomb of John Garang, the veteran rebel leader, who shortly before his death signed the 2005 peace deal that ended 22 years of devastating civil war and paved the way for the independence vote.

"This is very exciting news - that the vote is recognised, that enough have already voted makes me feel warm and happy, and to laugh a lot that our referendum is being a success," Anthony Lamaya, who voted on Sunday, said.

"It is proof of how important the referendum is to us that so many came to vote so quickly," Mary Kwaje said. "We want to get our freedom."

Carter said the challenge now was to address the outstanding issues between the two sides swiftly ahead of the July date for international recognition for the south set by the 2005 accord.

"I believe that will happen quite quickly after the results are known," he said.

Abyei violence

Carter said he did not believe the northern or southern leaderships were behind clashes in the flashpoint border district of Abyei, which killed up to 38 people over the past week.

"The reports I have so far are that the national forces of both north and south have been very careful not to get involved in the violent confrontation in Abyei," he said.

"It would be very damaging for [Sudanese President Omar] al-Bashir's government if he were accused of precipitating violence."

Nomadic Misseriya Arab tribesmen, who migrate to Abyei each dry season to find water and pasture for their livestock, have been fighting settled pro-southern Dinka for control of the territory.

The district had been due to hold a plebiscite of its own on whether to go with the south or the north, but that has been indefinitely postponed because of disagreement over who should be eligible to take part.

The feuding ethnic groups broke the ice in UN-facilitated peace talks in the northern town of Kadugli on Thursday.

"This is a step forward. We agreed to work for peace," Kuol Deng Kuol, the paramount chief of the Ngok Dinka, told AFP.

Hamid al-Ansari, a tribal chief of the Misseriya Arabs, said: "This meeting has broken the tensions between the Dinka and the Misseriya. Now we are sitting together and eating together and we are no longer afraid of each other."

Kuol said the Dinka had agreed to allow the Misseriya to water their cattle once they had received compensation for people and livestock killed by the Arab nomads during 2010.

"We agreed to let them go to the river within two weeks, if they pay some compensation."

The heavily armed Misseriya were key allies of the northern army during the civil war, and the southern leadership has accused Khartoum of backing them in efforts to derail the promised plebiscite on Abyei's future.

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VIDEO
http://english.aljazeera.net/video/afric...63491.html

North Sudan arming border region. As the south votes on its future, the north is reportedly sending arms to the border

In Sudan voting has continued for a fourth day in the week-long referendum. Officials in the south say the voter turnout has already reached more than 60 per cent.

That is the number needed to validate the results of a vote that could split the country in two.

There have been reports of troop build-up along the north-south border.

Nick Clark travelled to the sensitive South Kordofan to investigate.