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Sudan Tribune

Plural news and views on Sudan

South Sudan says North resumed payment of oil revenue in hard currency

September 9, 2010 (KHARTOUM) – An official in the government of South Sudan (GoSS) revealed that the dispute with the North over disbursement of oil revenue has come to a close after both sides reached an agreement to settle the issue.

The North and South split revenues from south Sudan’s oil fields under a 2005 peace deal. The underdeveloped region derives around 98 percent of its budget from oil revenues, making its economy almost totally dependent on the revenues collected by the central government in Khartoum and sent south.

Last month, GoSS said that the North stopped remitting its share of oil revenues in hard currency and is using local currency instead hindering its ability to import. The South further accused the ruling National Congress Party (NCP) of deliberately seeking to weaken its economy by the currency switch.

However, the governor of Central Bank of Sudan, Sabir Mohamed Hassan said that GoSS claims are false and said that the south’s share of oil revenue in July and August was paid in hard currency.

The South Sudan finance ministry undersecretary Salvatore Garang Mabiordit confirmed the payment in foreign currency had returned.

“There were meetings 10 days ago at a senior level to work this issue out, and we are thankful that the payments have now returned to normal,” Mabiordit told Agence France Presse (AFP) from the southern capital Juba.

“This had been a big problem and a big concern, but it has now been resolved.”

Sudan is currently experiencing a severe shortage in hard currency which prompted its central bank to undertake radical measures which limits how much travelers can buy from foreign exchange bureaus.

A report released by the International Monetary Fund (IMF) in August showed a sharp decline n reserves held by the Sudan central bank from $1.58 billion in 2006 to $390 million in 2009 which is estimated to cover a little over two weeks of imports.

The central bank had previously blocked hard currency payments in 2008, a situation resolved at the time by the intervention of senior southern leaders.

The south is due in January to vote in a referendum on independence, set up under the peace deal which ended a more than two-decade war between north and south Sudan, a conflict in which two million people were killed.

Most observers expect an overwhelming vote by Southerners for independence from the North driven by bitter memories of the civil war and feeling of marginalization by the Arab-Muslim dominated North.

(ST)