Articles and Analysies
Unfair Distribution of Sudan oil resources could slip south-north back to war after the referendum./Sami Younis
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Sep 25, 2010 - 11:00:33 PM

Unfair Distribution of Sudan oil resources could slip south-north back to war after the referendum.

The current wealth-sharing agreement between north and south Sudan as established by the Sudan�s Interim Constitution or the Comprehensive Peace Agreement will come to an end in 2011. When the south will cast their votes in a historical referendum event to either remain united with north Sudan or become a separate independent state. At any event, a new wealth-sharing agreement between north and south will need to be reached whatever the outcome of that referendum would be, come January 9^th, 2011.

Accordingly the South Sudan Referendum Act signed into Law in November 2009 as provided in the Comprehensive Peace Agreement since 2005 shall allow the people of Southern Sudan to exercise their right to self-determination to either choose unity of the Sudan or to secede and create their own independent state. This Act requires 60% voter registration of the already disputed population census result conducted in 2008 and a simple majority of (50+1) percent for the Referendum Commission to declare unity or secession subject to 60-day appeal by either party if the result is unfavorable to both parties.

If the result is unity because of low voter�s turnout, South Sudan will continue to be allocated its fair share of the country�s resources to meet its government expenditures. If however voter�s turnout meets the 60% quorum threshold and the result is secession, south Sudan will become Africa�s new independent landlocked state but will continue to depend upon access to pipeline in north Sudan to export its oil since constructing new pipelines through Kenya is not economically feasible. In any case, there will have to be some form of oil revenue sharing between north and south Sudan either through pipeline fees, leasing of existing refinery equipments in the oil facilities or new set of wealth-sharing agreement if oil is to exploited and exported for the benefit of both sides regardless of the outcome of the referendum.

At any rate, transparency on the oil revenues, be it on new terms of agreement or pipelines fees and leasing, will need to be implemented whether the outcome of the referendum is secession or unity come 2011. These new terms of agreement needs to be reached soon by both signatories of the CPA to create a peaceful separation in case of secession or mutual understanding in case of unity. The lack of will to find a workable solution to replace the existing oil wealth-sharing protocols once it expired will likely go in flame after referendum is over

At present, both governments of south Sudan and that of national unity, gets most of their income from the oil fund, by far the largest than other oil-producing states. About 98% of the income of the autonomous government in Juba comes from its 50% share stipulated in the CPA and over 78% of the government in Khartoum from the other share. In the absence of new wealth-sharing agreement after the referendum both governments will likely suffer to meets its ministerial expenditures with the former expected to be worst if new arrangement is not reached before 2011. 

In a recent remark, by U.S. Secretary of State on Washington Post, that south may need to give up some of its oil resource to gain independence in order to normalized relationship with Khartoum to accept the final result of the referendum if it is secession, (Sudan Tribune, September 17^th, 2010).  This dilemma, at the moment, does not sit well with both leadership groups that signed the CPA to make unity a priority but unless a new wealth-sharing distribution is reached before January 9^th of 2011 conflict over division of Sudan�s oil resource and other assets and liabilities could spoil the outcome of the referendum. Unless the two partners that signed the CP come up with practical rational formula to divide these resources the outcome of the beleaguered referendum may be honored and that they come may southerners crossed to the dream promise land in everlasting peace.

*Sami Younis is a consultant in exile and can be reached at [email protected]