This country profile was published in November 2010 in our annual ‘Africa in 2011’ issue. The next edition, ‘Africa in 2012’ will be on sale in November 2011.

One word sums up the issue that will dominate Sudan in the coming months: referendum. In fact, two referenda are scheduled for 9 January 2011: the Southern Sudanese will vote on whether the south should secede from the north, and the people of Abyei will choose whether to stay in northern Sudan or to join the south. If Khartoum allows the polls to go ahead, southerners are expected to vote for independence. As The Africa Report went to press, Khartoum was trying to delay both polls.
As Sudan stands on the brink of division, fear of war is being voiced even by normally-cautious church leaders.

Although it signed the Comprehensive Peace Agreement (CPA) of 2005 which envisaged the possibility of secession, the National Congress Party (NCP) government in Khartoum does not want the south to secede. The other CPA signatory, the Sudan People’s Liberation Movement/Army, governs the semi-autonomous south and it expects the referendum to lead to secession, so it does not want war or any delays. 
The CPA stipulates that the referenda in the south and Abyei be held simultaneously. This has enabled Khartoum to block the overall process by attempting to delay the Abyei vote. This obstruction is being aided by Ahmed Mohamed Haroun, the governor of South Kordofan, where Abyei lies.

Haroun is wanted by the International Criminal Court (ICC) for crimes against humanity and war crimes in Darfur. 
The politics of destabilisation will persist. Except for strongman Hassan al-Turabi, who lurks in the wings, the same people who launched the Islamist party’s 1989 coup against the government of Sadig al-Mahdi now rule: Vice-President Ali Osman Mohamed Taha, Nafi’e Ali Nafi’e, Awad Ahmed al Jaz, Mustafa Osman Ismail, Gutbi al-Mahdi, General Bakri Hassan Salih, General Abdel Rahim Mohamed Hussein and President Omer Hassan Ahmed el Beshir. In 1989, Field Marshal Omer was merely a frontman to keep the army in line for the party, but he has since gained ground.

Nevertheless, it is the party that rules and Beshir is circumscribed less by the ICC arrest warrants for genocide, war crimes and crimes against humanity than by the NCP’s organisation, dedication and financial clout. Operationally, the regime can easily survive without him. Politically though, his arrest would have a major impact, raising the hopes of the public and the opposition. Yet African, Arab, Asian and Western governments appear to tolerate the NCP, partly because they fear national instability.
For ordinary people in Darfur and the South, instability is a way of life. They live in fear of being attacked either by anti-government rebels or, more often, by the regime’s regular or irregular forces.

The Government of South Sudan, headed by President Salva Kiir Mayardit, has meanwhile persuaded some renegades (including Lam Akol Ajawin and General George Athor Deng) to come into the tent.
In Darfur, the Khartoum government has a new strategy which involves forcing hundreds of thousands of displaced people out of refugee camps, which afford them a little protection, and into new areas determined by the regime. The UN and foreign governments have essentially left Darfur alone and this may continue as Washington, London and others seek to protect the CPA

Fighting by insurgent groups is therefore likely to increase and Khartoum will respond with increased force. Many think the government forces are too weak to fight a war in the south and the west, but Khartoum has repeatedly shown its organisational skills as proxy forces enable it to pursue several goals at once.
The prospect of the independence of Southern Sudan in January 2011 is causing Sudanese policy makers to re-evaluate their economic strategies. With both the northern and the southern governments reliant on oil exports, agreeing a deal on how to manage them will be crucial for both Juba and Khartoum. The north would have a difficult period of adjustment if the south, where most of the oil is located, votes for independence.

Negotiations on future revenue-sharing terms have already begun. A division of the north and south is also likely to lead to the northern government’s having to bear sole responsibility for the country’s more than $37bn in external debt.
Revenue sharing and transparency were a cause of conflict between Juba and Khartoum in 2010. After UK-based NGO Global Witness reported that there were millions of dollars of discrepancies between the northern government’s and the oil companies’ production statistics, Energy Minister Lual Deng announced in August that the government would order an independent audit and publish daily production figures. 
The oil sector continues to attract the most investor interest.

In late 2010, the petroleum ministry announced targets to double production from about 470,000 barrels per day (bpd) to 1m bpd in 2013. New projects and improved techniques should boost production to close to 600,000 bpd in 2011. 
To try to meet the medium-term goal, the ­Petrodar consortium of Asian companies has started work to drill new wells on Blocks 3 and 7. The risk posed by the prospect of southern independence has not stopped new investors. Luxembourg’s Star Petroleum and Norway’s Hamla signed an exploration agreement for Block E, in Southern Sudan, in August.

At the same time, Finnish company Fenno Caledonian signed a deal to explore for oil and gas at Block 10 in the northeast.
Based on assumptions that unity will remain the status quo, the IMF predicts strong economic growth of 5.5% and 6.2% in 2010 and 2011. Growth is hampered by a growing fiscal deficit and a strong reliance on oil exports to generate revenue.
In late 2010, the government in Khartoum suggested several different strategies to help diversify the economy away from oil, a trend that will become increasingly necessary based on the estimated longevity of the country’s oil reserves. The IMF estimates that production will peak at around 547,000 bpd in 2012 before a gradual descent to about 151,000 bpd by 2030.

The Sudanese government is working with the French state-owned Bureau de Recherches Géologiques et Minières to map the country’s geological resources so as to attract more international investment. In September, mining minister Abdel Baqi al-Jailani said that Sudan would attempt to double gold production to more than 40tn per year by 2012 through licensing small-scale producers and inviting interest from foreign mining companies. Leasing land for export-focused agriculture is also an area targeted for revenue creation.
The banking sector is still a drag on the overall economy due to persistent high rates of non-performing loans which are due in part to government arrears, but also to the sector’s weakness in comparison to regional competitors. 
Deposits and credit to the private sector both doubled over the 2005-2009 period, but from low levels. State-owned banks represent the majority of business in the sector, but also the majority of bad loans. The government has continued to drag its feet over the rehabilitation of Omdurman National Bank, the worst offender

The modalities of separation

It has been nearly six years since a peace deal ended the north-south war in Sudan, but with southerners finally set to vote on whether to become an independent country, many details have yet to be worked out. 
An estimated 8 million people live in Sudan’s southern region, most of whom are expected to register to vote in the January 9 referendum. A north-south referendum commission continues to squabble over the details, and there are still no firm logistical guidelines for voting day.

At least 2 million southerners living in the north and abroad should also qualify to vote, but there is no clear method to determine which members of the diaspora qualify as southerners, leaving the vote open to manipulation. Setting up polling stations is proving to be a burden, with much of the region difficult to access. Southern Sudan has only 60km of asphalt roads and any delay could push proceedings into the rainy season, when many roads become impassable. 
A delay could also prove explosive. The 9 January poll has huge symbolic value in the south, where independence is widely seen as a foregone conclusion. Should the south opt for independence, Sudan will enter a six-month transition period until 9 July, allowing time to negotiate the modalities of separation.

Sudan’s Top Companies

Rank 2010	Rank 2009	Company name	Country	Sector	Turnover (Thds $)	Turnover change	Net profits
125	131	ZAIN SUDAN	SUDAN	TELECOMS	994 300	14,26%	351
202	174	SUDANESE TELECOM CO.	SUDAN	TELECOMS	550 340	-15,79%	38
481	469	MTN SOUDAN*	SUDAN	TELECOMS	172 104	ND	0

Sudan’s Top Banks

Rank 2010	Rank 2009	Company name	Country	TOTAL ASSETS	NET EARNINGS	CREDIT	DEPOSITS
101	100	BANK OF KHARTOUM*	SUDAN	1 300 341	62 624	–	–
124	143	FAISAL ISLAMIC BANK SUDAN	SUDAN	1 030 760	66 351	–	–
164	–	TADAMON ISLAMIC BANK*	SUDAN	581 961	44 923	–	208 582
187	–	FARMER’S COMMERCIAL BANK	SUDAN	427 779	6 735	224 336	351 338
200	194	ISLAMIC CO-OPERATIVE DEVELOPMENT BANK	SUDAN	379 535	27 673	–	237 111