Archive for February 8, 2012

Skilled workers are seen sitting behind power tools as they wait for customers at a market in Khartoum, January 7, 2012. REUTERS-Mohamed Nureldin
A skilled worker is seen sitting behind tools as he waits for customers at a market in Khartoum, January 7, 2012. REUTERS-Mohamed Nureldin

1 of 2. Skilled workers are seen sitting behind power tools as they wait for customers at a market in Khartoum, January 7, 2012.

Credit: Reuters/Mohamed Nureldin

By Ulf Laessing and Alexander Dziadosz

KHARTOUM | Wed Feb 8, 2012 2:08pm GMT

KHARTOUM (Reuters) – A few weeks ago, a leading opposition activist sat down in a downtown Khartoum office to talk to a journalist. The young man immediately removed the battery from his cellphone.

“It’s so they can’t trace you,” he said, placing the battery and the phone on the table. “Any one of the security agencies spread throughout the country can arrest you.”

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Despite that danger, the activist, from an underground group called “Change Now,” said he was convinced Sudan is on the brink of its own Arab Spring uprising.

Hard times and growing frustration with the two-decades-old government of President Omar Hassan al-Bashir have sparked small protests in Khartoum and other university cities in the Arab-African state.

The demonstrations are still tiny compared with those that shook Egypt and Libya. Sometimes about 30 people show up, hold banners denouncing the government for a couple of minutes, and then melt away before security agents arrive. But the demonstrations have become more frequent in the past few months and the question is, could they lead to something bigger?

The main economic challenge is plain. When South Sudan seceded from the north last year, Khartoum lost about three-quarters of its oil, the main source of state revenues and hard currency. The Sudanese pound has slumped by as much as 70 percent below the official rate. Annual inflation is at 18 percent as the cost of food imports has shot up. Wars against insurgencies in different parts of the still-vast country have also soaked up government funds.

In 1985, protests against food inflation toppled President Jaafar Nimeiri in some 10 days. But the government in Khartoum today says the economy is not nearly as bad as it was in the 1980s, when people had to queue for days to get rationed petrol or food. Sudan, it says, will not follow Egypt or Tunisia.

Rabie Abdelati, a senior official in the information ministry and Bashir’s National Congress Party (NCP), said that the economy was much better than in 1989 when Bashir came to power.

“The situation at that time was very terrible,” he said. “The government has the ability to overcome all obstacles.”

A relaxed-looking Bashir, who is wanted by the International Criminal Court for war crimes, spoke on state television for almost two hours last week to assure the population that the economic situation was under control.

“We have a 3-year economic program (but) this year will be the most difficult,” the president said.


On the surface, life in the capital looks normal. Construction cranes loom on the banks of the Nile, working on new buildings and roads. The city bustles with foreign workers, maids and hotel staff.

But there are sporadic signs that public anger is rising.

In the last week of December, authorities temporarily closed the University of Khartoum after villagers displaced by a huge hydro-electric dam staged a protest, inspiring a week of some of the biggest student demonstrations in years. Weeks later, the spray-painted graffiti calling for “revolution” still covered a few walls near the university.

“Most people didn’t care about the first demonstration as we were all in exams mode,” said a female computer technology student who took part.

But when police came to the dormitories one night to detain some students, “it turned into a protest not just against the dam but against poverty, inflation and the bad situation for students,” said the woman, playing with her blue head scarf.

“It was like anger erupted,” she added. “Now they want to punish us by closing the university, but it will make things worse. We don’t get jobs after graduation. Life is so expensive, people are very angry.”

Abdelati, the information ministry official, said the protests were small and the university would reopen shortly.


Sitting in front of a small metal workshop in downtown Khartoum, Sudanese construction worker Fateh Totu takes his time to recall when he last worked for longer than a week. At the moment he gets jobs for a couple of days, with sometimes a week in between.

“Three, four years ago life was much better. The country was in good shape. Construction work was good,” Totu said, drawing nods from fellow workers sitting on small plastic chairs along a dusty road.

South Sudan’s independence deprived Sudan – a country of 32 million people – of around 350,000 barrels per day (bpd) of the roughly 500,000 it pumped. Since then, oil exports, which made up 90 percent of Sudan’s total exports, have fallen to zero.

The remaining output in the north of around 115,000 bpd serves only domestic consumption.

Industry insiders doubt significant new reserves will be found. But Azhari Abdallah, a senior oil official, said production would rise this year to 180,000 bpd, helped by more efficient technology and recovery rates.

Other officials are less optimistic. Central bank governor Mohamed Kheir al-Zubeir has asked fellow Arab countries to deposit $4 billion (2 billion pounds) with the central bank and commercial lenders to stabilise the economy. Finance Minister Ali Mahmoud said in September Sudan might need $1.5 billion in foreign aid annually.

“The state spends a vast proportion of available resources on the security services. With three conflicts ongoing, the military’s claim on the national treasury is only growing,” said Aly Verjee, an analyst at the Rift Valley Institute. “While some austerity measures have been implemented, there is a general unwillingness in the government to take any step that might lead to popular discontent.”

Landlocked South Sudan must pump its oil through Sudan to the Red Sea. Northern officials hope the transit fees they charges will help. But a deal has been elusive – oil analysts say Khartoum has demanded a transit fee more than 10 times the international standard – and the breakaway state has so far refused to pay.

Khartoum has seized oil awaiting shipment to compensate for what it argues are unpaid fees. Industry sources say the north has sold at least one shipment of southern oil. In protest, South Sudan has shut down production.


How to find new revenues? Khartoum expects to have exported $3 billion of gold in 2011 plus another $1 billion of other minerals. Mining workers say the real figures are less than a third of that.

“Only 7 of the 70 projected tonnes of gold output for 2011 come from regular mines,” said a foreign mining executive who declined to be named. “The rest is produced by gold seekers whose output is very hard to verify, and often ends up being smuggled abroad.”

The government predicts 2 percent growth in 2012 but the International Monetary Fund (IMF) thinks the economy will contract. A senior Sudanese analyst with ties to the government says food inflation is much higher than the official figure. Prices for meat, sugar, vegetable oil and other staples are doubling every year, according to the analyst, who asked not to be named.

Customs officials at Khartoum airport now search almost every piece of luggage brought into the country, hoping to find a laptop or other electric device on which they can charge duties.

Khartoum had long known the South would secede, but did little to diversify its economy away from oil, bankers say. Just days after South Sudan became independent last July, Sudan’s parliament, which is controlled by Bashir’s National Congress Party (NCP), passed a budget predicting stable oil revenues.

“They just thought it would continue like that,” said a senior banker in Khartoum who declined to be named. “That’s why I doubt they now have a plan to turn the economy around.”

Harry Verhoeven, a researcher at the University of Oxford who has studied Sudan extensively, said Khartoum had used its oil revenues for large, expensive projects such as the Merowe dam that sparked December’s protest.


Since the united States imposed a trade embargo on Sudan in 1997, most Western firms have shunned the country. The ongoing domestic insurgencies and the International Criminal Court’s indictment of Bashir mean that’s unlikely to end any time soon.

That leaves Khartoum reliant on China, its biggest trading partner, and Gulf Arab states. But no substantial aid or loans have been announced yet apart from small development programs.

At an Arab investment conference in December, prominent Saudi businessman Sheikh Saleh Kamal slammed Sudan’s taxation, investment, land and work laws.

“I said it already in the ’90s but I repeat it again since nothing has changed,” said Kamal, head of Islamic lender Al-Baraka Banking Group and the Islamic Chamber of Commerce and Industry. “The investment climate in Sudan does not help to attract any investments.”


Despite the growing problems, organising protests isn’t easy. Power cuts, unreliable cell phone networks and low internet usage make it hard to mobilise people through Facebook or Twitter as happened in Egypt.

Activists are trying to link up with groups such as the people displaced by the Merowe dam, or poor farmers.

Many are frustrated with the inconsistent and ineffectual opposition parties, most of which are run by former rulers in their 70s. Activists say the main opposition party, the Umma Party, is unwilling to call for mass protests. The party’s veteran chairman Sadeq al-Mahdi recently said he wanted the president to go. But his son just became a presidential assistant in Bashir’s office. The leaders of another big opposition party have decided to join the government.

For the female computer technology student, the only way is out.

“I’m just tired of Sudanese politics. I think there will be a revolution, but nothing will change. We will have the same people,” she said.

“I just want to leave Sudan. I don’t see any job prospects here. I think 90 percent of students want to leave Sudan.”

(Writing by Ulf Laessing; additional reporting by Khalid Abdelaziz; Editing by Simon Robinson and Sara Ledwith)

South Sudan In Talks With Texas Pipeline Company – Report

Posted: February 8, 2012 by PaanLuel Wël Media Ltd. in Economy

By Jenny Gross

LONDON (Dow Jones)–South Sudan said Wednesday that it was in talks with a pipeline construction company based in Texas that would start constructing a pipeline in six months, according to the News Agency of South Sudan.

The news agency report, posted on the South Sudan government website, did not name the company. Dr. Barnaba Marial Benjamin, spokesman for South Sudan, also said that South Sudan had signed a memorandum of understand with Ethiopia to construct an oil pipeline passing through Djibouti, the news agency reported.

He said that South Sudanese ministries should expect trims in their budgets after a meeting of ministers scheduled to take place this weekend, the agency reported.

South Sudan, which produces 350,000 barrels of oil per day, shut down its oil production last month after negotiations over oil transit fees with Sudan ended without agreement.

-By Jenny Gross, Dow Jones Newswires; 4420-7842-9239;

South Sudan Businesses Fear Oil Shutdown Fallout

South Sudanese express their support as President Salva Kiir declared a halt on all oil operations in South Sudan, in Juba, January 23, 2012.

Photo: Reuters
South Sudanese express their support as President Salva Kiir declared a halt on all oil operations in South Sudan, in Juba, January 23, 2012.

When South Sudan decided to shut down its oil production to protest against alleged injustices from the north, the country was also cutting off 98 percent of its revenue.  Businessmen in the south are particularly concerned about the economic consequences of the shutdown.

Mustafa Ayoo runs a small hardware store at the Jebel market on the outskirts of the capital. Like many other business owners here, he has been closely following news of the oil shutdown, a two-week process begun late last month which should be nearing completion.

“Well, I’m concerned for sure, because it’s like even foreign exchange is going to be a problem,” said Ayoo. “Because mostly here the things we sell are coming from another country – mostly from Uganda and Kenya.  Here I’m sure it’s going to affect my business.”

Ayoo says he typically buys his materials using U.S. dollars. But the dollar and other foreign currencies that had been brought into the country through the oil trade are getting harder to find since the shutdown.

South Sudan’s central bank, trying to conserve dollar reserves, has ordered that wire transfers to Kenya and Uganda be conducted using only the South Sudanese pound.

Michael Toma, originally from Uganda, has been selling household goods at the Jebel market for the past year.

“Yeah, I’m so concerned in that I believe it’s already has impact as of now. Though we are worried if the impacts are going to be a long term impact definitely we the common man will have to suffer,” said Toma. “But however, I overheard the president say ‘it’s for the better’ and in hearing what he said I have reason to believe that he was right in ordering the shutdown of the oil. It’s affecting us, right, but we believe its a better decision for the future.”

North-South Sudan oil pipeline

VOA – E. Pfotzer

North-South Sudan oil pipeline

South Sudan depends on northern pipelines to send its oil to international markets. The south cut off its oil trade with the north after accusing Sudan of stealing $815 million worth of oil. Khartoum says it took the oil to compensate for unpaid transit fees.

An African Union panel led by former South African President Thabo Mbeki put forward a proposal to settle the dispute in which South Sudan would pay the north some $5 billion over the next five years to make up for the lost revenue.

South Sudan rejected the proposal. Toma says he supports that decision.

“I believe in that, because given the provisions that were drafted by the AU and trying to peruse through them I have the feeling that South Sudan as a nation was being cheated,” said Toma. “Its sovereignty was being tampered with and it was being reduced [from] an independent country to a dependent country.”

South Sudan also faces enormous development challenges. The United Nations estimates that only a quarter of the population is literate and about the same percentage has access to health care.

Some traders, like Dayo King, think the nation may still be too fragile to sacrifice so much of its economy.

“This is still a country that has just begun, in fact was trying to do development just from the start, so if there’s no oil maybe when the oil even stops maybe like one week it affects people terribly,” King said.

Others like Simon Gatdier Yieh support South Sudan at all costs.  Having witnessed years of war, Yieh says the south, as an independent nation, is in the right to stand up to Khartoum.

“The people of the Arab side like Omar al-Bashir they’ve not forgotten the war; it’s not good,” said Yieh. “So we’re very happy for our president to shutdown the oil because oil belongs to the south. It does not belong to the north.

The government of South Sudan is preparing to announce austerity measures to reduce spending in order to make up for the economic shortfall.

But with so many people in the country lacking basic services, and many others kept alive through emergency humanitarian interventions, any significant cuts could be painful.

South Sudan Businesses Fear Oil Shutdown Fallout
Voice of America
February 08, 2012 South Sudan Businesses Fear Oil Shutdown Fallout Gabe Joselow | Juba, South Sudan When South Sudan decided to shut down its oil production to protest against alleged injustices from the north, the country was also cutting off 98

South Sudan on road to football recognit
South Sudan will be proposed as a member of the Confederation of African Football on Friday as it begins the process to become world football’s newest nation. CAF says the state’s newly formed football federation will be considered for membership at

SUDAN-SOUTH SUDAN: Pressgangs “still operating in Khartoum”
JUBA-KHARTOUM, 8 February 2012 (IRIN) – Rebel groups fighting South Sudan’s government have bolstered their ranks through the forced recruitment of southerners living in Khartoum, according to a senior official in Juba, a self-styled rebel leader,

South Sudan on road to joining world football
Reuters Africa
By Mark Gleeson LIBREVILLE (Reuters) – South Sudan will become a provisional member of the Confederation of African Football (CAF) on Friday, the first step to becoming the world’s newest footballing nation. But the country, which broke away from Sudan

 UN: Hunger Crisis Worsening in South Sudan
Voice of America (blog)
The United Nations says ongoing conflict and a weak harvest in South Sudan have put millions of people on the brink of a severe hunger crisis. A joint report released Wednesday by the World Food Program (WFP) and the Food and Agriculture Organization

Exclusive: Trafigura deals in disputed Sudanese oil
By Emma Farge | GENEVA (Reuters) – Swiss-based commodities trader Trafigura has bought oil which the South Sudanese government claims was seized by Sudan, its northern neighbor and former civil war foe, industry sources told Reuters, and is now in a

High levels of food insecurity in South Sudan / FAO-WFP report says poor
ROME, Italy, February 8, 2012/African Press Organization (APO)/ — Millions of people in South Sudan will face hunger this year if urgent action is not taken, according to a joint report issued by the Food and Agriculture Organization of the United

Khartoum warns of reaction to any aggression by South Sudan
Sudan Tribune
February 7, 2012 (KHARTOUM) – The Sudanese government has vowed to respond in kind if South Sudaninitiates any hostile action, in the latest escalation of rhetoric between the two countries as they prepare to embark on a fresh round of talks.

South Sudan Limits Dollar Export to Uganda, Kenya
By Machel Amos, 8 February 2012 The Central Bank of South Sudan has directed foreign exchange bureaus to effect transactions to Uganda and Kenya in the local currency as it attempts to reserve the available dollars in stock following the shutdown in

Former Lucknowite to gain experience in South Sudan
Lucknow Sentinel
Jen MacKinnon and her OPP colleague Rob Baskey at the Canadian Police College in Ottawa where the two trained before going to the Sudan in Africa. MacKinnon is mentoring the Sudanese police officers and training them on South Sudan Law pertaining to

Ethiopia, South Sudan, Djibouti Talk Infrastructure, Integration
ADDIS ABABA — Ethiopian Finance Minister Sufian Ahmed inked a Memorandum of Understanding last week with his Djibouti counterpart Elias Dawaleh Mussa and South Sudan’s Minister of Petroleum and Mines, Stephen Dhieu Dau, in the Ethiopian capital…