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North Sudan may introduce new currency after South secedes

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February 1, 2 011 (KHARTOUM) – The financial authorities in North Sudan told their Southern counterparts that they will discontinue use of the pound after the semi-autonomous region officially becomes an independent state.

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Ninety-nine percent of Southern voters in the country and abroad decided that they want to separate from the North as part of the self-determination right afforded to them in the 2005 Comprehensive Peace Agreement (CPA).

The new state however, will not come into existence officially and legally until the end of the interim period on July 9th.

The ruling National Congress Party (NCP) and the Sudan People Liberation Movement (SPLM) are negotiating post-referendum arrangements such as the status of Abyei, border demarcation, national debt, citizenship, oil sharing, water and international agreements.

One of the technical details discussed between the two sides is the future of the Sudanese pound as a currency used in the South. It is during these talks that North Sudan disclosed its intention to do away with the national currency.

"We are negotiating on how we phase out the Sudanese pound in the south, because the north has decided to have nothing to do with the pound," Elijah Malok, the head of the Bank of Southern Sudan which is currently linked to the Khartoum-based Central Bank of Sudan, told reporters.

“As soon as the whistle is blown for the independence of southern Sudan, they [the north] will forget the pound, and therefore the negotiations are going on how you redeem it or how you bring it back to the coffers of the Bank of Southern Sudan," Malok added.

No one from the Central Bank of Sudan in the north was immediately available to comment on the statement.

A diplomatic source confirmed to Reuters that the north had threatened making the potentially disruptive move of introducing its own currency during negotiations, but added it was just a tactic to win concessions from the south ahead of secession.

"It’s more a threat ... It’s not a serious option at the moment but it could become one," said the source.

Malok himself later qualified his comments in an interview with Reuters saying the north had not made a final decision on bringing in the currency.

"Those are the indications that are coming out of the negotiations. There is a possibility of them introducing their own currency but nothing is definite at this moment," he told Reuters.

Malok said the south was also considering introducing its own currency after independence — southern officials have earlier said they might make the change months after separation. Malok’s comments on Tuesday were the first suggestion the north might try to preempt the move with its own new currency.

The Southern official, who is also the deputy governor of the Central Bank of Sudan, said the north might revert to the country’s previous currency the dinar.

"The pound in fact was imposed on them. They ([he north] had the dinar and I am sure they are still keeping it in their coffers," he said. Under 2005 peace deal, Sudan agreed to drop the dinar —seen as a symbol of Arab countries — and revert to the Sudanese pound which was the currency after British colonial rule.

Analysts estimate the reintroduction of the pound in 2007 cost Sudan around $150 million, an expense the north could not afford given its current economic crisis.

The governor of Sudan’s Central Bank Sabir Mohamed Al-Hassan said in an interview last week that South Sudan refused to heed to advices by experts and consultants to form a “monetary unity” with the North.

Al-Hassan said that the North will work on retrieving any quantity of Sudanese pound circulating in the South once the latter introduces its own currency.

He estimated that 10% of the monetary supply is in the South.

Sudan is facing a severe economic crisis manifested in lack of hard currency, erosion in value of the pound and soaring inflation rates.

Late last year the government introduced an austerity package which involved reducing subsidies on sugar and petroleum products, curbing imports of many goods and cutting the pay of Sudanese officials.

A privatization process is also underway to get rid of state-owned firms to reduce expenditure.

The North blamed the deteriorating economic situation on speculation related to impact of the South’s secession and the global rise in the price of food products.

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.

It is not clear what is the formula for oil wealth sharing following the South’s secession but will likely be less than the 50-50 split currently in place under the CPA.

(ST)

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  • 2 February 2011 09:10, by Deng Ateny Lueth

    well, guys we discussed this very same issue of money. i knew north was going to entangle south sudan economy by trashing its share of pound as punishment, and not only that, they will decide to block their pipeline. we have advocate implementation of limuru port but leaders are reluctant to speeding with the program. now let bear the consequent.

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    • 2 February 2011 09:21, by Victory

      South are going introduce theirs before you do.

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    • 2 February 2011 09:26, by Gatwech

      Deng Ateny,

      We will continue to hire the oil pipeline until we can be able to build one. It is more cheaper to hire it than to build new one. The North needs our oil money and will agree on the terms for hiring their pipeline, port Sudan and use of their refineries. It takes many years to build those facilities.

      As for the currency, GOSS should now begin to work on its new currency.

      In the currency notes, I suggest that we make sure we put the pictures of our great grandfathers and leaders who first charted political ground for the South. People like Father Saturino, Both Diu, Nhial, etc.

      And we should not forget our diverse landscapes to feature in the notes. These should include our rivers, mountains, cattle, wildlife, etc.

      We need to quickly work on the currency before July 9.

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      • 2 February 2011 09:45, by Sam.Eto

        Sorry my friend Gatwech - The South is not in the position to set terms for use of the pipeline or refineries in the South, since it has no other alternative and relies 98% of its revenue on oil. The terms will be set by the North - that is why many advisers are telling the South to cooperate with the North on all these issues - otherwise it would be suicide for the SPLM.

        You forget that the North has a production of 110,000 barrels/day - enough to supply local demand. The rest is all export and profit. But for the South it is its only lifeline, with no other alternatives.

        I admire your patriotism but you need to be more realistic. Sometimes doing business with your enemies is necessary, but don’t be stupid and bite the hand that feeds you. Considering the North provides the revenue and funds to the South - it is literally feeding it.

        The South neither has the fund or ability to build a new pipeline - even it did, it wouldn’t be feasible as expressed by many observers for the simple fact that it is easier to rely on gravity and let the oil flow north like the Nile. Otherwise you would have to use hundreds of pumps to push the oil up the Kenyan or Ethiopian highlands - impossible and expensive.

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        • 2 February 2011 13:27, by Mel mosa

          Sam.Et
          I can tell you that north people shouldn’t misslead themselves that pipeline and refineries are belong to north. The pipeline and refineries are belong to all sudan. So, if south separate from north they don’t have to pay for pipeline and refineries since it was built by Sudan budget not north budget. Please,Northerners don’t waste your energy to negatiate renting pipeline.

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        • 2 February 2011 14:17, by Mel mosa

          Sam.Et

          Don’t worry about southern people my friend. They more are wise than north people. When CPA was signed, the northern people were making fun that the SPLM or southern people haven’t understand peace document but at last, it seem the government of Khartoum didn’t know what kind of document they signed. They signed separation but they didn’t understand.

          Same to northern people their prediction about the future of our new country Southern Sudan. I can tell you that South should survive as a country without oil. Southerners are hard working people and we have many friends in any continent who can support us. So, northerners at this time must be careful. The suicide might be you northerners. You northern people always and famous for lies. You must learn how to tell the trust to your young generation otherwise, the north will be disaster.

          We should cut oil pipeline any time if you guys refuse good relationship by repeating fake resources agreement. We don’t care this time about making relationship with you. We can be enemy as known already we are enemy but, for the sake of neighborhood, we can be friend through solving our differences. Notthing wrong with that. Therefore, northern people must accept the trust in order for us all, to live better otherwise, we southerners don’t need your relationship.

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        • 3 February 2011 15:21, by Anthony Oryem

          Dear Readers.
          Let’s hope that South Sudan Government are not going to make a huge changes on the currency that are already in circulation, let just say a name change from what it is today "Bank of Sudan" to the (Bank Republic of Southern Sudan) or whatever name they may come out with in the proceeding days ahead will be enough; however, the design should be kept as it is including the two language (Arabic and the English) it has on.

          I know some may disagree or agree with me on the issue of keeping the Arabic language mentioned above. But we should understand that we have brothers and sisters amongst us who grew up in the north and been there up until recently and all their kids went to schools there, which I believe most studied in Arabic schools. Their rite should be respect as well because they are part of this Southern Sudan too.

          Let’s think twice when making shift in areas interfering with languages we should think of those mentioned above. Keeping the Arabic language alone will not convert a person’s faith, change a person ethnicity, or change a person’s geographical location rather broaden our knowledge. After all, it was because of a multi-lingua that Dr. John Garang and those were with him in the movement managed to have a smooth diplomatic dialog with both the local regime as well international bodies abroad without translators’ interference.

          By saying so it does not mean I don’t respect what other friends has already suggested earlier, but rather a hint that shouldn’t be taken for granted. Remember Southern Sudan is in a global figure at the moment; therefore whatever we do should be at standard level and presentable internationally.

          OUT of TOPIC:

          Another thing is that dress code should be warn at the assembly, I mean those in the Parliament should be warn to wear uniform suite compatible to those in the United States Congress or the House of Common in Great Britain. NO lighter colored or the so called African dress should be allowed at the assembly room.

          And finally when we write comment we should avoid mentioning tribe(s) event if we know our targeted audiences please let’s refrain from this tribal things. We are now one Southern Sudanese let’s evade from intimidating one another because of a remark are posting.

          Thanks you all.
          Anthony O.

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      • 2 February 2011 10:04, by Liberator

        Gatwech

        Do you mean ’Leasing’ the pipeline from the North right?. I agreed with you though, that it takes time to plan & build a pipeline especially to coastline East African Countries, like Kenya. But in the meantime, it would be strategically important to continue with the current status quo provided that the current oil share between the North and the South is negotiated whereby, the South can get as much as 95% of its share, and 2% toward the Pipeline leases, 3% could go to the people of Nuba Mointains & Blue Nile regions, until theirs status are completed.

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        • 2 February 2011 13:05, by Sam.Eto

          Do you know maths? How can south sudan get 95% + 2% + 3% - umm how much does the north get? The equation will be 60% South 40% North. You guys can forget about Blue Nile & Nuba mountains - they are part of the north. So mind you own business and stop butting into the North s affairs. You got what you wanted and are still sticking their noses in the north s politics.

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          • 2 February 2011 14:45, by Mel mosa

            Sam Eto

            Don’t get frustrate my friend. Take it easy. As I said northern people should learn to be logic in any agreement. First Mr Gatwick is telling you the trust. What he means is that south must pay nothing for pipe line and refineries because it belong to us all.

            Second, southerner don’t claim Nubia and Blue Nile. They are the one don’t need you so, we southerners are okay without them. It is their choice but make sure we must support them by any mean if they need our support.

            Final, we are ready to change north regime if the north government lack of respect toward south nation. It is not difficult for south to do that. So, northern government must be compromise with south or should face difficulties.

            Thanks

            Mosa

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        • 3 February 2011 04:02, by Liberator

          To: All Readers

          The Associated Press
          Wednesday, February 2, 2011; 11:56 AM

          JUBA, Sudan — The deputy U.S. secretary of state says has urged Southern Sudan’s president to see that the soon-to-be-independent nation becomes a multiparty democracy.

          James Steinberg says President Salva Kiir said Wednesday the ruling party would not seek to create a one-party state.

          The Sudan People’s Liberation Movement is the political wing of the former guerrilla army that fought against Sudan’s north for more than 20 years in a brutal civil war that killed more than 2 million.

          SPLM dominates politics in Southern Sudan. Opposition parties have expressed concern that the party is not committed to instituting reforms that would enable democracy to develop in the south.

          Preliminary reports from last month’s independence vote showed a landslide victory for secession.

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      • 2 February 2011 16:34, by Facts Check

        Yaa Gatwech,

        Please stop the having pictures of people in our money. This will be another point you will regret because there would never be any Nuer on it in your lifetime.

        I suggest we just use symbols like the new Uganda money.

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        • 2 February 2011 19:30, by Ajok Garang

          Please guys ,is there aproblem when they intorduce a new bank notes ? we are going to intorduce new money soon without fear and there is no worry there ,for the pipeline we are not going to hire them becuase they have been using our oil for many years and the those pipes belong to sudan as oil used to be for all people but now the oil will go to the south and the pipeline are going to be useless in the north .

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      • 3 February 2011 03:24, by Biggy K

        Who the fuck is Both Diu? We can’t include villagers in our currency!!!!!!!!!!!!!!!

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      • 3 February 2011 10:29, by Mr. Long John

        Gatwech,

        Although you have included Saturio and Nhial, you only had wanted to say Both Diu to be the one with whom the picture will appear on the woud be new note and you used the other names as a cover up. What a shameful Idea.First why would you mixed a dignitary Mr. Nhial with villigers? Second, what have they achieved in their fight to render them the respect of getting their pictures on the would be new currency?

        Your brilliant Idea is the landscape.period! the other point you missed is the picture of the late provider of the just peace Dr. John Garang to appear on our currency with a dim background of multitude of people that represent the population of the people caused(dead) by the war and beyond. The multitude of people with the late Dr. John’s picture overshadowing,will also represent the mass that overwhelmingly voted for secession.

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    • 2 February 2011 09:27, by Peter Mading

      The Northern Archives of monetary will be full with outdate money. North will do away with Pound and resume their Dinnars. I think there is no fear on that. Let North make use of Dinnar and South make use of Pound.

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  • 2 February 2011 09:19, by Mr.Atok

    Dear Reader,

    Wow, it is good that if that legal tender is name as "Allah" with several denominators bearing several other Islamic symbols like Koran Al Karim, Mosque, Kufareen mashii, in order to substantiate their long quest for Arab Islamic republic of North Sudan.

    Of course, it is naturally a behavior of pseudo arabs wanted to be admitted in the Arab sphere without question.

    Atok Dan.

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  • 2 February 2011 09:53, by James Deng Dimo

    No objection whatever kind of money you gona use, South Sudan will not mine about it because we are now a different nation from the North.
    Changing currency does not have any impact on the people of the South or on our economy.

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    • 2 February 2011 13:51, by Stephen Gatloth K

      Only to the article,Gatloth Gai-Bentiu.

      Even this currency (pound)need to be amended befor recoginised in the south becuase it was printed with some confusing symbols on it that in fact may represented the northeners like Camel on the 50 pound.Do we have any tribe raring camel in the south?

      Also some confusing symbols are still there to be remove or change with a very clear and meaningful one.

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      • 2 February 2011 14:53, by Mel mosa

        Dear all

        The reason why Northern government stick with dinar is that they have fake machine in Khartoun. It is easy for them to print any amount they need.

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  • 3 February 2011 09:41, by Jalaby

    Oooooooooooooooooooooooops!

    You guys .. where are you so worried??!!
    You don’t know the consequences of the separation??!!

    Yes, that’s right, we will soon give you a "Sorry" letter that we can no longer carry out your oil through our pipeline and use our refineries, do you know why? not because we want to revenge from you because you separated,we totally respect your choice and we are happy not to see hatred faces in the north like Pagan Amom and other idoits faces but because we will soon start to use our new discoveries oil in the north specially in block 6 and other places which will utilize all our pipeline capacity and refineries, it is just a matter of time till we send you this letter, Oil minister Lual Deng (by the way he is the most wise person in SPLM, he said north within 3 years will be able to produce half million barrel per day if the rate of the task process continue like this) and we are very sure you will not build new pipeline or refineries in the south but thieves ministers in the south will steal all the money as they did last time .. north has given SPLM/SPLA 9 billion dollars what happened to all that money??!! I think Dinka ministers can provide the correct answer I guess!

    Good luck our neighbor and please don’t be "Fail State" because that will create refugees problems and many other troubles!

    Jalaby (Abo Tagia)

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