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South Sudan says resolves oil payment dispute

by reuters | Thomson Reuters Foundation
Thursday, 9 September 2010 16:12 GMT

* Hard currency payments to resume

* Independence vote looms

KHARTOUM, Sept 9 (Reuters) - South Sudan on Friday said it had resolved a dispute with the central government over oil revenues that had left it facing a foreign-exchange crisis months before an independence vote.

A senior official from the south's finance ministry told Reuters the central Khartoum government had agreed to resume paying the southern share of oil revenues in hard currency, after switching to the Sudanese pound earlier in the year.

A 2005 north-south peace deal which ended a decades-long long civil war created a semi-autonomous southern government and allotted southerners half the revenues coming from oil found in their territory.

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, the south's finance minister accused Khartoum of trying to undermine the southern economy by switching payments to Sudanese pounds. Sudan's central bank denied the accusation.

On Thursday, southern finance ministry undersecretary Aggrey Tisa told Reuters Khartoum authorities had agreed to resume the payments in hard currency.

"They agreed to revert to the previous arrangement, unlike what they had been doing in July and August which led to all the tension," he said.

"Without hard currency we can't pay for our daily needs, for imports and all these kind of things."

The dispute raised tensions in the countdown to a referendum, promised under the peace deal and scheduled for Jan. 9 next year, on whether south Sudan should declare independence or stay united with the north.

North-south relations have remained troubled and southern leaders have repeatedly accused Khartoum of trying to undermine the vote to try and keep control of the south's oil. (Reporting by Andrew Heavens; editing by Keiron Henderson)

Our Standards: The Thomson Reuters Trust Principles.


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