The undeclared war between north and South Sudan has come to another temporary halt following another peace deal which seems to have left neither side happy. Former South African president Thabo Mbeki was last week brokering talks between the two sides in Addis Ababa. The main issue is how much landlocked South Sudan should pay to Sudan for the right to transport oil across Sudan to the coast, from where it can be shipped to purchasers.
In the recent past, Sudan has essentially been confiscating South Sudan’s oil, and South Sudan has responded by cutting off all oil supplies; in reply to that, Sudan has been bombing South Sudan. Now, after much pressure by other countries, the two parties seem to have reached a deal, whereby South Sudan is to pay Sudan around $3 billion plus a fee of $9.48 per barrel of oil which passes through Sudan.
The deal is not going to solve Sudan’s economic crisis, as the oil from South Sudan accounted for 85% of Sudan’s annual export earnings of $15 billion. To compensate for lost revenue, Sudan has devalued its currency, slashed government spending, and increased taxes, but inflation is still running at higher than 35%. Observers say that the “agreement” is really little more than the latest offer on the table; final agreement still seems a long way off.