Oil, peace and development: the Sudanese impasse

This working paper seeks to describe how oil has impacted on the Sudanese national economy as well as the peace agreement that the central government signed with the Sudan Peoples' Liberation Movement (SPLM).

The Comprehensive Peace Agreement (CPA) which ended the southern conflict tried to tackle the basis of the conflict, which is the distribution of oil revenues. However, the agreement couldn’t introduce relevant indicators to be used to ensure the “equitable sharing” of income and wealth. A sustainable formula for wealth sharing requires dependable information pertaining to the number, living standards, and other indicators relating to the different communities.  But oil price volatility places the country in a cycle in which revenues fluctuate significantly from year to year. In such a vulnerable situation it is difficult for national governments, regional governments and states to plan, implement, and efficiently accomplish development planning. Therefore, the paper recommends diversifying sources of revenue to reduce the risks linked to dependency on oil for Sudan.

The paper concludes that for a united Sudan, the sharing of oil revenues will be expected to pose a serious problem in the future. In this context, whatever the outcome of the referendum on self-determination for the south will be, an important issue to debate and settle will be the distribution of wealth among the various or remaining regions of Sudan. Particularly, if the South becomes independent, this will raise different sets of questions especially on how a partnership could be struck to realise mutual interests of the two sovereign states.