In the likely event that South Sudan secedes from the North to form its own sovereign state, it is inevitable that the two separate countries will have to cooperate and manage their strategic economic relationships in terms of oil and water governance.

This was the general conclusion reached by speakers at a South African Institute of International Affairs (SAIIA) seminar titled “Can Sudan’s resources be shared? Implications of the Southern Sudan referendum”.

Ambassador to the Republic of Sudan Dr Ali Yousif Ahmed Alsharif highlighted some of the major challenges facing South Sudan once the referendum confirms the country’s independence. Politically, Southern Sudanese leader Salva Kiir has indicated intentions to form a transitional coalition government that will incorporate all of the South’s political groups. Once the 2005 Comprehensive Peace Agreement (CPA) expires on July 9, 2011, South Sudan will subsequently hold a general election to ensure a legitimate Southern government.

From a governance perspective, the South will have to develop the infrastructure to ensure effective service delivery. This is no easy feat considering the huge developmental challenges the country faces after years of marginalisation. Political and social institutions also need to be developed in order to facilitate the effective governance of the country and assist in easing the poverty levels, especially within the Darfur region.

OIL

However, the most pressing issue that faces north–south relations lies in the management of the regions natural resources. Some 75% of Sudan’s oil reserves are located in the South, with most of the processing infrastructure located in the North and exported through the country’s main export terminal, Port Sudan.
 

Dr Petrus de Kock of SAIIA’s Governance for Africa’s Resources Programme, put forward two possible options under which South Sudan can manage its oil reserves.

The first is the Government of South Sudan’s plan to construct a 3 600 km pipeline to Lomu, in Kenya, to which the crude oil can be refined and exported. This, however, is not economically feasible owing to cost constraints as well as time constraints. De Kock mentions that there has been interest from Chinese contractors to build the pipeline.

The second, and more viable option, he says, is for an oil revenue sharing structure between the North and the South. Similarly, Khartoum and Juba could negotiate a deal under which the South pays for the refinement and export services provided by the North. In order to implement such an agreement De Kock says that a new oil governance structure and petroleum authority needs to be created to replace the National Petroleum Commission established under the CPA.

De Kock added that cooperation and negotiation would have to form the basis of oil relations between North and South.

WATER

Another strategic natural resource is water, which is a contentious issue between the ten countries that form part of the Nile River Basin (NRB). Current legislation regulating the Nile’s water distribution dictates that all riparian countries in the NRB have to get Egypts permission to embark on any irrigation projects using the Niles resources.

Subsequently, the Nile Basin Initiative has been launched by nine countries and seeks to promote a more equitable distribution of the Niles resources for socio-economic and agricultural purposes. Still unhappy with the Initiative, five upstream States have signed a cooperative framework agreement on the basis of their frustration with asking Egypt’s permission to use the Niles water for commercial purposes.

The creation of Southern Sudan adds another dimension to the politics that govern the allocation of the Nile’s resources. There is no doubt that South Sudan will want access to the Nile for agriculture and to develop the country’s infrastructure. The geopolitics of the region are, therefore, set to shift.

De Kock says that, to manage these relations, it is important that all the countries in the NRB accept Southern Sudan as an equal partner and acknowledge the country’s developmental challenges and need for natural resources. Cooperation and negotiation are, therefore, key in ensuring water security in South Sudan as well as the other NRB partners.