March 30 (Bloomberg) -- Southern Sudan plans to release its own currency when it declares independence in July as the region establishes a financial system to manage its oil wealth.
Called the South Sudan pound, the value of the currency will be controlled in a “managed float” by the Bank of Southern Sudan, which will serve as the central bank of the independent nation, its director general, Othom Rago Ajak, said in an interview.
“We have not decided how many pounds to the dollar,” Finance Minister David Deng Athorbei told reporters yesterday in Juba, Southern Sudan’s capital. A European company is printing the currency, he said, without naming it. “We are still maintaining some secrecy because we are still not yet an independent country.”
The printer of the South Sudan pound will release the new notes once either the U.S. or the U.K. recognizes Southern Sudan as an independent nation, Athorbei said. Almost 99 percent of Southern Sudanese voters chose to secede from the north and form an independent country in a January referendum.
At independence, Southern Sudan will assume control of about three-quarters of Sudan’s current oil production of 490,000 barrels a day, pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp.
The two regions currently split revenue from sales of oil pumped in the south. Southern Sudan receives its share in either dollars or euros, Ajak said on March 26.
Still unsettled is the issue of what to do with the old Sudanese pounds that Sudan has been using since the north and the south signed a peace agreement in 2005 that ended a two-decade civil war. The authorities in Khartoum, Sudan’s capital, are also planning to issue a new currency.
“There are still discussions on how to get rid of this currency when the south gets its new currency,” Rabie Abdel Ati, a senior member of President Umar al-Bashir’s National Congress Party, said by phone today from Khartoum. “If the south prints a new currency, this means the north has to change its currency as well.”
Southern Sudan wants the north to buy back the old pounds, Ajak said.
The authorities in Khartoum have proposed either destroying the old notes in Southern Sudan or transporting them back to the north, Gabriel Changson Chang, the south’s minister of culture and a member of the committee negotiating financial issues with the north, said during a March 27 interview in Juba.
“Either collect them and send them to the north and they will only pay for transport or the north will send a witness to watch us burn all of the notes,” he said.
To contact the reporter on this story: Matt Richmond in Juba via Johannesburg at firstname.lastname@example.org.
To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at email@example.com.