Incoming Sudan govt will inherit $8.7-9.2bn trade deficit & business environment beset by corruption

NOTE from Sudan Watch Editor: Here is an interesting thread of tweets by Sudanese economist Yousif Elmahdi posted on his Twitter page 02 August 2019 @Usiful_ME. 

Note, in the final tweet Yousif reveals the source of his data is as follows: Macro data is from IMF;  agriculture productivity estimates come from a private sector study commissioned by government;  export data is from a mix of sources. 

Yellow highlighting is mine for future reference. I have used green to highlight Yousif's sense of humour.

Yousif Elmahdi

The incoming #Sudan government will be inheriting an economy highlighted (as of 2018) by:

— $8.7-9.2bn trade deficit 

— Fuel subsidy of 8% GDP (over $3bn)

— Wheat subsidy of around $500m, on top of $800m import bill 

— 60% power coverage deficit (4,000 megawatts)

• Yousif Elmahdi
  Alongside this:
• — International reserves were as low as $1bn gross by end-2018. 
• — In reality, there are no reserves because the budget deficit meant Central Bank was financing a parallel budget. On-budget expenditure was covering roughly:
• Yousif Elmahdi
  - All of Chapter 1 (wages and salaries), of which 20-25% security sector wages.
• - 30% of Chapter 2 (capital expenditure)
• Yousif Elmahdi
  — Tax to GDP ratio was 6%. For reference, sub-Saharan Africa average is around 18%.
• Yousif Elmahdi
  — Oil production declined from 160,000 to 70,000 barrels, all of it consumed locally (w/ deficit imported) covering around: 
• - 30-40% diesel needs. For reference, total diesel consumption composition is est: 50% transport sector; 10% industry; 10% agriculture; 5% general)
• Yousif Elmahdi
  - 40-50% gasoline needs. For reference some of locally produced gasoline is exported to Ethiopia in exchange for 100-200 megawatts power. 
• - 70-80% LPG needs.
• Yousif Elmahdi
  — Gold production estimated at 100 tonnes ($4bn), but only 20/30 tonnes ($1.5bn) accounted. 80% artisan produced.
• Yousif Elmahdi
  — Agriculture sector v. low productivity and high cost of 45 million cultivated acres: 44m rain-fed; 1m irrigated (against 5m capacity). 
• Some examples: 
• - 8 million acres sesame: 100kg/acre ($300m exports). For comparison, Turkey produces around 1,700kg/acre.
• Yousif Elmahdi
  Another example:
• - 2 million acres sorghum: 3 sacks/acre ($20-60m exports).
• Yousif Elmahdi
  — Business environment beset by corruption, especially around natural resources.
• - State-owned enterprises completely off-budget, no forensic audit etc.
• Yousif Elmahdi
  To fill gap: 
• — Govt. monetized (printed money), especially as couldn’t sell debt due to lack of credit worthiness of Govt. bonds. 
• -> Inflation 73% by end-2018.
• — KSA and UAE also provide $100m monthly in fuel, wheat, medicine, fertilizer etc.
• Yousif Elmahdi
  In the backdrop you have:
• — Real exchange rate that’s hugely overvalued. This of course:
• - renders the whole economy uncompetitive
• - while different exchange rates create distortions (80% transactions in parallel market).
• Yousif Elmahdi
  Given this context, the new government’s priorities must necessarily include:
• 1. Competitive exchange rate 
• 2. Tax reform 
• 3. Business climate reform (including banking sector) 
• 4. Infrastructure (especially energy sector)
• 5. Agriculture 
• 6. Health and Education
• Yousif Elmahdi
  The key priority, however, for new #Sudan Govt. will be to find the resources to finance all of this; to fill the budget deficit; and to cushion the poorest.
• Yousif Elmahdi
  On the latter, previous government social safety net program reached 500-600,000 families against 800,000 target. 
• With poverty rate currently estimated around 36%, about 3 million families (today) need same level of support. 
• Gap is around 1% GDP (based on $5/month support).
• Yousif Elmahdi
  Above all, any reform measures need to be grounded in citizen engagement, trust and awareness building, and transparency.
• Yousif Elmahdi
  A few additional points to this thread:  
• — Any serious & sustainable reform package would have to include (as priority) removal of fuel & wheat subsidies, esp. fuel. 
• - #Sudan fuel prices are amongst lowest in the world and the country simply can’t afford to maintain these
• Yousif Elmahdi
  Difficulty with fuel is that once the subsidy is removed, even if gradually or partially, prices will sky rocket across the entire economy. 
• We would be dealing with the sorts of numbers (in the 000s) you hear in some other countries across the continent.
• Yousif Elmahdi
  Exchange rate competitiveness would also entail initial inflationary pressures, but ultimately helps private sector development by improving competitiveness.
• Yousif Elmahdi
  Ramifications in the short to medium term would be severest on those whose incomes are not inflation adjusted (public sector especially), and on the poorest. 
• In theory, some of the savings could be directed towards expanding social safety nets and adjusting public sector wages
• Yousif Elmahdi
  Ultimately the public sector is severely bloated due largely to excessive administrative structure. 
• This would need to be reformed at some point but I won’t get into this rabbit hole right now.
• Yousif Elmahdi
  Basically, the medicine will be very bitter, for very long before it’s positive effects can start to be felt. 
• Postponing it only exacerbates magnitude of problems to be addressed. This is what previous regime did, ironically because of regime sustainability considerations.
• Yousif Elmahdi
  Previous regime structured economy in this way also for regime sustainability considerations (and perverse incentives) and could afford it while it had substantial oil revenues.
• Yousif Elmahdi
  What works in incoming transitional government’s favor is that it won’t be encumbered by election mandate or future election campaign. 
• In terms of resourcing it would potentially have many friends.
• Yousif Elmahdi
  So in theory provides an ideal platform to initiate difficult and politically divisive reforms. 
• However, this assumes the coalition remains stable, Cabinet is well constituted, and public trust can be quickly gained and sustained.
• Yousif Elmahdi
  On wheat imports (approx. $800m), I’ve heard that the major mills believe actual import needs are around $500m i.e. substantial amount of smuggling when you add on the subsidy (approx. $500m).
• It’s believed Khartoum consumes 65% of actual wheat needs.
• Yousif Elmahdi
  Staying on agriculture, livestock is a significant export source, generating around $800m from 5 million heads. 
• But when you consider total livestock population, this is paltry, and largely due to lack of transport infrastructure.
• Yousif Elmahdi
  Value could also be significantly increased by exporting as meat (instead of live) but at present the infrastructure and value chains don’t exist.
• Yousif Elmahdi
  I sincerely hope those that assume power will recognize this and will be bold, empowered and supported to initiate reversal. We will need a significant leap in transparency and citizen engagement.
• Yousif Elmahdi
  @Fahad55121907  @Omer58606983  Macro data is from IMF. Agriculture productivity estimates come from a private sector study commissioned by government. Export data is from a mix of sources.
• 
  
• To visit and view the above series of tweets at Yousif's Twitter page click here:  https://twitter.com/Usiful_ME/status/1157545777243316227

State-run co along with JV partners China, Malaysia upset as oil dues from Sudan rise to $500 million

SUDAN had denied ONGC and partners an extension of license to operate block 2B after the initial contract expired in November 2016. State-run company along with JV partners China, Malaysia are upset as oil dues from Sudan rise to $500 million. Full story below.

Article by Economic Times.india

By Sanjeev Choudhary, ET Bureau, 02 Aug 2019 09:32

ONGC, its partners likely to exit oil blocks in Sudan

NEW DELHI: ONGC and its Chinese and Malaysian partners have decided to exit their oil blocks in Sudan, frustrated by the years of reluctance by the Sudanese government to pay for the oil it lifts from these blocks.

ONGC has been engaged in an arbitration with Sudan for more than a year to recover its oil dues that have now climbed to $500 million. 

ONGC owns 25% stake in a joint venture that operates blocks 2A and 4 in Sudan whose output the local government had been lifting but not paying for since 2011. The balance stakes in the two blocks are split between China’s CNPC (40%), Malaysia’s Petronas (30%) and Sudan’s Sudapet (5%). 

“The company has reviewed the geopolitical situation in Sudan and has considered the option for exit from the operations in Block 2A, 4 in terms of article 14.1 of the JOA. The intention in this regard has been conveyed to the government of Sudan on 10 May 2019,” ONGC Videsh, the overseas arm of the state-run explorer, said in its financial statement. “Consequently, the company has provided Rs 5,979.71 million against the associated oil and gas and other assets in its consolidated financial statement.”

The amount being provided for is the carrying value of the oil assets in blocks 2A and 4 of Sudan, said a person familiar with the matter, adding that the project has already paid back the investment. 

ONGC Videsh declined comment for the story. 

The joint venture partners have requested Sudan to terminate the production license by August 31 and are awaiting a formal order from the government, the person quoted above said. 

Meanwhile, arbitration tribunal at the International Court of Justice has been formed to deal with the ONGC’s request for recovery of oil dues from Sudan. At the request of Sudan, the tribunal had suspended arbitration proceedings by three months until August 2, the person said. 

In 2003, ONGC Videsh had acquired 25% stake in the joint venture, Greater Nile Oil Project, which comprised blocks 1, 2 and 4, located about 800 km from Sudan’s capital Khartoum. After South Sudan was carved out of Sudan in 2011 following years of civil strife, all the blocks were split between the two countries. 

Sudan had denied ONGC and partners an extension of license to operate block 2B after the initial contract expired in November 2016.

Operations at blocks in South Sudan resumed this year after being shut for five years due to security issues. 

View original article here: https://economictimes.indiatimes.com/industry/energy/oil-gas/ongc-its-partners-likely-to-exit-oil-blocks-in-sudan/articleshow/70490872.cms

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USAID 2001 Sudan Oil & Gas Concessions Map

To view a larger version of the following 2001 Sudan map from Wikipedia click here.  

Click, once or twice, on the image at Wikipedia to see full screen size.

Peace in Darfur & Sudan: Impoverishment of millions of people is getting worse - Some form of council of all military actors will be necessary (Alex de Waal)

• The material basis for the civic uprising – the impoverishment of millions of people – is getting worse
• Peace in Darfur, Southern Kordofan and Blue Nile will not be achieved by the FFC forming a civilian government and asking the armed groups to join
• The numerous security actors (military, paramilitary, armed groups, militia) can only implement a set of security reforms by consensus. Some form of council of all military actors will be necessary

Article by Dr Alex de Waal

Dated Friday, 02 August 2019

Sudan’s political marketplace and the prospects for democracy

A political marketplace analysis of Sudan, argues Alex de Waal, is an important tool for democracy activists to understand the power base of the military council.  

Its predicament lies in the fact that the council’s strategy for managing power, by exchanging material rewards for allegiance, can only work in the short term, at the cost of accelerating the same political-economic dynamics that brought down President al-Bashir.

As Sudan’s military rulers and the pro-democracy coalition of Forces for Freedom and Change (FFC) resume their fraught negotiations over the composition of a civilian government, real power is being transacted according to a different logic – the political marketplace.

A political marketplace analysis of Sudan is an important tool for democracy activists to understand the power base of the forces they are confronting. Otherwise the leaders of the FFC risk finding themselves with formal responsibility for a political apparatus that runs according to a set of logics they simply cannot control.

The deputy chair of the Transitional Military Council (TMC) and de facto ruler of Sudan, General Mohamed ‘Hemedti’ Dagalo, is energetically cutting political-financial deals to stay on top of the country’s tumultuous politics. His is using money from the Gulf and gold trading to try to buy enough loyalty to subordinate or eliminate rivals. Hemedti’s immediate challenges arise from members of the ousted establishment, who fear his rule and what it entails. He also faces a looming political-economic crisis, which cannot be solved while he remains dependent on his current sources of political financing.

The paper Sudan: A Political Marketplace Analysis analyses the development of the country’s political economy and political market since independence, with particular attention to its last three phases: the oil-based centralised kleptocracy of the 1999–2011 period; the post-oil transition to a political market funded largely by gold, smuggling and mercenarism; and the situation today following the April 2019 revolution. 

The key lessons are that the shift from oil-based rentierism to reliance on licit and illicit gold sales, and hiring out troops to fight in Yemen, shifted the financial basis of power from the National Congress Party establishment to General Hemedti and his paramilitary Rapid Support Forces (RSF).

Both types of rentierism undermined Sudan’s long-term economic development. But reliance on gold and mercenarism also generated a new model of political financing, in which Sudan’s macroeconomic policy (and especially the activities of the Central Bank) had to be subordinated to political market calculations. 

In order to ensure that small-scale gold traders who buy gold from artisanal miners sell it to official channels, rather than smuggle it across the border, the key decision taken was that the Central Bank of Sudan would purchase the gold at an inflated price in Sudanese pounds – and print money to fund this. The result is inflation, which deprives wage-earners in the towns and in the commercial agricultural areas, and which rewards the paramilitaries and associated traders who control gold and foreign exchange.

Since the overthrow of President Omar al-Bashir in April, this political market power configuration has not changed. In fact, it has intensified.

The TMC-FFC negotiations deal only with the façade issues of the composition of the civilian organs of government and not the real sources of power: who controls the gold, the foreign exchange, and the guns. A civilian government emerging from today’s negotiations would be impotent to address Sudan’s real problems.

Meanwhile, the crux of the Hemedti regime’s predicament lies in the fact that its strategy for managing power by exchanging material rewards for allegiance can work in the short term, but only at the cost of accelerating the same political-economic dynamics that brought down President al-Bashir. The cash bailouts that the regime is receiving from Saudi Arabia and the UAE are not enough to square the circle of meeting his own needs for political payouts and also stabilising the economy.

In fact, the material basis for the civic uprising – the impoverishment of millions of people – is getting worse. Alongside continuing high-profile human rights violations by the RSF and other security forces, this continues to give the FFC enormous credibility and leverage when it brings people on to the streets.

The challenge for the civilian administration is not who is represented, but what is the reform agenda? Does it have political acceptance? And can it be implemented? There are three key sets of issues that need to be resolved prior to establishing a credible civilian executive.

The first is political buy-in to fixing the economy. This is where the political marketplace analysis is crucial.

At present, General Hemedti is making the Government of Sudan subordinate to his transnational mercenary and gold business. While this power hierarchy prevails, Sudan cannot achieve economic stabilisation or democracy.

Technocratic reform will require winning a political contest. That requires convening the business sector, the Middle Eastern sponsors and the donors and international financial institutions to agree on a plan. 

This will demand taking control of fiscal and monetary policy by a strong Ministry of Finance and Economic Planning and making the Central Bank of Sudan a tool for a technocratic government, not a mint for the dominant faction. 

Key to success will be for the Gulf states to recognise that Sudan’s economic stability (and also the viability of their own investments in agriculture, industry and trade) depends upon them taking a different approach to funding Hemedti and the TMC, and regulating Sudan’s gold trade as well.

The second is an inclusive peace process – a longstanding demand, based on historical inequalities in power and wealth. This isn’t a political marketplace challenge, though the regime will try to use divide-and-rule and monetary payoffs to achieve something that looks like a peace deal.

The leaders of the armed groups have seen this before and are not likely to succumb. Nor will peace in Darfur, Southern Kordofan and Blue Nile be achieved by the FFC forming a civilian government and asking the armed groups to join. The leaders of the armed groups resent this condescension: they may disagree tactically and be prone to division, but they share the same fundamental concerns.

Third is stabilising the security arena. Conventional security sector reform cannot be achieved without a consolidated security sector, which does not exist. In fact, the paramilitary RSF is today the dominant actor, with the army subordinate and the National Intelligence and Security Service vanquished. 

The RSF is emerging as a transnational military-commercial business enterprise. However, it has neither the power nor the legitimacy to enforce its writ. 

The numerous security actors (military, paramilitary, armed groups, militia) can only implement a set of security reforms by consensus. Some form of council of all military actors will be necessary.

This post first appeared on LSE’s Conflict Research Programme blog. 

About the author

Alex de Waal is the Research Programme Director for LSE's Conflict Research Programme, an adviser for the Centre for Public Authority and International Development and Director of the World Peace Foundation at Tufts University.

SOURCE: https://blogs.lse.ac.uk/africaatlse/2019/08/02/sudan-political-marketplace-democracy/

Since 2004 EU has provided €2.7 billion to support African solutions to African problems

JOINT PRESS RELEASE

22 July 2019

African Peace Facility: African Union Peace & Security Operations boosted by an additional €800 million from the European Union

Addis Ababa, 22 July, 2019: The Chairperson of the African Union Commission, Mr. Moussa Faki Mahamat and the EU Commissioner for International Cooperation and Development, Neven Mimica today announced the signing of an agreement through which the EU commits a further €800 million to support the AU in its efforts to promote peace, security and stability in Africa within the context of the continued implementation of the African Peace and Security Architecture.

“This is a commendable milestone in a long history of EU support to Africa, and is in line with the African Peace and Security Architecture and African-led efforts to silence the guns,” said Chairperson Moussa Faki “I also commend the African contributions to the recently revitalized Peace Fund, which demonstrates the commitment to African ownership of peace and security operations on the continent.”

Commissioner Mimica said “Europe remains Africa’s first partner in the area of peace and security. Since 2004, the African Peace Facility has provided €2.7 billion to support African solutions to African problems. Most of the additional €800 million announced today will go to peace support operations led by our African partners.”

Under this phase of the African Peace Facility, the EU will support 

(i) the strengthening of conflict prevention, management and resolution structures and mechanisms of the African Peace and Security Architecture; 

(ii) AU efforts to establish a continental Human Rights and international humanitarian law compliance framework; 

(iii) an Early Response Mechanism which will provide the African Union with quick funding for preventive diplomacy initiatives, mediation, fact-finding missions, and the first stages of peace support operations; 

(iv) the financing of African-led peace support operations, such as the Multinational Joint Task Force (MNJTF) against Boko Haram, the African Union Mission to Somalia (AMISOM) or the G5 Sahel Joint Force specifically, with regards to capacity building, troop allowances, non-lethal equipment. It will also support efforts of the AU to promote gender and human rights principles and practices in peace support operations.

Media contacts:

Mrs Esther Tankou Azaa Yambou, Head of Division: Directorate of Information and Communication, African Union Commission, Tel: +251(0) 911361185, E-mail: YambouE@african-union.org

Mr Biruk Feleke, Press & Information Officer, Delegation of the European Union to the African Union, Tel: +251(0) 911514809 biruk.feleke@eeas.europa.e

SOURCE:https://au.int/en/pressreleases/20190722/african-peace-facility-african-union-peace-security-operations-boosted

EU stops funding EU-Horn of Africa Migration Route Initiative or Khartoum process

Article from Forbes.com

By FREY LINSDAY

Dated Tuesday 06 August 2019, 09:26am

The EU Says It Has Stopped Giving Money To Sudan For Migration Control

In late July, the EU said it had suspended projects related to migration and border control in Sudan and the surrounding countries. 

Until recently, the bloc was giving money to the Sudanese authorities in exchange for them preventing migrants from sub-Saharan Africa heading northward. That arrangement has now been at least temporarily halted.

These projects are collectively referred to under the banner of the EU-Horn of Africa Migration Route Initiative, or more simply, the "Khartoum process." The material and funds provided through the process have very likely been used to entrench the power of the Sudanese authorities and the paramilitary Rapid Support Forces and have possibly directly contributed to the violence we are now seeing in Sudan.

Less well known than similar EU arrangements with Turkey and Libya, the Khartoum Process (KP) serves nonetheless a similar purpose. 

"The Khartoum Process is basically about extraterritorial control of migration on the whole," says Dr. Mohamed Babiker of the University of Khartoum. "It is actually using Sudan as a buffer zone to control migration."

The process was born around the same time as the Valletta Conference on Migration which took place in 2015, amid the turmoil of the migrant crisis. The EU Trust Fund For Africa was created at the conference and endowed with hundreds of millions of euros for, in the EU's words, "stability and addressing root causes of irregular migration and displaced persons in Africa." 

Babiker says it does not address the root causes of migration at all.

"It doesn't take into consideration the dynamics in the region, the concerns of the population in terms of their aspirations for development and human rights protection and living a decent life."

Instead, he said, it is a way for the EU to outsource migration control to other countries, ostensibly for their own protection but just as much to prevent them reaching Europe, as with the Turkey-EU deal.

Babiker said that over the last few years in Sudan he has seen many EU-funded training programs run under the KP umbrella. They did not appear to him to be addressing the root causes of migration:

"The main focus was border management, running the borders rather than actually dealing with core issues related to the root cause of migration and also human trafficking, refugee protection. The main purpose behind the Khartoum Process is to control the borders.  That's why we call it extraterritorial control."

But the implications of the Khartoum Process go further than just outsourcing the EU's migrant problems, which has been a fairly established policy tool for the bloc since the migrant crisis.

Conflict is nothing new to Sudan, but since long-time ruler Omar al-Bashir was overthrown in April, the country has descended into violence as pro-democracy demonstrators clash with, or more accurately are brutally attacked by, the army and the paramilitary Rapid Support Forces (RSF), under the control of a council of army generals who took power in April.

While it has not been proven that the material resources provided to the Sudanese authorities by the EU through the Khartoum Process have flown directly to the RSF, they no doubt contributed to their ability to build patrolling and enforcement capacity in the region. In any case, Babiker said the resources were delivered with almost no requirement for accountability once received by Sudan: "These are not accountable governments. So the funding normally ends up entrenching and empowering abusive forces like security operators."

"There are so many questions to be asked about the EU policy with respect to the fact that the RSF has shown its hand as a brutality repressive force," says Maddy Crowther, Co-Executive Director of Waging Peace, a London-based human rights organization which focuses on Sudan. She says that while now might not be the right time to interrogate the Khartoum Process, the priority being of course the current conflict, the process will eventually need to come under serious review. "It will be a travesty if the EU isn't asked really tough questions about how they got to a situation where they were possibly complicit in human rights abuses and atrocities."

Even apart from these very serious concerns, academics such as Babiker and his colleague Lutz Oette of University of London’s School for Oriental and African Studies, say the Khartoum Process was flawed from the start.

For one thing, Babiker points out that migration control is unlikely to be well enforced, or even desirable, in a region where tribal communities exist across, and often pass over, relatively arbitrary colonial borders: "As a policy, it wouldn't work because the concept of borders does not exist."

Moreover, putting responsibility for migrant welfare in the hands of a government with a poor human rights record is a terrible idea in and of itself.

"Our analysis of (the first phase of the Khartoum Process) highlighted the risks for refugees and migrants in Sudan, several of whom were deported to Eritrea where they faced persecution," says Oette. "Others were subjected to ill-treatment in Sudan. There have also been reports that Sudanese forces colluded in smuggling and trafficking."

Oette says with the Rapid Support Forces, who have also been accused of serious crimes in Darfur, in charge of border controls there is little reason to think they will be satisfying the ostensibly humanitarian aims of the Khartoum Process.

"The violence unleashed in Sudan, particularly by the Rapid Support Forces, a key player in enforcing migration controls, serves as an epitaph for an ill-conceived partnership, and as a lesson for policymakers to learn from past failings. The Khartoum Process, particularly Sudan's role, needs a fundamental rethink and new approach."

Oette and Babiker argue that any future collaboration on migration between the EU and countries in the Horn of Africa needs to be evidence-based and well considered, with a goal that goes beyond short-term expedience: "This means looking at the situation on the ground, genuinely engaging with the people concerned, tackling the broader governance problems, and developing an empirically grounded mid-to long-term strategy."

Babiker says that if the EU does want to reduce migration from and through Sudan, it would do best to focus its efforts on helping the country stabilize.

"The EU should put its weight into resolving the Sudanese issue; pushing for democratic transformation and rule of law. Because the result will be counter-productive if the same old approach is followed in terms of controlling migration. One of the policies that needs to be adopted is actually a stable Sudan, a democratic Sudan, where people have rights and can enjoy the rule of law."

Follow me on Twitter.

Frey Lindsay

I am a journalist focussed on business, migration and how the two intersect. As host and producer of the Migrant Crisis Podcast, I covered the massive upheavals across Europe and the world over the last few years, telling stories on the ground from such flashpoints as the Greek islands, Australia and the Serbia/Hungary border. Previously I was a reporter at verdict.co.uk and Share Radio, and my work has also appeared in World Finance Magazine and the Frankfurter Allgemeine Zeitung. Follow me on twitter @FreyLindsayMCP, or email me on friederik.lindsay@gmail.com. 

SOURCE: https://www.forbes.com/sites/freylindsay/2019/08/06/the-eu-says-it-has-stopped-giving-money-to-sudan-for-migration-control/#621ab7f47faf

EU hails signing of constitutional declaration in Sudan

The European Union welcomed Sudanese parties reaching agreement on a constitutional declaration on 4 August.

Article from New Europe.eu

Dated Monday, 05 August 2019 11:52. 

EU hails signing of constitutional declaration in Sudan

Excerpt:

"At this historic moment, we commend the determination and sense of responsibility of the two parties as well as the longstanding efforts of the African Union/Ethiopian mediation" the Union said in a statement.

“The EU is committed to support Sudan on its way towards peace, democracy and prosperity and will work with the civilian-led transitional government to that end”, the statement concludes.

SOURCE: https://www.neweurope.eu/article/eu-hails-signing-of-constitutional-declaration-in-sudan/

UK Serious Fraud Office investigates De La Rue over South Sudan operations

Note from Sudan Watch Editor: What a story, you could not make this up. The UK's Serious Fraud Office (SFO) is investigating the world’s biggest printer of banknotes over suspected corruption in South Sudan. 

Shares of the 206-year-old UK company De La Rue producing Bank of England notes have more than halved in past year.  The company produces notes for countries worldwide and is also the biggest commercial printer of passports. De La Rue said it was cooperating with the SFO.

Full story in two news reports here below.

Article from The Guardian

By SEAN FARRELL

Date: Tuesday, 23 July 2019 20.25 BST

Serious Fraud Office investigates De La Rue over South Sudan operations

The Serious Fraud Office is investigating the world’s biggest printer of banknotes over suspected corruption in South Sudan.

The SFO said it was examining how the UK company De La Rue, which produces notes for the Bank of England, and associated individuals conducted business in the African country.

De La Rue said it was cooperating with the SFO, which investigates serious fraud, bribery and corruption. The Basingstoke-based company and the SFO declined to give further details about the investigation.

“Given the early stage of these matters, it is not possible to predict reliably what effect their outcome may have on De La Rue,” the company said.

De La Rue has done business with South Sudan since the country was established in 2011, designing and printing the country’s banknotes. The company produces notes for countries worldwide and is also the biggest commercial printer of passports.

The SFO’s attention adds to problems for De La Rue, which is looking for a new chief executive after Martin Sutherland agreed to leave following two profit warnings and the loss of a £490m contract to print the UK’s post-Brexit blue passport.

De La Rue shares closed down 15.8% at 251p on Tuesday. The shares have more than halved in the past year as the company has suffered poor trading and a series of setbacks.

The 206-year-old firm reported a 77% drop in annual profit in May and warned that profit would fall further this year as it faced tough competition. After losing out to a foreign rival to print the new UK passport, Sutherland said the decision risked jobs and that he would appeal, but gave up a month later.

De La Rue’s chairman, Philip Graham Rogerson, will step down once Sutherland’s replacement is found. The company’s senior independent director has also said he will quit by the end of 2019.

Rogerson and De La Rue’s board will face unhappy shareholders at its annual general meeting on Thursday. 

Last week the company rejected a call by its third-biggest shareholder, Crystal Amber, for Rogerson to stand down at the AGM. The activist investor has repeatedly criticised Rogerson’s performance.

The SFO has investigated De La Rue twice in the past 12 years. In 2010 it notified the SFO that some employees had falsified paper specification certificates, costing it at least £35m. Another investigation launched in 2007 was closed with no action taken against the company or employees.

SOURCE: https://www.theguardian.com/law/2019/jul/23/serious-office-investigates-de-la-rue-over-south-sudan-operations

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Article from The Northern Echo, UK

By NICK GULLON

Reporter (Tees Valley)

Date: 23 July 2019

'Suspected corruption' investigation at De La Rue's South Sudan business

Photo: A rare look inside De La Rue Gateshead

SHARES in a North-East passport and bank note manufacturer dived yesterday after it said the Serious Fraud Office (SFO) has opened an investigation into "suspected corruption" related to business in South Sudan.

De La Rue, which has a plant in Gateshead, saw shares dive 12 per cent after it informed investors about the investigation.

In a short update to shareholders, De La Rue said: "The UK Serious Fraud Office has informed De La Rue that it has opened an investigation into the De La Rue group and its associated persons in relation to suspected corruption in the conduct of business in South Sudan.

"Given the early stage of these matters, it is not possible to predict reliably what effect their outcome may have on De La Rue."

It said that it intends to co-operate with the SFO in relation to the investigation and said it will provide a further update when appropriate.

De La Rue has worked in South Sudan since first designing and manufacturing a new currency for the country's creation in 2011.

The Basingstoke-based printer has already had a turbulent month, after it blamed the Government’s decision last year to give the post-Brexit passport printing contract to a French company for the potential loss of 170 jobs in Gateshead.

Trade union Unite said the announcement that the company has begun consultation on the future of 170 skilled printing jobs working on the foreign currency contracts came on top of the 100 passport printing jobs due to go in the autumn.

It added the Government’s "short-sighted and blinkered decision" had "seriously undermined" the financial viability of the Gateshead operation.

If the redundancies go ahead, there will still be 200 workers doing currency printing at Gateshead.

A De La Rue spokesperson said at the time: “As the world’s largest commercial banknote printer we regularly review our operational footprint to ensure it meets demand. We are in the final stages of a restructuring programme to ensure we continue to be competitive."

Shareholders are due to vote on the future of chairman Philip Rogerson, as well as executive pay, at the company's annual general meeting tomorrow.

The company is also in the midst of a leadership reshuffle after chief executive Martin Sutherland announced in May that he would quit the firm following a string of profit warnings.

Last week, the firm hit out at Crystal Amber, its third-biggest investor, and described its threats against the chairman as "precipitous and destabilising".

Passport contract 'comes home to roost' with potential loss of 170 jobs at De La Rue

SOURCE: https://www.thenorthernecho.co.uk/news/17789795.39-suspected-corruption-39-investigation-de-la-rue-39-s-south-sudan-business/

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Corruption with African countries??? Printing currency? -----No sh!t Sherlock!!