Sudan reportedly blocks South’s oil shipment

KHARTOUM — A group of South Sudanese rebels formerly linked to militia leader Peter Gadet, who agreed to a ceasefire this week, accused him on Thursday of taking government bribes and rejected the peace deal.

Gadet, one of the fledgling country's most powerful rebel leaders, returned to Juba on Wednesday, after secret talks with South Sudanese officials in Nairobi, to accept an amnesty offered by President Salva Kiir, his spokesman Bol Gatkouth said.

But in a statement signed by six rebels claiming to represent the high command of Gadet's South Sudan Liberation Movement/Army, the splinter faction disowned his accord with the government, adding that it had not affected the group, which remained "well organised with 780 officers and a force of 5,000."

"We the undersigned members of the SSLM/A High Command are hereby alerting the people of South Sudan and international community that no ceasefire has ever been declared between our movement and government in Juba."

The rebels said Gadet only agreed to the ceasefire after he was offered $3 million (2.1 million euros) and a villa in Nairobi's suburbs, in return for his assistance in neutralising a planned coup against the president.

Gatkouth, Gadet's spokesman, dismissed the claims and accusations of the group, which he said had nothing to do with the SSLA.

He suggested they were "Nuer elements" within the Sudanese army, referring to one of South Sudan's main ethnic groups, and that they were supported by political opponents in Khartoum and by Sudan's military intelligence.

Juba has traditionally accused Khartoum of supporting the different southern rebel groups in a bid to destabilise the country, as it did during the devastating 1983-2005 civil war, claims rejected by the north.

The rebels, in their statement, said the original reasons for them taking up arms against the government remained.

"We took up arms because we realised that our nation had groomed a monster that would swallow generation after generation in terms of bad leadership and extreme level of corruption which poisons our values and tradition."

The group, led by James Gai Yoach and claiming to be based in Mayom County, in oil-rich Unity state, Gadet's stronghold, called for the formation of a legitimate broad-based government as a necessary condition for order and stability.

South Sudan official warned that shipment delay could inflict penalties on Juba according to the terms of the contract with the buyers. He provided no details on who the sale was made to or the price.

The oil-rich nation became an independent state last month after its citizens voted almost unanimously in favor of secession from the Arab-Muslim dominated north. But the latter contains the infrastructure and pipelines that transports the oil from the landlocked South to Port Sudan.

Both sides are still negotiating the transit fees to be assessed per barrel for usage of the pipelines. The figures proposed by Khartoum initially were called "daylight robbery" by Juba.

South Sudan officials have threatened to seek other venues to export their oil and rejected any revenue sharing arrangement similar to the one that was in place prior to July 9th.

The first oil shipment containing 1 million barrels was made in July out of Port Sudan without any issues.

But many observers believe that there are mounting signs of an economic warfare between the two countries.

In recent weeks Khartoum and Juba traded accusations over the almost simultaneous introduction of new currency in the two countries.

The ruling National Congress Party (NCP) in Sudan said that the South breached an understanding that the North and South would maintain one currency for an interim period of at least six months.

Furthermore, the situation got more tense after Sudan said it rejected a request from the South that old Sudanese pound in circulation in the new country be exchanged with foreign currency or used in bilateral trade.

It is estimated that $700 million worth of old Sudanese pound is circulated in South Sudan. Khartoum said it has taken measures to prevent the old notes from being sneaked from their Southern neighbor.

This week, the Central Bank of South Sudan reduced the window for exchanging the old Sudanese pound from 90 days to 45. The North on the other hand said banks would open once again over the Friday-Saturday weekend to allow citizens to get new notes to "speed up" the process.

While the South would be hit if the old pound it had bought for dollars in the run-up to independence would be worthless, there is also a risk for the north: If the south tried exporting old notes back there it would add to inflationary pressures.