The Sudan Handbook

144 thE sudan handbook

Half of the net revenue from oil produced in the south is supposed to

be transferred to the GoSS. The central government also made specific

undertakings to transfer funds to Darfur and to the east of the country

as a result of separate peace agreements signed in 2006. Northern state

governments have been receiving significant transfers through a decen-

tralization process overseen by the Fiscal and Financial Allocation and

Monitoring Commission. Even though not all of the promised trans-

fers have been made, and the process itself has been deeply flawed and

politicized, the increased earmarking has compromised efforts to control

spending. Consequently, after showing small surpluses in 2003–04, the

budget moved back into deficit from 2005, and domestic arrears began

to increase.

As ministries were unable to pay their contractors, there was a knock-on

impact on the banking sector, with a sharp rise in non-performing loans

-20- 15 -10- (^50) %GDP
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
% GDP
fiG 8.2 Sudan’s fiscal deficits 1999–2009
The Sudan Handbook, edited by John Ryle, Justin Willis, Suliman Baldo and Jok Madut Jok. © 2011 Rift Valley Institute and contributors
(www.riftvalley.net).