Sudan launches a new currency, following South Sudan

People count the old currency before receiving the new Sudanese currency at a branch of the central bank of Sudan in Khartoum Changing currency, the latest element in the gradual separation of North and South Sudan

Sudan has officially introduced a new currency.

The new notes are available in banks and currency exchange points all over Sudan, according to the Central Bank.

The move is a response to South Sudan, which seceded two weeks ago, launching its own currency.

Both economies are likely to suffer, as financial arrangements between the two states are part of several outstanding issues.

The Central Bank hopes all the old notes will have been replaced within three months, but at this point this is not a hard deadline.

The Bank says the new currency is being introduced as a 'precautionary measure', since South Sudan has already brought in its own new currency.

It is estimated up to 2bn Sudanese pounds are in circulation in the new country, which has the potential to destabilise Sudan's economy.

Further talks with the authorities in Juba over over old notes in the South are not ruled out.

'Currency wars'

"We will undertake all precautionary measures to protect the Sudanese economy, and I hope that we will reach an satisfactory agreement for both sides regarding the pound circulating in the South," deputy governor Badr al-Din Mahmoud said in a statement.

The Sudanese authorities are careful to say they do not want a "currency war" but this looks to be exactly what is happening.

Analysts say both economies could face real difficulties if there is no co-ordination between them.

The governments in Juba and Khartoum also have to come to an agreement over oil.

Most of it is in the South, but the infrastructures to export it are in Sudan.

The two sides cannot agree on how much South Sudan should pay to use these facilities.

The financial squabbles highlight the tensions which are likely to complicate life in both countries for the foreseeable future.

Map showing position of oilfileds in Sudan, source: Drilling info international

Both Sudan and the South are reliant on their oil revenues, which account for 98% of South Sudan's budget. But the two countries cannot agree how to divide the oil wealth of the former united state. Some 75% of the oil lies in the South but all the pipelines run north. It is feared that disputes over oil could lead the two neighbours to return to war.

Satellite image showing geography of Sudan, source: Nasa

Although they were united for many years, the two Sudans were always very different. The great divide is visible even from space, as this Nasa satellite image shows. The northern states are a blanket of desert, broken only by the fertile Nile corridor. South Sudan is covered by green swathes of grassland, swamps and tropical forest.

Map showing Ethnicity of Sudan, source:

Sudan's arid north is mainly home to Arabic-speaking Muslims. But in South Sudan there is no dominant culture. The Dinkas and the Nuers are the largest of more than 200 ethnic groups, each with its own languages and traditional beliefs, alongside Christianity and Islam.

Map showing infant Mortality in Sudan, source: Sudan household health survey 2006

The health inequalities in Sudan are illustrated by infant mortality rates. In South Sudan, one in 10 children die before their first birthday. Whereas in the more developed northern states, such as Gezira and White Nile, half of those children would be expected to survive.

Map showing percentage of households using improved water and sanitation in Sudan, source: Sudan household health survey 2006

The gulf in water resources between north and south is stark. In Khartoum, River Nile, and Gezira states, two-thirds of people have access to piped drinking water and pit latrines. In the south, boreholes and unprotected wells are the main drinking sources. More than 80% of southerners have no toilet facilities whatsoever.

Map showing percentage of who complete primary school education in Sudan, source: Sudan household health survey 2006

Throughout the two Sudans, access to primary school education is strongly linked to household earnings. In the poorest parts of the south, less than 1% of children finish primary school. Whereas in the wealthier north, up to 50% of children complete primary level education.

Map showing percentage of households with poor food consumption in Sudan, source: Sudan household health survey 2006

Conflict and poverty are the main causes of food insecurity in both countries. In Sudan, many of the residents of war-affected Darfur and the border states of Blue Nile and South Kordofan, depend on food aid. The UN said about 2.8m people in South Sudan would require food aid in 2013. The northern states tend to be wealthier, more urbanised and less reliant on agriculture.

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