In January 1899, an agreement between the United Kingdom the Khedivate of Egypt restored Egyptian rule in Sudan but as part of a condominium, or joint authority, exercised by the two countries. The agreement designated territory south of the twenty-second parallel as the Anglo-Egyptian Sudan. Although it emphasized Egypt's indebtedness to Britain for its participation in the reconquest, the agreement failed to clarify the juridical relationship between the two condominium powers in Sudan or to provide a legal basis for continued British governing of the territory on behalf of the Khedive. Article III of the agreement specified that:British possessions, II : The Congo, no. 96-99, H.M. Stationery Office, 1920, page 166

The British governor-general, who was a military officer, reported to the Foreign Office through its resident agent in Cairo. In practice, however, he exercised extraordinary powers and directed the condominium government from Khartoum as if it were a colonial administration. Sir Reginald Wingate succeeded Kitchener as governor-general in 1899.

In each province, two inspectors and several district commissioners aided the British governor (mudir). Initially, nearly all administrative personnel were British Army officers attached to the Egyptian Army. In 1901, however, civilian administrators started arriving in Sudan from Britain and formed the nucleus of the Sudan Political Service. Egyptians filled middle-level posts while Sudanese gradually acquired lower-level positions.

Condominium period

In the condominium's early years, the governor-general and provincial governors exercised a great deal of freedom in governing Sudan. After 1910, however, an executive council, whose approval was required for all legislation and for budgetary matters, assisted the governor-general.

The governor-general presided over this council, which included the inspector-general; the civil, legal, and financial secretaries; the General Officer Commanding the Troops (The Kaid);Hyslop, J. (1952) : “The Sudan Story”, Chapter “The Avenger Brings Peace”, The Naldrett Press, London, UK and two to four other British officials appointed by the governor-general. From 1944 to 1948 there existed also an advisory council for northern Sudan whose functions were advice and consultation. This advisory council had 18 members representing province councils, 10 members nominated by the Governor-General and 2 honorary members.Public Relations Department Sudan Government Khartoum (1951) “Sudan Almanac 1951”, McCorquodale & Co. (Sudan) The executive council retained legislative authority until 1948.

Law and order After restoring order and the government's authority, the British dedicated themselves to creating a modern government in the condominium. Jurists adopted penal and criminal procedural codes similar to those in force in British India. Commissions established land tenure rules and adjusted claims in dispute because of grants made by successive governments. Taxes on land remained the basic form of taxation, the amount assessed depending on the type of irrigation, the number of date palms, and the size of herds; however, the rate of taxation was fixed for the first time in Sudan's history.

The 1902 Code of Civil Procedure continued the Ottoman separation of civil law and sharia, but it also created guidelines for the operation of sharia courts as an autonomous judicial division under a chief qadi appointed by the governor-general. Religious judges and other sharia court officials were invariably Egyptian.

There was little resistance to the condominium. Breaches of the peace usually took the form of intertribal warfare or banditry. Mahdist uprisings occurred in February 1900, in 1902–1903, in 1904, and in 1908 but these revolts were of short duration. In 1916, Abd Allah as Suhayni, who claimed to be the Prophet Isa, launched an unsuccessful jihad.

Undefined borders

The problem of the condominium's undefined borders was a greater concern. A 1902 treaty with Ethiopia fixed the southeastern boundary of Sudan. Seven years later, an Anglo-Belgian treaty determined the status of the Lado Enclave in the south, establishing a border with the Belgian Congo (present-day Democratic Republic of the Congo).

The western boundary proved more difficult to resolve. Darfur was the only province formerly under Egyptian control that was not recaptured during the Anglo-Egyptian conquest of Sudan. When the Mahdiyah disintegrated, Sultan Ali Dinar reclaimed Darfur's throne, which had been lost to the Egyptians in 1874 and held the throne under Ottoman suzerainty, with British approval on condition that he pay annual tribute to the khedive. When World War I broke out, Ali Dinar proclaimed his loyalty to the Ottoman Empire and responded to the Porte's call for a jihad against the Allies. Britain, which had declared a protectorate over Egypt in 1914, sent a small force against Ali Dinar, who died in subsequent fighting. In 1916, the British annexed Darfur to Sudan and terminated the Sultanate of Darfur.

Economic development During the co-dominium period, economic development occurred only in the Nile Valley's settled areas. In the first two decades of condominium rule, the British extended telegraph and rail lines to link key points in northern Sudan but services did not reach more remote areas. Port Sudan opened in 1906, replacing Sawakin as the country's principal outlet to the sea.

In 1911 the Sudanese government and the private Sudan Plantations Syndicate launched the Gezira Scheme (Gezira is also seen as Jazirah) to provide a source of high-quality cotton for Britain's textile industry. An irrigation dam near Sennar, completed in 1925, brought a much larger area in Al Jazirah under cultivation. Planters sent cotton by rail from Sannar to Port Sudan for shipment abroad. The Gezira Scheme made cotton the mainstay of the country's economy and turned the region into Sudan's most densely populated area.

Egyptian independence, fate of Sudan

In 1922, Britain renounced the protectorate and approved Egypt's declaration of independence. However, the 1923 Egyptian constitution made no claim to Egyptian sovereignty over Sudan. Subsequent negotiations in London between the British and the new Egyptian government foundered on the Sudan question.

Inflamed by the failure of the talks, nationalists rioted in Egypt and in Sudan where a minority supported union with Egypt. In November 1924, Sir Lee Stack, governor-general of Sudan and Sirdar, was assassinated in Cairo. Britain ordered all Egyptian troops, civil servants, and public employees withdrawn from Sudan. In 1925, Khartoum formed the 4,500-man Sudan Defence Force (SDF) under Sudanese officers to replace Egyptian units.

Indirect rule Sudan was relatively quiet in the late 1920s and 1930s. During this period, the colonial government favored indirect rule, which allowed Britain to govern through indigenous leaders.

In Sudan, the traditional leaders were the shaykhs (of villages, tribes, and districts) in the north and tribal chiefs in the south. The British first delegated judicial powers to shaykhs to enable them to settle local disputes; then, gradually, they allowed the shaykhs to administer local government under the supervision of British district commissioners. The number of Sudanese recognizing these leaders and the degree of authority they wielded varied considerably.

The mainstream of political development, represented by other local leaders and Khartoum's educated elite, disapproved of indirect rule. In their view, it prevented the country's unification, exacerbated tribalism in the north, and in the south served to buttress a less-advanced society against Arab influence. Indirect rule also implied government decentralization, which alarmed the educated elite who had careers in the central administration and envisioned an eventual transfer of power from British colonial authorities to their class.

Nationalists and the Khatmiyyah opposed indirect rule, but the Ansar (the followers of the Mahdi) supported the British approach since many of them enjoyed positions of local authority.

Britain's policy towards the South

From the beginning of the Anglo-Egyptian condominium, the British sought to modernize Sudan by applying European technology to its underdeveloped economy and by replacing its authoritarian institutions with ones that adhered to liberal English traditions.

Southern Sudan's remote and undeveloped provinces—Equatoria, Bahr al Ghazal, and Upper Nile—received little official attention until after World War I, except for efforts to suppress tribal warfare and the slave trade. The British justified this policy by claiming that the south was not ready for exposure to the modern world. To allow the south to develop along indigenous lines, the British, therefore, closed the region to outsiders. As a result, the south remained isolated. A few Arab merchants controlled the region's limited commercial activities while Arab bureaucrats administered whatever laws existed. Christian missionaries, who operated schools and medical clinics, provided limited social services in southern Sudan.

The earliest Christian missionaries were the Verona Fathers, a Roman Catholic religious order that had established southern missions before the Mahdiyah. Other missionary groups active in the south included Presbyterians from the United States and the Anglican Church Missionary Society. There was no competition among these missions, largely because they maintained separate areas of influence. The government eventually subsidized the mission schools that educated southerners. Because mission graduates usually succeeded in gaining posts in the provincial civil service, many northerners regarded them as tools of British imperialism. The few southerners who received higher training attended schools in British East Africa (present-day Kenya, Uganda, and Tanzania) rather than in Khartoum, thereby exacerbating the north–south division.

"Closed-door" ordinances British authorities treated the three southern provinces as a separate region. The colonial administration, as it consolidated its southern position in the 1920s, detached the south from the rest of Sudan for all practical purposes.

The period's "closed door" ordinances, which barred northern Sudanese from entering or working in the south, reinforced this separate development policy. Moreover, the British gradually replaced Arab administrators and expelled Arab merchants, thereby severing the south's last economic contacts with the north. The colonial administration also discouraged the spread of Islam, the practice of Arab customs, and the wearing of Arab dress. At the same time, the British made efforts to revitalize African customs and tribal life that the slave trade had disrupted. Finally, a 1930 directive stated that blacks in the southern provinces were to be considered a people distinct from northern Muslims and that the region should be prepared for eventual integration with British East Africa.

Although potentially a rich agricultural zone, the south's economic development suffered because of the region's isolation. Moreover, a continual struggle went on between British officials in the north and south, as those in the former resisted recommendations that northern resources be diverted to spur southern economic development. Personality clashes between officials in the two branches in the Sudan Political Service also impeded the south's growth.