IMF Staff Completes Mission for a Staff-Monitored Program to Sudan
IMF News, June 23, 2020
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- Published: June 23, 2020
Mission overview
- An IMF mission led by Mr. Daniel Kanda held virtual meetings with the authorities from June 8-21, 2020 to discuss a reform package and a requested 12-month Staff-Monitored Program (SMP).
- IMF staff and the Sudanese authorities reached a staff-level agreement on policies and reforms that would underpin an SMP, subject to approval by the IMF’s management.
- An Executive Board discussion is envisaged in August.
SMP objectives and scope
- The SMP will support the implementation of the authorities’ comprehensive reform package which focuses on:
- stabilizing the economy,
- strengthening the social safety net,
- improving governance and the business environment.
- The SMP aims at:
- narrowing large macroeconomic imbalances,
- reducing structural distortions that hamper economic activity and job creation,
- strengthening governance and social safety nets,
- making progress towards eventual HIPC debt relief.
Economic situation and challenges (as stated by IMF staff)
- The Sudanese economy contracted by 2.5 percent in 2019.
- The economy is projected to shrink by 8 percent in 2020 as the COVID-19 pandemic weighs heavily on the economy.
- Inflation is very high and rising—114 percent in May.
- The Sudanese Pound continues to depreciate rapidly.
- Sudan’s debt burden remains unsustainable, at over 190 percent of GDP in 2019, the bulk of which was in arrears.
Reform package highlights
- The authorities presented a homegrown reform package with focus on:
- reducing fiscal and external deficits to contain inflation,
- strengthening social programs to mitigate the impact of adjustment and address the fallout of COVID-19,
- improving the business environment and governance.
- Specific reform measures envisaged include:
- increasing domestic revenue,
- reforming energy subsidies to create room for increased spending on social programs (including for the health sector and cash-transfers to families),
- prudent monetary policy and exchange rate reform to help reduce inflation, bolster external competitiveness, and support economic recovery,
- tackling corruption and improving the business environment to stimulate growth and job creation.
Financing, debt relief, and external engagement
- The IMF continues to support the authorities’ efforts to reach out to donors to mobilize the needed financing to support reforms.
- IMF staff continue to support the authorities’ efforts to reach out to international partners to mobilize adequate financing for the reform program and support progress toward debt relief under HIPC.
Engagements and acknowledgments
- The IMF team met with Finance Minister Elbadawi, Central Bank Governor Zeinelabdin, and other officials from the Ministries of Finance and Economic Planning, Energy and Mining, Justice, and the Central Bank of Sudan, Bureau of Taxation, Customs, the Central Bureau of Statistics, and other officials.
- The team also met representatives from development partners.
- The IMF team thanked the Sudanese authorities for their cooperation and the open and productive discussions.
Press Release No. 20/245, June 23, 2020