IMF agrees to monitor Sudan economic reform programme
The International Monetary Fund (IMF) will monitor a 12-month economic programme by Sudan, providing the country an "opportunity" to convince donors and the financial body that it can implement necessary reforms and secure debt relief, Reuters reported on Wednesday,
Sudan's move to a transitional government is its chance to roll out "fundamental reforms to address major macro imbalances and lay the groundwork for inclusive growth" the IMF's Deputy Managing Director Antoinette Sayeh said.
Access to external borrowing is stifled by mounds of external debt and lingering arrears, Sayed added, adding that Khartoum had little choice but to rejuvenate its economy, implement reforms, and alleviate arrears.
Sudan remains in dire need of financial assistance to restructure its economy, which has been left reeling after decades of US sanctions and mismanagement under longtime autocrat Omar al-Bashir, who was ousted last year in a pro-democracy uprising.
In August, the country's chronic inflation rate rose to 167 percent. This month, authorities declared an economic emergency following a steep fall in the value of the currency, as the government moved to print money to subsidise essentials.
The country has close to $60 billion in foreign debt, meaning debt relief and access to foreign loans are the country’s gateway to economic recovery.
Sudan reached out to IMF staff to monitor its reform programme, helping the country to establish "a strong track record of policy and reform implementation - a key requirement for eventual debt relief", the IMF said in a statement.
The staff-monitored programme will run until 30 June 2021 and does not constitute financial assistance or a formal endorsement of the measures.
The programme of reforms seeks to stabilise the economy, remove distortions, improve competitiveness, and strengthen governance, Sayeh said.
The fund's acting chair added that the Covid-19 pandemic had exacerbated Sudan's many challenges, with millions of workers thrown out of work.
Some of the fiscal adjustment measures include the continued efforts to cut fuel subsidies to allow for increased social spending, a widening of the tax base, and work towards building a unified exchange rate.
The Sudanese pound dropped from around 183 pounds to the dollar on the black market in August to around 250 pounds to the dollar earlier this month, despite its official rate of 57 pounds to $1.
In June, the IMF announced a preliminary deal had been reached with Sudanese authorities on fiscal reform.
Sudan's access to the IMF or the World Bank for support has curtailed so far due to the US designating the country as a state sponsor of terrorism.
The United States indicated after Bashir was removed from power in April 2019 that it is willing to work to remove Sudan from the terrorism list.
Since then, Sudan has been ruled by a transitional military-civilian government. Elections are expected in late 2022.
Agencies contributed to this report.