Sudan has agreed to implement a number of reforms to stabilise its economy as part of a deal with the International Monetary Fund, a move that could help it access much-needed debt relief financing.
The North African country will remove large fuel subsidies to boost social spending and will broaden the tax base, according to a statement from the Washington-based lender on Thursday. The Sudanese authorities also intend to form a unified market-clearing exchange.
“With the move to a transitional government, Sudan now has a window of opportunity for fundamental reforms to address major macro imbalances and lay the groundwork for inclusive growth,” Antoinette Sayeh, deputy managing director of the IMF, said.
“The transitional government has laid out a home-grown programme of reforms aimed at stabilising the economy, removing distortions, improving competitiveness and strengthening governance.”
Sudan will initiate reforms as part of a 12-month staff monitored programme of the IMF.
The fund also said the coronavirus pandemic has compounded the challenges facing the country. Fiscal and external imbalances are large, inflation is high at 167 per cent in August and rising and its competitiveness is weak.
The humanitarian situation is also dire with large numbers of internally displaced people and refugees in the country, according to the fund.
“Sudan’s external debt is also high and with longstanding arrears which severely limit access to external borrowing. In particular, Sudan remains unable to access IMF resources because of its continued arrears to the fund,” Ms Sayeh, said.
“A strong track record of macroeconomic performance and implementation of reforms, together with a comprehensive strategy of arrears clearance and debt relief supported by Sudan’s development partners, is required for addressing Sudan’s high debt overhang.”