(Ecofin Agency) - Sudan will soon kick off an IMF staff-monitored economic reform program to revive its economy marked by decades of mismanagement. The two partners signed a 12-month agreement in that regard following an IMF mission held from June 8-21, 2020 via virtual meetings with the Sudanese authorities.

The new program, which is not backed by funding, aims to rebalance the country's macroeconomic framework to revive economic activity and job creation while strengthening governance. It will help to restore macroeconomic stability, lay the foundations for strong and inclusive growth, mobilize external financing, move towards debt relief under the Heavily Indebted Poor Countries (HIPC) initiative, and address the impact of the COVID-19.

“The focus is 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, and improving the business environment and governance. In support of these objectives, the reform package envisages increasing domestic revenue and reforming energy subsidies to create room for increased spending on social programs (including for the health sector and cash-transfers to families),” said Daniel Kanda who led the IMF mission.

“Prudent monetary policy and exchange rate reform will help reduce inflation, bolster external competitiveness, and support economic recovery. Tackling corruption and improving the business environment, to stimulate growth and job creation, are also key elements of the program,” he added.

Such an announcement is a positive sign for Sudan as the transitional government in place since the ousting of President Omar al-Bashir tries to reintegrate the country into the international financial system from which it has been excluded for decades. With a debt estimated at more than 190% of GDP in 2019, the country is facing daunting challenges and high inflation which has caused the local currency to fall.

For this year, the IMF expects the country's economy to grow by -8%.

Moutiou Adjibi Nourou