KHARTOUM, Sudan, March 28, 2014/African Press Organization (APO)/ — The Managing Director of the International Monetary Fund has approved a Staff-Monitored Program (SMP) for Sudan covering the period January-December 2014. An SMP is an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic program. SMPs do not entail financial assistance or endorsement by the IMF Executive Board.
Sudan’s economy has been facing major challenges since the July 2011 secession of South Sudan, with low economic growth, high inflation largely driven by the financing of high fiscal deficits, a deterioration in external and fiscal accounts, and a persisting gap between the official and curb market exchange rates.
The new SMP for 2014 provides a comprehensive framework for strengthening the policy mix to engineer an economic turnaround and restore macroeconomic stability while strengthening social safety nets and developing the reforms for sustainable economic growth.
Sudan’s external debt is high and largely in arrears, cutting off the country from access to most external financing sources. In particular, Sudan remains unable to access IMF resources because of its continued arrears to the Fund. А strong track record of maintaining macroeconomic stability and implementing reforms, together with a comprehensive arrears clearance strategy supported by development partners, will be essential for resolving Sudan’s large debt overhang.
Sudan has established good cooperation with the Fund over more than a decade. IMF staff will closely work with the authorities to monitor progress in the implementation of their economic program through quantitative targets and structural benchmarks. In addition, the IMF will continue to provide targeted technical assistance to support Sudan’s capacity-building efforts and its adjustment and reform program. Successful implementation of the SMP will signal to the international community the authorities’ commitment to macroeconomic reforms and in due time will help the authorities in the debt relief process.