Sudan seeks IMF monitoring as oil revenues drop

July 16, 2009 (WASHINGTON) — The Sudanese government sent a letter of intent to the International Monetary fund (MF) requesting monitoring of the country’s economic performance and policies, according to letter published on the IMF website.

The monitoring program is to be effective immediately extending into December 2010, the letter signed by Sudanese finance and national economy Minister Awad Al-Jaz and the Central Bank governor Saber Al-Hassan.

The two officials cited the global financial crisis as impacting the Sudanese economy.

“Like many other countries, Sudan has been impacted by the global crisis, which has sharply reduced oil revenues and foreign direct investment,” the letter said.

The letter attached said that the proposed policies and measures aims at “sustaining economic growth, maintaining macroeconomic stability, and rebuilding foreign exchange reserves”.

“The Government and the Central Bank of Sudan (CBoS) believe that the policies and measures set forth in the attached MEFP are adequate to achieve these objectives, but stand ready to take additional measures that may be appropriate for this purpose”.

Some Sudanese officials including Al-Jaz have downplayed the impact of the worldwide credit collapse saying that the local economy is immune from its impact due to US economic sanctions imposed since 1997.

Sudan is heavily dependent on oil export but since the steep drop in crude prices the revenues witnessed a dramatic decline create alarm among officials about their ability to meet their budgeted revenue targets.

The IMF defines the monitoring program as “an agreement between national authorities and IMF staff to monitor the implementation of the authorities’ economic and financial program during a specified period—normally 12-18 months”.

“Such staff monitoring does not represent endorsement of the program by the IMF Executive Board or involve Fund financing” the bank says on its website.

Under the monitoring agreement Sudan would agree to follow the IMF’s instructions to achieve the goals sought by Khartoum. If both sides disagree as in cases of other countries, the IMF can opt to cancel the monitoring provisions.

In the letter Sudan called on the international community to provide support particularly in the area of debt relief”.

“The Government and the Central Bank of Sudan (CBoS) believe that the policies and measures set forth in the attached MEFP are adequate to achieve these objectives, but stand ready to take additional measures that may be appropriate for this purpose”.

Khartoum often complains that it has been denied debt relief due to political reasons and political rift with the west. Sudan’s debt is estimated to total more than $30 billion.

Sudan, a modest oil producer, recorded growth of 8-9 percent last year buoyed by record oil prices.

(ST)