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Sudan says in talks with IMF for fresh monitoring programme

May 14 2020 (KHARTOUM) - The Sudanese finance minister Ibrahim al-Badawi disclosed today that they are in talks with the International Monetary Fund (IMF) to create a new Staff Monitoring Program (SMP) for the country

Sudanese Finance Minister Ibrahim al-Badawi speaks to AFP during an interview in Washington, DC, on October 22, 2019. (AFP)

An SMP is an informal agreement between country authorities and IMF to monitor the implementation of the authorities’ economic program.

The technical program does not, however, entail financial assistance or endorsement by the IMF Executive Board but would help the country mend ties with donors.

It is understood that al-Badawi sent a formal letter to the IMF requesting a fresh SMP agreement.

An IMF spokesperson reached by Sudan Tribune has yet to respond on whether the international financial body made a decision on Khartoum’s request.

Al-Badawi said that during the ’Friends of Sudan’ meeting hosted virtually by France last week saw IMF expressing its desire in beginning talks on SMP.

"The country determines its priorities and how to achieve it using IMF help," the Sudanese official said in a television interview on Thursday night to explain the program.

He added that they hope to fulfil any targets put forward by the IMF SMP teams within a six-month timeframe.

The Friends of Sudan conference said in its readout that the participants are interested "in the creation of conditions for the creation of an IMF staff-monitored programme".

Al-Badawi emphasized that implementation of macroeconomic reforms is key to normalizing ties with global financial institutions & address arrears owed by Sudan.

"We are in a deep hole with a debt of $60 billion. It is an astonishing amount. These arrears made Sudan lose $3 million daily in international grants over the last 30 years," he said.

The official went on to say that the IMF programme remains the only way that would allow Sudan to make use of a special mechanism adopted by the World Bank (WB) and African Development Bank (Afdb) to help clear arrears.

He noted that the government has already undertaken measures related to lifting subsidies as well as reviewing how to liberalize the exchange rate in line with IMF traditional recommendations.

The IMF said last March that the foreign exchange rate system in Sudan remains “highly distorted” and recommended liberalizing it.

In response to a question on removing Sudan from the US list of states that sponsor terrorism, al-Badawi said that this is a matter of time and noted the issue of settling terrorism-related claims for that to happen.

France has said it plans to host a high-level donor summit of different stakeholders to discuss debt relief once Sudan is removed from the list.

In its World Economic Outlook (WEO) released last month the IMF sharply revised its 2020 economic growth forecasts for Sudan from -1.2% to -7.2% and from -0.6% to -3.0% in 2021.

The inflation rate for 2020 was projected to be at 81.3% compared to an initial estimate of 66.4%. In 2021 it is forecasted to be 91.1% which was also far higher than the previous 74.5% figure.

The downward revisions were attributed mainly to COVID-19 pandemic.

(ST)