Sudan took a further step toward agreeing a staff-monitored program with the International Monetary Fund, a deal the North African country says is crucial to overhauling its battered economy.
The IMF and Sudan’s transitional government have reached a preliminary accord on policies for the prospective one-year, non-financial program, the lender said in a statement. The announcement comes before a Thursday donor conference where Sudan, blighted by years of economic mismanagement, hopes to secure financing from international partners.
The “homegrown reform package would seek to reduce fiscal and external deficits while strengthening social welfare programs,” Daniel Kanda, who led a recent IMF mission to Sudan, said in the statement. Reforms envisaged include increasing domestic revenue and reforming energy subsidies and the exchange rate.
Sudan is striving to emerge from three decades of repressive rule under dictator Omar al-Bashir, who was ousted by the army last year amid mass protests. A one-time international pariah, Sudan is $1.3 billion in arrears to the IMF and external debt will reach $57.5 billion this year, sums that must be settled in some way before key Western lenders will re-engage.
“The Sudanese economy is facing daunting social and economic challenges,” Kanda said, with the economy projected to shrink 8% this year, inflation at 114% and its currency rapidly depreciating.
Finance Minister Ibrahim El-Badawi this month told Bloomberg that agreeing on the IMF program and persuading the U.S. to drop its long-standing listing of Sudan as a state sponsor of terrorism are key planks of the transitional government’s plan.