International Monetary Fund. Middle East and Central Asia Dept.
Sudan, with the support of the international community, is seeking to implement an ambitious reform program to address major macroeconomic imbalances and support sustainable, inclusive growth. A new transitional government was established in the wake of the 2019 revolution with the mandate to carry out sweeping reforms to reverse decades of economic and social decline. The government is pursuing a transformational reform agenda focused on: (i) achieving internal peace based on inclusion, regional equity, and justice; (ii) stabilizing the economy and correcting the large macroeconomic imbalances; and (iii) providing a foundation for future rapid growth, development, and poverty reduction. The government has achieved important milestones, most prominently a peace agreement with almost all internal armed opposition groups in October 2020 to end 17 years of conflict. It has also agreed to ambitious reforms and policy adjustments in the context of an International Monetary Fund (IMF) Staff Monitored Program (SMP) that meets the Upper Credit Tranche (UCT) conditionality standard and an International Development Association (IDA) Development Policy Financing (DPF) operation. Furthermore, on December 14, 2020, Sudan was officially removed from the United States State Sponsors of Terrorism List (SSTL), ending almost three decades of international isolation. While positive changes are underway, political contestation over power sharing arrangements remains acute. It is critical for Sudan to take advantage of a still favourable political economy to tackle its macroeconomic imbalances and put itself on a sustainable development trajectory.
After five years of civil conflict, the warring parties came to a peace agreement in September 2018. Until the COVID-19 crisis broke out, improved political stability and an uptick in international oil prices led to significant progress, with a rebound in economic growth, a decline in inflation, and a stabilization of the exchange rate. The COVID-19 pandemic is severely disrupting South Sudan’s economy, leading to a sharp decline in projected growth (-3.6 percent in FY20/21, about 10 percentage points below the pre-pandemic baseline) and a contraction of oil export proceeds—the main source of exports and fiscal revenue—which has given rise to urgent balance of payments needs and opened a large fiscal financing gap.
This Technical Assistance Mission has been undertaken to support the Bank of South Sudan (BSS) in improving external sector statistics (ESS). The recommendations made during the 2018 mission for the recording of oil exports and transactions with Sudan under the Transitional Financial Agreement were implemented by the BSS. The mission worked toward enhancing the inter-agency cooperation by meeting with selected public sector bodies, providing them with an overview of the balance of payments and the data that the BSS will request from them. Before the end of the mission, requested data from one of the entities, the Civil Aviation Authority was provided. A work program was developed to conduct a visitor expenditure survey and a preliminary International Reserves and Foreign Currency Liquidity template was submitted to IMF’s Statistics Department for review. In order to support progress in the various work areas, the mission recommended a detailed one-year action plan, with the several priority recommendations carrying weight to make headway in improving ESS reliability.
International Monetary Fund. Strategy, Policy, &, Review Department, International Monetary Fund. Finance Dept., and International Monetary Fund. Legal Dept.
"This paper reviews progress under the Fund’s strengthened cooperative strategy on overdue financial obligations. The level of overdue obligations to the Fund declined and their structure has remained broadly unchanged since the last review. Total overdue obligations to the Fund at end-June 2017 amounted to SDR 1,205.7 million, a decline of about SDR 100 million from the end-June 2012 level, when the strategy was reviewed last.
All overdue obligations to the Fund at end-June 2017 were due to two protracted overdue obligations cases. Sudan accounts for the bulk of the overdue obligations to the Fund (80 percent), and Somalia for the remainder. Zimbabwe, which was in protracted overdue obligations to the PRGT at the time of the last Review, settled its overdue obligations to the PRGT on October 20, 2016."
International Monetary Fund. Independent Evaluation Office
This evaluation assesses the IMF’s work on countries in fragile and conflict-affected situations (FCS), addressing both (i) its engagement through surveillance, lending, and capacity development and (ii) the frameworks and procedures for its engagement. It finds that the IMF has provided unique and essential services to FCS to restore macroeconomic stability and rebuild core macroeconomic institutions as prerequisites for state building, playing a role in which no other institution can take its place. In this critical role, it is broadly acknowledged to have had a high impact. While the IMF has provided relatively little direct financing, it has catalyzed donor support through its assessment of a country’s economic policies and prospects. Notwithstanding this positive assessment, the IMF’s overall approach to its FCS work seems to have been conflicted. Not only has it failed consistently to make hard choices necessary to achieve full impact from its engagement in countries where success requires patient and dedicated attention over the long haul, but past efforts have not been sufficiently bold or adequately sustained, and the staff has tended to revert to treating fragile states using IMF-wide norms, rather than as countries needing special attention. The report proposes six recommendations to improve the effectiveness of the IMF’s FCS work: (i) to issue a statement of high-level commitment to FCS work for IMFC endorsement; (ii) to create an effective institutional mechanism with the mandate and authority to coordinate and champion such work; (iii) to develop comprehensive strategies for individual FCS; (iv) to adapt its lending toolkit to deliver more sustained financial support to FCS; (v) to take practical steps to increase the impact of its capacity development support to FCS; and (vi) to take steps to incentivize high-quality and experienced staff to work on individual FCS and find pragmatic ways of increasing field presence in high risk locations.
This 2016 Article IV Consultation highlights the rapid deterioration of economic conditions in South Sudan since the beginning of the civil conflict in late 2013. Real GDP growth declined by nearly 20 percent during 2015 and 2016, and annual inflation rose to about 550 percent in September 2016 before declining to 370 percent in January 2017. The medium-term outlook faces challenges and significant downside risks. Without significant progress toward peace and economic stabilization, the economic trajectory for South Sudan is highly unstable, and the country risks spiraling into a trap of deteriorating economic performance and worsening security with continued high humanitarian costs.
This 2014 Article IV Consultation highlights that South Sudan’s economic performance has been mixed in recent years. Real GDP growth has displayed high volatility, the result of changes in oil and agricultural production. Inflation rose in an initial period of economic instability in 2011–12 but was contained in 2013–14 thanks to fiscal and monetary restraint and lower food prices. Serious challenges remain, including distortions in the foreign exchange market and in budget execution, lower international oil prices, and subdued oil production. As a result, financing the budget for FY2014/15 is challenging and will likely require policy decisions given the otherwise potentially adverse impact on economic stability and inflation.
International Monetary Fund. Secretary's Department
Seven years after the onset of the global financial crisis, the world still has a way to go to secure a sustainable recovery marked by strong growth that supports rapid job creation and benefits all, International Monetary Fund (IMF) Managing Director Christine Lagarde says in her foreword to the institution’s Annual Report 2014—From Stabilization to Sustainable Growth, published today. The recovery is ongoing, but it is still too slow and fragile, subject to the vagaries of financial sentiment. Millions of people are still looking for work. The level of uncertainty might be diminishing, but it is certainly not disappearing.” Ms. Lagarde said that “throughout the crisis and in the recovery period, the IMF has been, and continues to be, an indispensible agent of economic cooperation” for its membership. The report covers the work of the IMF’s Executive Board and contains financial statements for the year May 1, 2013, to April 30, 2014. It describes the IMF’s support for its 188 member countries, with an emphasis on the core areas of IMF responsibility: assessing their economic and financial policies, providing financing where needed, and building capacity in key areas of economic policy.
This paper reviews progress under the Fund’s strengthened cooperative strategy on overdue financial obligations. The level and structure of arrears to the Fund has remained broadly unchanged since the last review. Total arrears to the Fund at end-June 2012 amounted to SDR 1,302.3 million, a decline of SDR 1.6 million from the end-June 2011 level. While payments to the Fund by Sudan and Zimbabwe exceeded new obligations falling due, Somalia’s arrears increased further. All overdue obligations to the Fund at end-June 2012 were due to the protracted arrears cases. Three members remain in protracted arrears to the Fund—Somalia, Sudan, and Zimbabwe. Sudan accounted for the bulk of the arrears to the Fund (76 percent).
This paper reviews progress under the Fund’s strengthened cooperative strategy on overdue financial obligations. The level and structure of arrears to the Fund remained broadly unchanged since the last review. Total arrears to the Fund amounted to SDR 1,303.9 million at end-June 2011, a decline of about SDR 5.5 million since the last review. While payments to the Fund by Sudan and Zimbabwe were in excess of new obligations falling due since the last review, Somalia’s arrears increased further.